ADVANCED CORPORATE FINANCE
ADVANCED CORPORATE FINANCE
Saverio Massi Benedetti, Edoardo Maria Venosi
Saverio Massi Benedetti
smassi@luiss.it
Obiettivi formativi
The course will present and discuss corporate finance topics including advanced capital budgeting techniques, capital structure design, dividend policy and firm valuation. The aim of the course is to combine standard academic teaching with case studies and personal work experience presentations from the lecturers in order to provide students with a framework to analyze even complex investment and financing decisions and understand how financial theory can be used to address practical issues.
Risultati di apprendimento attesi
Students are expected to acquire deep understanding of the theory related to the course topics and to be able to apply the theoretical knowledge to practice
Contenuti Del Corso
The course will cover the following topics:
Risk and return models, CAPM, APM, Multifactor models;
Cost of Equity, Cost of Capital, WACC;
Return on investments, Capital budgeting;
Capital structure design;
Dividend policy;
Firm valuation, DCF Models, Relative valuation and multiples;
Valuation in IPO, M&A;
LBOs;
Testi Di Riferimento
Damodaran, A. (2015) Applied Corporate Finance, 4th Edition;
Berk/DeMarzo (2014) Corporate Finance;
Metodologie Didattiche
The course will combine standard academic teaching (covering theoretical background and formal models) with lectures oriented towards practical issues, case studies and excel-based tutorial sessions.
Selected problem sets or projects may be assigned as individual or team work over the semester in order to stimulate active participation by students.
Modalità di verifica dell'apprendimento
Written (compulsory) exam
Criteri per l’assegnazione dell’elaborato finale
Personal judgment and full marks for the exam session.
Il syllabus affronta temi collegati alla sostenibilità?
Yes, sustainability topics are covered within the corporate governance objective section and generally addressed in connection with other topics when relevant
Settimana 1
Topics:
Introduction to the course;
The objective in decision making;
Analyzing Risk;
Reading material: Damodaran (2015), chapters 2 and 3
Settimana 2
Topics:
The Investment decision;
Risk and return models; Estimating discount rates;
Reading material: Damodaran (2015), chapter 4
Settimana 3
Topics:
Investment Apprisal/Capital budgeting;
Return on Investments;
Project Interactions, side costs and benefits.
Reading material: Damodaran (2015), chapters 5 and 6
Settimana 4
Topics:
Capital Structure/Financing decision;
The optimal financial mix;
Financing details.
Reading material: Damodaran (2015), chapters 7,8 and 9
Settimana 5
Topics:
Dividend policy;
Analyzing cash returned to stockholders.
Reading material: Damodaran (2015), chapters 10 and 11
Settimana 6
Topics:
Valuation: introduction and objectives. Financial Statements Review
Free Cash Flow computation; APV and WACC methods
Settimana 7
Valuation I: Valuing Stocks. Dividend Discount Model, Total Payout Model, Discounted Free-Cash Flow Model, Multiple-based valuation. Reading material: Berk/DeMarzo (2014), Chapter 9.
Settimana 8
Valuation II: Estimating the cost of capital. Beta estimation, the debt cost of capital, project’s cost of capital. Reading material: Berk/DeMarzo (2014), Chapter 12.
Settimana 9
Valuation III: Capital budgeting and valuation with leverage. Weighted average cost of capital, project-based cost of capital. Reading material: Berk/DeMarzo (2014), Chapter 18.
Settimana 10
Real Options. Real versus financial options, the option to delay an investment opportunity, multiple projects. Reading material: Berk/DeMarzo (2014), Chapter 22.
Settimana 11
Raising Equity Capital. Equity financing for private companies, Initial Public Offering, Seasoned Equity Offering. Reading material: Berk/DeMarzo (2014), Chapter 23
Settimana 12
Mergers and acquisitions. Market reaction to a takeover, reasons to acquire, the takeover process, value added in takeovers. Reading material: Berk/DeMarzo (2014), Chapter 28.