Advanced Corporate Finance and Modeling

Duration

30h Th

Number of credits

Lecturer

Marie Lambert

Language(s) of instruction

English language

Organisation and examination

Teaching in the first semester, review in January

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

The course provides students with a comprehensive understanding of the key capabilities CFOs need to acquire in order to create a successful finance function: How to perform diagnostics on company's operating performance? How to lever on the key value drivers and improve its performance ? How to design value creating investment, financing or distribution strategies? How to generate external growth inside the company and structure a buyout (due diligence, buyout process and debt-quasi equity financing)?
 
The course also introduces students to equity research and fundamental analysis (sector, industry and company) with all its applications in portfolio management and company acquisitions (private deals).
 
Especially, the course provides 

• students with modeling tools and advanced techniques for capital budgeting and firm and equity valuation;
• students with tools to conduct a fundamental analysis (due diligence) about one company;
• for students an opportunity to develop a thorough understanding of how financing as well as the firm's dividend policy could affect the market value of the firm and distort investment decisions;
• students with tools to design sound corporate strategies at each point of the firm financing cycle (leveraged recapitalization, leveraged buyout, management buyout);
• students with financing tools (senior versus junior debt, bullet debt, mezzanine financing, debt push down mechanism, paid-in-kind and cash interests, club deals and syndication);
• students with modeling tools to structure a private equity deal.

Learning outcomes of the learning unit

Consistently with the Key Learning Outcomes, students will acquire the following capacities at the end of the Advanced Corporate Finance and Modeling course:

• They will strengthen their knowledge and understanding in firm performance management and corporate finance and use modeling tools to design creative solutions to value an investment project or to structure the acquisition of a firm/the financing of one specific project;
• They will develop their ability to professionally team work and their critical sense for implementing solutions to a selection of key corporate finance challenges for managers;
• They will use modeling tools and their managerial knowledge to execute the solution;
• They will adapt their managerial practice to the economic context and to the transversal nature of management problems by integrating autonomously researched information
• They will professionally communicate and defend, in groups or individually and in English, their transversal view of real financial management problems.

Prerequisite knowledge and skills

The course will extend students' knowledge in corporate finance acquired during an initial bachelor's degree and/or the first year of the master in management. Basics of corporate finance are prerequisites for the course.
 
Students who need to acquire the prerequisites are invited to read the following chapters:
- Accounting statements and cash flows: working knowledge of key financial statements, i.e. income statement, balance sheet and cash flow statement  Please read Chapters 2 and 3 - Ross, Westerfield and Jaffe. 2008. Corporate Finance. New York: McGraw-Hill, 8th edition;
- Basics in capital budgeting: working knowledge of discounting/compounding, of Net Present Value (NPV) and Internal Rate of Return (IRR) concepts Please read Chapters 4 to 7 - Ross, Westerfield and Jaffe. 2008. Corporate Finance. New York: McGraw-Hill, 8th edition;
- Mean-variance analysis: working knowledge of the Capital Asset Pricing Model (CAPM) Please read Chapter 5 - Hillier, Grinblatt and Titman. 2012. Financial Markets and Corporate Strategy. New York: McGraw-Hill, 2nd European edition.

Planned learning activities and teaching methods

Modules will be sequenced with lectures and discussions on a selection of case studies illustrating corporate financial decisions.

Lectures will introduce the theoretical concepts and modeling/analytical tools, while case study analyses will enable students to use these tools to solve complex management problems.

Workshops with professionals in corporate finance (Private Equity, banker and/or Corporate Finance Advisory) will provide students with the market reality of their local economic region.

Mode of delivery (face-to-face ; distance-learning)

The course is composed of face-to-face lectures, exercise sessions and case discussions.
Working sessions with professionals from global equity research, private equity and banking sectors will be organized (within the framework of the final course project - Leveraged Buyout Case).
 
Exercise sessions and case study analyses will be prepared through distance learning.

Recommended or required readings

Recommended readings from the following books will be assigned during the class:

• Ross, Westerfield and Jaffe (eighth edition), Corporate Finance, McGraw-Hill
• Grinblatt and Titman, Financial Markets and Corporate Strategy, McGraw-Hill, International Edition
• Real Options: Managerial Flexibility and Strategy in Resource Allocation, Lenos Trigeorgis
• Equity Asset Valuation Workbook, 3rd Edition by Jerald E. Pinto, Elaine Henry, Thomas R. Robinson, John D. Stowe November 2015, Paperback

Assessment methods and criteria

Student's final grade for the Advanced Corporate Finance and Modeling course is a weighted average of the student active participation to solving case studies and as well as their capacity to defend orally their point of views in class during working sessions, lectures and during oral defense of their group projects (30%), students' collective work (35%) and the final written exam (35%).


The final written exam will assess the student's capacity to propose concrete and original solutions to corporate challenges such as capital budgeting decisions, capital structure decisions, corporate strategy and firm merger and acquisition as well as to dividend policy and firm agency structure. The students are asked to analyse and propose solutions to a selection of mini case studies.

Through the case studies, students' capacity to use their modeling and analytical skills for solving specific management problems in corporate finance (financial distress, takeover, investment project,...) is tested. The group work on the case studies makes up 35% of the continuous evaluation. The students receive an individual grade making up 30% of their continuous evaluation on the basis of their oral presentations, the answers provided to questions during presentations and their active participation to other group presentations.

Relative weighting of individual assessment : 65%

Remark:

• Students who fail the first session exam or do not present themselves at the exam will have to (re)take the exam in the second session organized in August/September. There is no intermediary session.
• Students who did not participate to the class assignments, will not be allowed to participate to the first session's exam. They will directly take the second session exam (40%) and be given on top an individual assignment accounting for 40% of their final grade. They will receive 0/20 for their ability to work in group.
   

Work placement(s)

none

Organizational remarks

Students have the opportunity to ask questions on the material during the class or at the end of each session. Upon request, one Questions and Answers session with the tutors might be organized.
For each assignment, groups are allowed to a single meeting with one of the tutors to answer their questions.

Students are invited to regularly check the lol@ platform for announcements regarding the course.

Contacts

Professor:
Marie Lambert - marie.lambert@ulg.ac.be
Tutors:
Joachim Davoli - joachim.davoli@ulg.ac.be
Maxime Ledent - Maxime.ledent@ulg.ac.be

 

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