The course provides a thorough understanding of the key decisions companies, that is investment decision and financing decision. The course provides a thorough understanding of the factors affecting these decisions. In particular, it assesses the different ways of estimating the cost of capital, forecasting cash flows, choosing between debt and equity. Students will learn, also, to figure out returns and risks for individual assets and for portfolios of assets. They will also use benchmark models of risk, such as CAPM and its impacts on the important decisions surrounding the choice that a firm must make regarding its financial structure. Moreover the student will know to develop a financial analysis to evaluate the firm credit worthiness
Course Prerequisites
In addition to those required by the degree program, knowledge of accounting and financial mathematics are recommended
Compulsory prerequisites required (Propedeuticità ) are published on the web site: https://lt-ea.unibg.it/it/node/122
Teaching Methods
The teaching will be conducted through lectures and exercises involving the student’s participation. During the course, each 4 hours of lecture there will be 2 hours of exercises involving the operational implementation of the most important issues.
Assessment Methods
At the end of the course there will be a final written test lasting 70 minutes. The written test is structured in 11 exercises t There will be as well four non-compusory test
Contents
Cash flow analysis; evaluation criteria in conditions of certainty and uncertainty (portfolio selection and CAPM); cost of capital for financing decisions; financial structure theory (MM theorem); financing/investment interaction; capital budgeting in the levered firm. Financial analysis and working capital management. Problems of application are dealt with in the practical lessons (attendance is highly advisable)
