Duration
30h Th
Number of credits
Lecturer
Substitute(s)
Language(s) of instruction
English language
Organisation and examination
Teaching in the first semester, review in January
Schedule
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;
- students with 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.
The course is structured as follows:
Introduction
Part I: Corporate decisions and firm value
- Module 1: Financial analysis and valuation
- Module 2: Capital structure, distribution policy and firm value
- Module 3: Agency theory, performance-based management and corporate organizational priorities
- Module 4: Advanced Capital Budgeting techniques
- Module 5: Start-ups and scale-ups
Part II: Corporate Finance Advisory - M&A and equity research
- Module 1: Equity research
- Module 2: Buyouts - Case studies and group project
Learning outcomes of the learning unit
Consistent 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, Banking 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, hybrid learning)
The course is composed of (face-to-face or online) lectures, exercise sessions and case discussions. In addition, registration for the course involves participation in the acquisition case (half a day) co-organised by Deloitte Private. This case will serve as an introduction to the group project.
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
Mandatory readings (course material)
- The course material (slides, references to case studies and exercises) will be available on the course web page on lol@: http://lola.hec.ulg.ac.be
- Students have to acquire the case studies by following this link: https://hbsp.harvard.edu/import/974815
- Book chapters: Ludovic Phalippou (Professor, Oxford), Private Equity Laid Bare (Chapters 1 to 4)
- 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 - Damodaran, Investment valuation
Students are highly encouraged to refer to these books to improve their understanding of the key concepts and modelling tools used throughout the class.
Exam(s) in session
January exam session
- In-person
oral exam
August-September exam session
- In-person
oral exam
Written work / report
Continuous assessment
Additional information:
Grade split in the first session: 60% "buyout" project and 40% "corporate policy advisory" project. Both projects are conducted on the same company.
Comments on the buyout project grade (60%):
- The project consists in a report (slides format) on the company buyout process (more information on the learning platform) as well as a project oral defence. The project is prepared in group.
- An anonymous peer review form will need to be filled out by each member.
- During the oral group defence of the project, all members of the group are expected to actively participate in the presentation and Questions and Answers. Participation to the oral defence with his/her group is mandatory.
- Continous evaluation of the individual involvement of each student to the project (for instance via the tutorials organized in class, quizzes and other assignments)
Comment on the "corporate policy advisory" project (40%)
This project is individual and consists in performing a critical analysis of a company's distribution, capital structure, capital budgeting policies and CSR policy with the implication on its valuation.
Retake exam (August)
- 75% oral exam
- 25% take-home assignment
Work placement(s)
none
Organisational remarks and main changes to the course
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.
Several tutorials are organized for the group project. Students must first use these sessions in case of questions regarding to the group project. Specific instructions on how (and what) to prepare for the tutoring sessions will be provided to students at the beginning of the course and will be available on the online platform.
Students are invited to regularly check the lol@ platform for announcements regarding the course.
Contacts
Professor:
Marie Lambert - marie.lambert@uliege.be
Teaching assistant:
Alexandre Scivoletto - Alexandre.Scivoletto@uliege.be