2019-2020 / FINA0050-1

Corporate Finance - Lectures and Seminars


30h Th

Number of credits

 Master in management, professional focus in law and management5 crédits 
 Master in management, professional focus in law5 crédits 
 Master in management (120 ECTS)5 crédits 
 Master in business engineering (120 ECTS)5 crédits 
 Master in management (60 ECTS)5 crédits 
 Extra courses intended for exchange students (Erasmus, ...)5 crédits 


Marie Lambert

Language(s) of instruction

English language

Organisation and examination

Teaching in the first semester, review in January


Schedule online

Units courses prerequisite and corequisite

Prerequisite or corequisite units are presented within each program

Learning unit contents

The course of "Corporate Finance" lays the theoretical and practical foundations for valuing firms and corporate investment projects as well as for dealing with short-term and long-term financing decisions.

The course starts with a general introduction about Corporate Finance. With the objective of maximizing firm value, the course will address the following key questions:

  • In what long-lived assets should the firm invest? Capital budgeting/Investing decisions
  • How can the firm raise cash for its required capital expenditures? Financing decisions and capital structure
  • How should short-term operating cash flows be managed? Timing of cash flows and short-term financing decisions

The course is structured into eight blocks. For each block, we organize lectures, exercises sessions and seminars (see "Planned learning activities").

Block 1: Introduction to Corporate Finance (Fundamentals)
Basics of discounting and valuation (time value of money, effective/nominal/proportional interest rates) 

Block 2: Financial analysis

  • Financial statement analysis
  • Financial statements and applicable adjustments 
  • Horizontal/vertical common-size statements 
  • Financial ratios (liquidity, solvability, profitability, efficiency)

Block 3: Free Cash Flows to the Firm
Cash flows available for both providers of capital

Block 4: Cost of capital

  • Review of financial market theory: CAPM, Yield curve, business vs. financial risk

  • Cost of equity, cost of debt
  • Capital structure
  • Debt tax shield

 Block 5: Discounted Cash flow
  Income approach: Finite and infinite life

Block 6: Firm valuation
DCF : Infinite life analysis

  • Effect of leverage and capital structure 
  • Weighted average cost of capital 
  • Determination of the Free Cash Flows to the Firm and forecasts 
Market approach

  • Introduction to multiple analysis (relative valuation)

Block 7: Capital Budgeting

  • Finite and infinite life analysis 
  • Net Present Value (NPV)
  • Determination of the Free Cash Flows to the Firm and forecasts 
  • Weighted average cost of capital 
  • Effect of leverage and capital structure

Block 8: Alternative investment rules
  Alternative investment rules: the Internal Rate of Return (IRR), Payback, Accounting Rate of Return, Profitability ratio 


Learning outcomes of the learning unit

Consistently with the Key Learning Outcomes (KLO), students will develop the following individual capacities:
(1) Students will be able to execute the financial management of a company.
(1.1) They will acquire the fundamental knowledge and understanding in financial management to perform a rigorous analysis of a management problem such as an investment project, a firm valuation or (short-term, long-term) financing decisions.
(1.2) Especially, they will (i) compute and forecast cash flows used for project or firm valuation, (ii) estimate the prevalent cost of capital to be used to discount cash flows, (iii) compute the Present Value of an investment project or a firm, (iv) value business acquisition opportunities and, (v) make a deep analysis of the working capital needs of a firm.
(2) They will learn how to establish a strategy to answer concrete complex and transversal financial management problems by applying modelization tools and by making use of market data.
(3) They will strengthen their communication skills in business related problems and in English and develop a transversal view of a financial management problem to adapt their management practices in the specific context of a firm or project valuation and financing.

Prerequisite knowledge and skills

The course will extend students' knowledge acquired during an initial bachelor's degree in management. The course therefore requires basic knowledge in financial mathematics, financial analysis and reporting (see infra) and financial markets. As a prerequisite, students are invited to read Chapters 2,3,4,5 and 23 of Hillier, Grinblatt and Titman, Financial Markets and Corporate Strategy (second European edition).
Review of the prerequisites in financial market theory and financial analysis will be covered during the introductory lecture, Block 1 on fundamentals, Block 2 on financial analysis and Block 4 on the WACC.

Planned learning activities and teaching methods

The course is structured into eight blocks composed of theoretical lectures (all students, on Thursdays) and practical seminars (in 2 sub-groups, on Fridays).
The detailed planning can be found on lol@ in the introduction slides. 
The course is structured into lectures, exercises sessions and seminars.
Lectures will transfer to students the theoretical knowledge and the practical tools for solving complex investment and firm valuation problems. Students are expected to participate to class and to read the related chapters in the textbook. Exercises sessions will be organized on each module and will be integrated to the lectures.

Two courses (one group made of all students) will wrap up the competencies acquired during the lectures, exercises sessions and seminars. One will be organized end of October or beginning of November and another in December. It will prepare students for the exam. One final Questions and Answers session will be organized on 20th December.

