The course provides an in depth understanding of the main companies’ financial decisions. At the end of the course, Students will be able to:
1) evaluate, estimate and forecast cash flows;
2) make decision on different investment and financial decisions opportunities;
3) evaluate and assess different ways of estimating the cost of capital;
4) evaluate the impact on the capital structure between debt and equity;
5) estimate risk and return for a single security and for a portfolio;
6) understand the main properties of the Capital Asset Pricing Model (CAPM), in association with the capital structure topics based on Modigliani and Miller theorems.
The course program is structured as follows:
1) representation and analysis of the company’s financial dynamics; the balance sheet pertaining to management; the notion of Net Operating Working Capital (CCNO); CCNO flows;
2) the use of the Net Present Value (NPV) as a criterion for analyzing corporate decisions; the rate of return used in calculating the NPV (the notion of Weighted Average Cost of Capital);
3) the valuation of shares and bonds;
4) alternative criteria for the valuation of investments under conditions of certainty and uncertainty;
5) Portfolio Theory and Capital Asset Pricing Model (CAPM);
5) the determinants of the firm’s value; the evaluation of the company without debt and with debt; required risk and return and capital valuation of the firm.
6) Modigliani and Miller’s theorems and their implications for firm valuation; consistency between flows and rates in valuation processes.
The course will also have a particular sensitivity towards issues relating to the “Ecological Transition” and “Technological Transition”, including the rethinking in a green key and the use of digital technologies in the construction of portfolios
Knowledge of accounting, financial mathematics and statistics are recommended.
Compulsory prerequisites required (Propedeuticità) are published on the web site: https://lt-ea.unibg.it/it/node/122
The teaching will be conducted through lectures and exercises involving the student’s participation. During the course, hours of exercises involving the operational implementation of the most important issues will be provided.
At the end of the course, there will be a final written of 70 minutes. The exam will be structured in 11 exercises of which 8 (3 points each) and 3 (2 points each). The 3-point exercises require logical skills, while the 2-point exercises require the simple application of formulas.
The course program is structured as follows:
1) representation and analysis of the company’s financial dynamics; the balance sheet pertaining to management; the notion of Net Operating Working Capital (CCNO); CCNO flows;
2) the use of the Net Present Value (NPV) as a criterion for analyzing corporate decisions; the rate of return used in calculating the NPV (the notion of Weighted Average Cost of Capital);
3) the valuation of shares and bonds;
4) alternative criteria for the valuation of investments under conditions of certainty and uncertainty;
5) Portfolio Theory and Capital Asset Pricing Model (CAPM);
5) the determinants of the firm’s value; the evaluation of the company without debt and with debt; required risk and return and capital valuation of the firm.
6) Modigliani and Miller’s theorems and their implications for firm valuation; consistency between flows and rates in valuation processes.
The course will also have a particular sensitivity towards issues relating to the “Ecological Transition” and “Technological Transition”, including the rethinking in a green key and the use of digital technologies in the construction of portfolios.
