Corporate Finance (advanced course)
PROF. LORENZO CAPRIO
COURSE AIMS
The Corporate Finance (advanced) course aims to complete the acquisition of the
basic theoretical aspects in the field. The contents are important both for students
interested in Finance, and for students interested to develop generalist managerial
skill. The course is also preliminary to the more advanced “Models for Financial
Markets-Derivative Instruments” and “Corporate Finance - Themes in Applied
Financial Management” courses, which are recommended in order to build up a
professional profile in Corporate Finance.
COURSE CONTENT
Risk/return models.
–
the limits of CAPM;
–
APT and the Fama-French three-factor model;
–
empirical evidence and its practical implications.
The option pricing model and some of its applications in corporate finance.
– Fundamental elements of option pricing (definitions, boundary conditions, the
Black-Scholes model using the binomial approach);
– option pricing and the choice between debt and equity;
– applications of option pricing in capital budgeting.
Agency costs and asymmetric information in corporate finance.
– Agency costs and financial decisions.
– Agency costs of debt and equity.
– The consequences of asymmetric information in corporate finance: the issue in
general, and analysis of specific cases.
– The dividend distribution decision.
READING LIST
Collection of articles published by EDUCatt and other material available on the professor’s
webpage.
As far as the first topic (risk/return models) is concerned, in addition the text:
ELTON-GRUBER-BROWN-GOETZMANN, Teorie di portafoglio e analisi degli investimenti, Apogeo,
Milano.
For some subjects it may be necessary to revise some of the material covered in the
corporate finance course taken as part of the first-level degree course, contained in RossWesterfield-Jaffe, Finanza Aziendale, Il Mulino, Bologna.
TEACHING METHOD
Classroom lessons.
ASSESSMENT METHOD
Final written exam (some of the questions require exact numerical solution, others are
open questions requiring to explain issues dealt with in the course). Students will be able
also to sustain a mid-course written exam on a voluntary basis.
NOTES
Further information can be found on the professor's webpage
http://www2.unicatt.it/unicattolica/docenti/index.html, or on the Faculty notice board.
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