Practical case studies will enable students to test their capacity to research autonomously and methodically the information needed to solve a transversal management problem and to test their capacity to use modelization tools to propose rigorous solutions to complex financial management problems. 
Seminars occur on Fridays. Students are split in groups. 
Seminar 1 on Block 1 will provide students with the tools to understand the financial fundamentals of a company and to conduct a first financial due diligence.
  Seminar 2 on Block 2 will provide students with the tools to prepare a business plan.
Seminar 3 on Block 3 will provide students with the tools to evaluate the cost of capital of a firm or of a project.
Seminar 4 on blocks 4 to 6 will provide students with practical tools for firm valuation (Blocks 7).
Seminar 5 will consist of workshops with practitioners. The objective will be to illustrate the context in which the tools and methods covered in the course are used in practice to answer management problems from different areas and scope.
Seminar 6 on block 7 will provide students with tools to evaluate capital budgeting decisions (first in finite life and then in infinite life). 

During the seminars, students will work in groups on case studies. Homeworks will be asked to students in order to prepare the session or finalize the work started during the seminar. The students should bring their laptop to the seminar and check their group and schedule on lol@.
Remarks : This planning is subject to changes. Any change with regard to this planning will be announced on the online platform lol@


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

The course is composed of face-to-face lectures, exercise sessions and seminars. Exercise sessions and case study analyses will be prepared through distance learning.


  • Lectures start on the week of October 3rd. All practical information will be provided during the first course (textbooks, schedule, groups). Attendance is strongly recommended. 

  • Lectures take place on Thursdays and seminars on Fridays (in 2 groups).

    For the seminars, groups will be formed according to alphabetical order (first letter of students' lastname). One group will start the seminar at 8.00 AM and another group will start at 10.30 AM. 
    Students whose last name starts with a letter from A to K will be part of Group 1 and students from L to Z will be part of Group 2.
    This group split might be adjusted according to the number of students. However these groups will be valid for the first seminar. More information will be provided in class and on lol@.
    In exceptional cases and upon justification, changes from groups will be allowed. An email should be sent to Maxime Ledent min. one week before the session. Students are not authorized to attend another group without a confirmation email from the assistant.

  • Except in case of technical problems, a collaborative platform will be used during the course in big group for promoting interactions and questions. Surveys at the end of the course will also be organized periodically to gather information about the students' learning progress and to detect any understanding problems.
  • Self-assessment quizzes will be available on lol@ in order to train for the exam (Multiple choice questions)
  • One forum will be set up on lol@ and animated by the assistants (Maxime Ledent and Joachim Davoli). Students will receive answers to their questions at the latest on Thursday of week Y for questions asked before Friday of week Y-1. Students are asked to make use of the forum to ask questions regarding the course rather than emails. They will be automatically redirected to the forum. 

Recommended or required readings

Mandatory readings
- Hillier, Grinblatt and Titman, Financial Markets and Corporate Strategy, McGraw-Hill, Second European Edition
- Equity Valuation, CFA Institute
For the prerequisites, please see supra. Chapters covered in class will be announced in class.
These readings will enable students to deepen their understanding of the key concepts seen throughout the course. Students' understanding will be tested at the written exam.
Recommended readings
Financial Statement Analysis: An introduction by Elaine Henry, CFA, and Thomas R. Robinson, CFA
Financial Reporting Mechanics - International Financial Statement Analysis, by Thomas Robinson, CFA, Jan Hendrik van Greuning, CFA, Elaine Henry, CFA and Michael A. Broihahn, CFA
Financial Reporting Standards by Elaine Henry, CFA , Jan Hendrik van Greuning, CFA, and Thomas R. Robinson, CFA
Understanding Income Statements by Elaine Henry, CFA and Thomas R. Robinson, CFA
Understanding Balance Sheets by Elaine Henry, CFA, and Thomas Robinson, CFA
Understanding Cash Flow Statements by Elaine Henry, CFA and Michael A. Broihahn, CFA
Financial Analysis Techniques by Elaine Henry, CFA, and Thomas R. Robinson, and Jan Hendrik van Greuning, CFA
Inventories by Michael Broihahn, CFA
Long-lived Assets by Elaine Henry, CFA and Elizabeth A. Gordon
These readings will enable students to deepen their understanding of the prerequisites for the course: Financial Reporting and Analysis. 
Course material
The course material (slides, case studies and exercises) will be available on the course web page on lol@: http://lola.hec.ulg.ac.be

Assessment methods and criteria

A written exam (multiple choice exam) will assess students' understanding of concepts linked to investment's project and firm valuation as well as students' capacity to solve problems. It counts for 100% of the grade.
Students who fail the January exam or do not present themselves at the exam will have to retake the exam in the second session organized in August/September. There is no intermediary session.

Exam visit
Students have the right to review their exam copy after the publication of the results. The student has to contact the professor within max. the two weeks following the announcement of the results. The meeting with the student should be organized within the month of the release of the result.

Work placement(s)


Organizational remarks

Students have the opportunity to ask questions on the material during the class (please use the interactive tool!). Outside the course hours, students should send their questions to the teaching assistant maxime.ledent@uliege.be who will inform the student about student office hours.

A final Questions and Answers session will be organized on December 20th.
Students are invited to check the lol@ platform on a regular basis for any practical information regarding the course or any schedule change.


Marie Lambert - Professor at HEC - marie.lambert@uliege.be

Teaching assistants:
Joachim Davoli - joachim.davoli@uliege.be
Maxime Ledent - maxime.ledent@uliege.be