Learning objectives
The business finance course has the following objectives:
- Create the skills for the correct diagnosis of company financial problems;
- Make available models and logical assessment of financial solutions for businesses in different competitive environments;
- Strengthen the skills associated with the construction of valuation models.
Prerequisites
Basic knowledge of spreadsheet analysis
General program of corporate finance
General program of mathematics
Course unit content
The course focuses on main issues of financial management of companies. In particular, it will be illustrated the fundamental theoretical models and the operational applications in corporate finance decisions: capital budgeting, the determination of a right measure of cost of capital and the right capital structure. These are the main fields of activity of the Financial Management Department. The aim of the course is to introduce students to the world of business finance by providing them with a view of both the theoretical models and their main applications in business, focusing on operational decisions.
Our first focus involves several issues pertaining creditworthiness valuation. It is important to understand what the evaluation logic adopted by lender is.
The second main focus of the course concerns the identification of specific circumstances involving chief financial officers. Each circumstance should be analyzed with regard to availability and to the critical tools to bring under control.
The third focus finally relates to financial modelling and to the fact that the spreadsheet is the main tool of those who deal with corporate finance and, more generally, with financial choices. This course module aims to enable students to develop their own simulation models in the field of financial decisions. This result is achieved by improving the necessary familiarity with the spreadsheet and, in parallel with the development of new operational achievements. The initial phase of the module is in fact concentrated on the analysis of the already developed decision model, the next part we focus instead on developing new models. This is accomplished thanks to practice and the subsequent development of a correct strategy to fully exploit the potential of the tool.
Full programme
Chapter 1 - The Foundations
Chapter 2 - The Objective of financial management Chapter 3 - The notion of risk
Chapter 4 - Measuring Risk and Minimum Rate of Return: In Practice Chapter 5 - Measure the investment performance
Chapter 6 - Interdependencies between projects
Chapter 7 - Capital structure: analysis of the financing decision
Chapter 8 - Capital structure: the optimal combination of funding sources Chapter 9 - Capital structure: implementation
Chapter 10 - The dividend policy
Chapter 11 - Analysis of liquidity returned to shareholders Chapter 12 - Theory and Practice of Firm Evaluation
Bibliography
Aswath Damodaran - Oliviero Roggi, Finanza aziendale applicazioni per il management, 4 edizione, Apogeo.
Teaching methods
Acquisition of knowledge: lectures
Acquisition of the ability to apply knowledge: model construction Acquisition of judgement skills: During the course students will be encouraged to identify strengths and weaknesses of the evaluation models and optimization of various aspects of corporate finance Acquisition of learning skills: for each topic students will start from the illustration of the problem to be solved and the solutions will be analyzed critically, even with regard to real transactions in progress on the capital market.
Acquisition of technical language: terms commonly used by the financial community are used during lectures.
Assessment methods and criteria
Midterm, Excel modelling final test and colloquium.
The knowledge will be assessed with 2 closed-ended questions that will count up to 2 points each.
The ability to apply knowledge will be assessed with 1 exercise that will count up to 8 points.
The ability to communicate with the appropriate technical language will be assessed through two closed-ended questions about the meaning of the terms used by professionals in financial markets that will count up to 2 points each.
The autonomy of judgment and the ability to learn will be assessed with 2 open-ended questions that will count up to 7 points each.
Other information
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