OVERVIEW

The teaching unit 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 teaching unit, the student:

• Is able to determine the cash flows of an investment project based on the financial data provided.
  Assessment criteria: quantitative analysis skills, correct use of terminology.

• Can apply the main investment appraisal techniques to proposed business cases.
  Assessment criteria: quantitative analysis skills, correct use of terminology.

• Has an in-depth understanding of the risk-return relationship, the principles of Modern Portfolio Theory, and can estimate the cost of equity and debt capital in applied contexts.
  Assessment criteria: accuracy, clarity of presentation, correct use of terminology, quantitative analysis skills.

• Knows the main theories concerning corporate capital structure and can discuss them in relation to real-world cases.
  Assessment criteria: accuracy, clarity of presentation, correct use of terminology.

• Understands the determinants of corporate financing decisions and is able to analyze them in real situations.
  Assessment criteria: accuracy, clarity of presentation, correct use of terminology.

• Is able to estimate the value of a leveraged firm using data provided in practical exercises.
  Assessment criteria: quantitative analysis skills, accuracy, and correct application of methodologies.

PREREQUISITES

Knowledge related to the teaching units of Financial Mathematics, Accounting, and Statistics
is considered a highly recommended prerequisite.

The Business Economics exam is a formal prerequisite for this teaching unit.

TEACHING METHODS

Lectures with examples

Tutorials

Case study analysis

Self-assessment test

Seminars and Workshop with Professionals

Attendance is not compulsory

Students with disabilities, SLD or SEN

Students with disabilities, with SLD or with SEN are reminded that, to request exam accommodations, they must first upload their certification to the University website at servizionline.unige.it<https://servizionline.unige.it/>, in the “Students” section. The documentation will be checked by the University’s Services for the Inclusion of Students with Disabilities and with SLD.

At the beginning of the course, students are advised to contact the lecturer to agree on exam arrangements which, while respecting the learning objectives of the course, take individual learning needs into account.

To request compensatory tools or dispensatory measures, students with disabilities or SLD must fill in the dedicated Webform available athttps://unige.it/disabilita-dsa, at least 7 working days before the exam.

Students with SEN may instead send their request by e-mail to the lecturer, copying the Department Representative, Prof. Elena Lagomarsino, atinclusione.economia@unige.it<mailto:inclusione.economia@unige.it>, and the Inclusion Office atinclusione.studenti@info.unige.it<mailto:inclusione.studenti@info.unige.it>.

Requests from students will be assessed by the lecturer and may be approved or rejected.

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
• 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

D. Hillier, S. Ross, R. Westerfield, J. Jaffe, B. Jordan, “Corporate Finance” 4/ed, McGraw Hill, 2023. Capp. 1, 4, 6-10, 12,14-16

TEACHERS AND EXAM BOARD

LESSONS

LESSONS START

Calendario didattico | DIEC

Class schedule

The timetable for this course is available here: Portale EasyAcademy

EXAMS

EXAM DESCRIPTION

Written Exam

For attending students, the assessment includes:
- A midterm exam with exercises and multiple-choice questions (50% of the final grade)
- A final exam with exercises and open-ended questions (50% of the final grade)

For non-attending students, a written exam with exercises and questions is required

The program of the teaching unit is identical for both attending and non-attending students

ASSESSMENT METHODS

The written exam will assess the student's analytical skills in determining cash flows, applying the main capital budgeting techniques, and calculating the cost of capital. It will also evaluate the clarity of presentation and the correct use of technical terminology in solving exercises and answering open-ended questions, which are designed to test the student's understanding and interpretation of key financial theories.

FURTHER INFORMATION

For further information not included in the teaching unit description, please contact the instructor