Corporate finance (advanced)
PROF. ETTORE CROCI
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.
COURSE CONTENT
Valuing Financial Assets:
– Portfolio Tools & Mean-Variance Analysis;
– Factor Models and the Arbitrage Pricing Theory;
– Derivatives & fundamental elements of option pricing;
– 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;
– Asymmetric information in corporate finance: the issue in general, and analysis
of specific cases;
– Managerial incentives and Financial decisions;
– Payout policy.
READING LIST
The reference textbook is the following:
HILLIER-GRINBLATT-TITMAN, Financial Markets and Corporate Strategy, McGraw-Hill, 2011 (2nd
European ed.).
Further teaching material is available on Blackboard.
TEACHING METHOD
Classroom lessons.
ASSESSMENT METHOD
Attending students: Midterm exam (50%) plus final exam (50%). Both exams are
written.
Non-attending students: Final written exam (100%).
NOTES
Prerequisites: Students are required to be familiar with the topics studied in introductory
courses of Corporate finance (NPV rule; capital budgeting, risk and return relation; capital
structure choices; see for example Ross-Westerfield-Jaffe “Corporate finance” textbook).
Further information is available on Blackboard.