Corporate Finance
A.Y. 2026/2027
Learning objectives
The course aims at providing knowledge of the financial aspects of an enterprise or corporation in order to enable students to assess its prospects, estimate its value, understand the process for deciding the investments underpinning its growth, judge the best way to source funds for such investments, understand hedging and payout decisions, all in the context of the financial and institutional environment in which firms operate.
Expected learning outcomes
At the end of the course the student knows a corporation's accounts explaining how the main internal governance and external environment issues are interrelated and how they can best be analyzed to gauge the health, prospects and value of a business. Specifically, the student knows the time value of money, the cost of capital and the identification of the appropriate discount or hurdle rate, the main decision criteria such as IRR, NPV, repayment period, capital structure and distribution policies and the main issues involved in the decision to hedge risk through futures and options.
Lesson period: First trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course can be attended as a single course.
Course syllabus and organization
Single session
Responsible
Lesson period
First trimester
Course syllabus
This module provides an in-depth overview of the main theories and principles of Corporate Finance. Topics include:
* The financial environment and the role of the corporation;
* Financial statement analysis and cash flow;
* Time value of money and the valuation of cash flows;
* Interest rates and bond valuation;
* Stock valuation and capital budgeting;
* Risk and return, portfolio theory, and the Capital Asset Pricing Model (CAPM);
* The cost of capital and investment decision rules;
* Debt financing, taxes, and optimum capital structure;
* Payout policy;
* Working capital management;
* Raising equity capital and Initial Public Offerings (IPOs).
Having successfully completed this module, students will be able to:
* understand the key sources of information used in corporate financial decision-making, financial analysis, and capital budgeting;
* explain the relationship between risk and return and apply asset pricing concepts to the valuation of financial assets, including stocks and bonds;
* evaluate corporate investment opportunities using appropriate capital budgeting techniques;
* assess financing choices and determine an appropriate capital structure, taking into account debt financing, taxes, and the cost of capital;
* explain the main theories of Modigliani and Miller regarding capital structure and payout policy;
* understand the process of raising equity capital, including Initial Public Offerings (IPOs), and the principles of working capital management.
* The financial environment and the role of the corporation;
* Financial statement analysis and cash flow;
* Time value of money and the valuation of cash flows;
* Interest rates and bond valuation;
* Stock valuation and capital budgeting;
* Risk and return, portfolio theory, and the Capital Asset Pricing Model (CAPM);
* The cost of capital and investment decision rules;
* Debt financing, taxes, and optimum capital structure;
* Payout policy;
* Working capital management;
* Raising equity capital and Initial Public Offerings (IPOs).
Having successfully completed this module, students will be able to:
* understand the key sources of information used in corporate financial decision-making, financial analysis, and capital budgeting;
* explain the relationship between risk and return and apply asset pricing concepts to the valuation of financial assets, including stocks and bonds;
* evaluate corporate investment opportunities using appropriate capital budgeting techniques;
* assess financing choices and determine an appropriate capital structure, taking into account debt financing, taxes, and the cost of capital;
* explain the main theories of Modigliani and Miller regarding capital structure and payout policy;
* understand the process of raising equity capital, including Initial Public Offerings (IPOs), and the principles of working capital management.
Prerequisites for admission
The course is primarily intended for Master's students and assumes a basic knowledge of economics, accounting, statistics, mathematics, and finance, as well as familiarity with the main tools of investment analysis.
Teaching methods
Teaching and learning methods include lectures, short videos, numerical exercises, case studies, classroom discussions of academic papers, and guest talks by industry practitioners. The course also makes use of student response systems to encourage active participation, collect feedback, and facilitate questions and classroom discussions.
All classes follow an iterative learning approach, whereby theoretical concepts are progressively reinforced through practical applications, interactive discussions, and continuous feedback.
All classes follow an iterative learning approach, whereby theoretical concepts are progressively reinforced through practical applications, interactive discussions, and continuous feedback.
Teaching Resources
Berk, J. and DeMarzo, P (Fifth Edition or previous editions). Corporate Finance. Pearson Education, Inc.
Principles of Corporate Finance, Brealey, Myers, Allen (thirteenth edition or previous editions)
Case studies
Selected academic papers
Principles of Corporate Finance, Brealey, Myers, Allen (thirteenth edition or previous editions)
Case studies
Selected academic papers
Assessment methods and Criteria
Course assessment differs for attending and non-attending students.
For attending students (minimum attendance of 75% of lectures, verified through attendance checks during class), the final grade consists of:
1. Final written examination, graded on a 30-point scale;
2. Group project and presentation, worth up to 3 bonus points added to the examination grade. Students wishing to participate in this assessment component must register at the beginning of the module. Further information on the registration procedure and project requirements will be provided during the first lectures.
The final written examination will assess students' understanding of the entire course programme and their ability to apply theoretical concepts to practical financial problems. The examination may include theoretical questions, quantitative exercises, and case-based questions.
Indicatively, the examination will be structured around the following broad areas:
1) Financial analysis and investment decisions (capital budgeting, stock and bond valuation, risk and return, CAPM, and the cost of capital): 40%;
2) Financing decisions (debt financing, taxes, optimum capital structure, and payout policy): 40%;
3) Corporate financial management (working capital management and raising equity capital, including Initial Public Offerings (IPOs)): 20%.
The instructor will provide further information during the course and/or through myAriel regarding the group project, presentation requirements, and any intermediate activities.
For non-attending students, the final grade is based exclusively on the final written examination, which accounts for 100% of the final grade and covers the entire course programme.
For attending students (minimum attendance of 75% of lectures, verified through attendance checks during class), the final grade consists of:
1. Final written examination, graded on a 30-point scale;
2. Group project and presentation, worth up to 3 bonus points added to the examination grade. Students wishing to participate in this assessment component must register at the beginning of the module. Further information on the registration procedure and project requirements will be provided during the first lectures.
The final written examination will assess students' understanding of the entire course programme and their ability to apply theoretical concepts to practical financial problems. The examination may include theoretical questions, quantitative exercises, and case-based questions.
Indicatively, the examination will be structured around the following broad areas:
1) Financial analysis and investment decisions (capital budgeting, stock and bond valuation, risk and return, CAPM, and the cost of capital): 40%;
2) Financing decisions (debt financing, taxes, optimum capital structure, and payout policy): 40%;
3) Corporate financial management (working capital management and raising equity capital, including Initial Public Offerings (IPOs)): 20%.
The instructor will provide further information during the course and/or through myAriel regarding the group project, presentation requirements, and any intermediate activities.
For non-attending students, the final grade is based exclusively on the final written examination, which accounts for 100% of the final grade and covers the entire course programme.
Professor(s)
Reception:
On appointment