GRA 6514 Corporate Finance

GRA 6514 Corporate Finance

Course code: 
GRA 6514
Department: 
Finance
Credits: 
6
Course coordinator: 
Salvatore Miglietta
Product category: 
Master
Portfolio: 
MSc in Finance
Semester: 
2019 Autumn
Active status: 
Active
Teaching language: 
English
Course type: 
One semester
Introduction

The main aim of the course is to provide an insight into more advanced topics in corporate finance, which are necessary for both financial managers, financial analysts and consultants. It starts with a review of the basic concepts of financial management and valuation. It then focuses on optimal corporate policy, in regards to capital structure, investment and payout policy, in the presence of market imperfections. The final part of the course looks at more advanced topics in corporate finance such as agency problems and advanced valuation. 

Learning outcomes - Knowledge

Students at the end of the course should be able to

  • Identify the sources of the costs and benefits of equity and debt financing.
  • The impact of different financing decision on the firm's cash flow.

 

Learning outcomes - Skills

Students at the end of the course should be able to

  • Quantify the impact of the cost and benefits of financing on the value of the firm and its performance.
  • Understand under what circumstances equity financing is more desirable than debt financig or vice versa.
General Competence

The course will provide students with the principles and the skills to make informed decisions on capital structure and capital budgeting issues.

Course content
  • Financial statements and capital budgeting
    • Financial statement analysis (information, statements, Bloomberg)
    • Review of the time value of money and investment decision rules 
    • Forecasting cash-flows
    • Cost of capital (determinants of interest rates, debt cost of capital, using CAPM)
  • Capital structure
    • Perfect markets
    • Debt and taxes
    • Financial distress, managerial incentives and information
  • Payout policy and stock valuation
    • Valuation models (dividend-discount, total payout, free cash flow, comparable firms)
    • Payout policy (dividends vs. share repurchases, dividend and capital gains taxes, dividend smoothing and signalling)
  • Advanced valuation
    • Capital budgeting and valuation with leverage
    • The project cost of capital
    • Real options
Teaching and learning activities

Lectures: in the lectures we will cover theories aimed at identifying cost and benefits of different financing choices and understand their impacts on the firm value and performance. The teaching will cover theories, their proofs, and the solution of simple valuation/capital structure cases and problems.

Homework: The homework will require the application of the notions and solution techniques covered in class to solve more complex capital structure and valuation problems.

Bloomberg self instruction: this is an introduction to the main digital financial data source availabe on the market.

 

Software tools
No specified computer-based tools are required.
Additional information

Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.

This is a course with continuous assessment (several exam components) and one final exam code. Each exam component is graded by using points on a scale from 0-100. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the examination code (course). Students who fail to participate in one/some/all exam elements will get a lower grade or may fail the course. You will find detailed information about the point system and the cut off points with reference to the letter grades when the course starts.

At resit, all exam components must, as a main rule, be retaken during next scheduled course.

Honour Code

Academic honesty and trust are important to all of us as individuals, and represent values that are encouraged and promoted by the honour code system. This is a most significant university tradition. Students are responsible for familiarizing themselves with the ideals of the honour code system, to which the faculty are also deeply committed.

Any violation of the honour code will be dealt with in accordance with BI’s procedures for cheating. These issues are a serious matter to everyone associated with the programs at BI and are at the heart of the honour code and academic integrity. If you have any questions about your responsibilities under the honour code, please ask.

Qualifications

All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.

Exam categoryWeightInvigilationDurationSupport materialsGroupingComment exam
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA65141
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
15No 1 Semester(s)Group/Individual ( 1 - 4)Assignments, each one week long.
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA65141
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
10No 1 Semester(s)Individual Bloomberg assignment (self-taught online course)
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA65141
Grading scale:
Point scale
Grading rules:
Internal examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
25Yes2 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual Mid-term written examination under supervision
Exam category:
Submission
Form of assessment:
Written submission
Exam code:
GRA65141
Grading scale:
Point scale
Grading rules:
Internal and external examiner
Resit:
All components must, as a main rule, be retaken during next scheduled course
50Yes2 Hour(s)
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Individual Final written examination under supervision
Exams:
Exam category:Submission
Form of assessment:Written submission
Weight:15
Invigilation:No
Grouping (size):Group/Individual (1-4)
Support materials:
Duration: 1 Semester(s)
Comment:Assignments, each one week long.
Exam code: GRA65141
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:10
Invigilation:No
Grouping (size):Individual
Support materials:
Duration: 1 Semester(s)
Comment:Bloomberg assignment (self-taught online course)
Exam code: GRA65141
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:25
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:2 Hour(s)
Comment:Mid-term written examination under supervision
Exam code: GRA65141
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Exam category:Submission
Form of assessment:Written submission
Weight:50
Invigilation:Yes
Grouping (size):Individual
Support materials:
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
Duration:2 Hour(s)
Comment: Final written examination under supervision
Exam code: GRA65141
Grading scale:Point scale
Resit:All components must, as a main rule, be retaken during next scheduled course
Type of Assessment: 
Continuous assessment
Grading scale: 
ECTS
Total weight: 
100