University of Commerce Luigi Bocconi

This course provides an introduction to the most important aspects of corporate finance. The objective is to acquire the essential skills necessary to actively deal with the corporate finance activities of an internationally operating firm. The course explores both investing and financing decisions, focusing on their role in the creation of shareholder value. The course covers four main parts. The first part covered is the value of a firm, including financial instruments, valuation concepts, and decision rules. The second part is risk and return, including theory, empirical evidence, and applications to capital budgeting. The third part of the course is financing decisions and market efficiency. The fourth part of the course is payout policy, capital structure, and valuation. Topics covered include: finance and the financial manager; valuing bonds and common stocks; NPV and investment decisions; risk, return and the opportunity cost of capital; capital budgeting and risk; efficient markets and behavioral finance; payout policy, debt policy, and capital structure; financing and valuation. Students attending this course should be familiar with the basics of mathematics, statistics, financial mathematics, accounting, and financial markets and institutions. In particular, students should have reasonable knowledge of the basics in financial mathematics such as the time value of money, annuities, and perpetuities; basics in statistics such as probabilities, variances/covariances, and ordinary least squares; basics in accounting such as being able to read information contained in balance sheets, income statements, and cash flow statements.