Corporate finance
PROF. MARCO GRECO; PROF. PASCAL FRANTZ
COURSE AIMS
The objective of the course is to provide a good understanding of corporate
financial policies. The best way to illustrate corporate finance is to list just a few
questions that the course will try to answer: what determines the value of a
corporation? How corporations decide their financing sources? Why does a
company go public? Or decides to merge with another? Or raise capital? Or pay
dividends? For each topic examined, the course will provide a theoretical
framework for analyzing it and will review selected case studies. The course is
useful for every professional position that deals with: corporate securities,
corporate lending, asset management, consulting, private equity, corporations
finance. Active participation is encouraged and highly desirable.
COURSE CONTENT
1. Basic tools (Prof. Marco Greco)
– Excel for finance;
– Bloomberg for corporate finance;
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Corporate financial analysis (Prof. Marco Greco)
Financial statements analysis and benchmarking;
Financial and operating performance measurement;
Financials’ forecasting techniques.
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Corporate Financing policy (Prof. Marco Greco)
Equity financing (IPO , SEO);
Debt financing;
Payout policy.
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Valuation (Prof. Pascal Frantz)
Implications of corporate financial analysis for valuation (PVAE);
Determinants of price multiples in efficient markets;
Valuation of stocks and firms using full information forecasting valuation
methods (PVAE, PVED, DCF);
– Properties of valuation methods.
5. Capital structure policies (Prof. Pascal Frantz)
– Modigliani and Miller (MM) capital structure irrelevance proposition;
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MM with corporate taxes and costs of financial distress;
Agency theory of capital structure;
Pecking order theory of capital structure;
Signaling theories of capital structure.
6. Estimating the cost of capital (Prof. Marco Greco)
– The Equity Cost of capital determinants;
– The Debt Cost of capital;
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Mergers and acquisitions (Prof. Pascal Frantz)
Motivation for engaging in mergers and acquisitions;
Valuation and bidding issues;
The free riding problem;
Gains to shareholders in target and bidding firms.
READING LIST
The textbook for the course is: J. BERK-P. DEMARZO, Corporate Finance, Pearson International
Edition.
Slides and articles, as well, will be made available on the course web site on Blackboard,
and will be part of the official teaching material.
TEACHING METHOD
Class lectures and discussion of case studies. An empirical work may be also required as
part of the final valuation.
ASSESSMENT METHOD
Option (a). The final grade will be based on: a paper on a topic chosen by the student
(30%), and a written final exam (70%). This option can be exercised only on the June exam
session, by the students that have regularly attended the course.
Option (b). A written final exam. This exam format is valid on all exam dates.