OVERVIEW

The course introduces the student to corporate financial decisions and provides the basic knowledge and methodologies necessary to identify the choices that are able to create value for the company.

AIMS AND CONTENT

LEARNING OUTCOMES

The course aims at developing the institutional contents related to the tasks of the finance function within corporate management, with a focus on both the most recent developments in theory and on operational and applicative aspects. In particular, the criteria and methodologies for the valuation of corporate investments, the principles and methodologies underlying the determination of the cost of capital and the risk-return ratio, as well as the criteria related to financing choices are developed.

AIMS AND LEARNING OUTCOMES

At the end of the course the student:

• is able to determine the cash flows of an investment project;
• knows and knows how to apply the main techniques for evaluating investment projects;
• has in-depth knowledge of the risk-return relationship, the principles of the Modern portfolio Theory and knows how to estimate the cost of equity;
• knows the main theories on the financial structure of the company; understands the determinants of the firm's financing decisions; is able to estimate the value of the indebted company.

PREREQUISITES

Knowledge related to the courses of Financial Mathematics, Accounting and Statistics are considered a highly recommended prerequisite.

The Business Economics exam is preparatory for this course.

TEACHING METHODS

Lectures with examples

Tutorials

Case study analysis

Self-assessment test

Seminars and Workshop with Professionals

Students who have valid certification of physical or learning disabilities  and who wish to discuss possible accommodations or other circumstances regarding lectures, coursework and exams, should speak both with the instructor and with Professor Serena Scotto (scotto@economia.unige.it), the Department’s disability liaison

SYLLABUS/CONTENT

• Investment projects: definition
• Determination of cash flows
• Sources of funding
• The quantification of risk and return
• Portfolio theory
• Capital Asset Pricing Model
• Estimate of the cost of capital
• Debt design and limits on the use of debt
• Financial structure: the fundamental principles
• The main investment evaluation criteria
• Investment decisions in conditions of scarcity of resources
• Project analysis: scenario analysis, sensitivity analysis and real options

RECOMMENDED READING/BIBLIOGRAPHY

Book

S. Ross, D. Hillier, R. Westerfield, J. Jaffe, B. Jordan, “Corporate Finance” 3/ed, McGraw Hill, 2018, Capp. 1, 4, -10, 12, 14-16, 18 

TEACHERS AND EXAM BOARD

Exam Board

ROSALIA SANTULLI (President)

MARCO DI ANTONIO

FRANCESCA QUERCI

LAURA NIERI (President Substitute)

LESSONS

EXAMS

EXAM DESCRIPTION

Written exam

ASSESSMENT METHODS

Studentes preparation will be examined through a written test with exercises and theoretical questions, aimed at verifying ttheir ability to apply the main capital budgeting techniques, to calculate the cost of capital and to interpret the main financial theories.

Exam schedule