Part I: Short-Term and Long-Term Financing

Topic 1. Working Capital Management
Topic 2. Short-Term Financial Planning
Topic 3. Equity and Debt Financing
Topic 4. Leasing

Part II: Investment Decisions

Topic 5. Investment Decision Rules
Topic 6. Real Options

Part III: Special Finance Topics

Topic 7. Corporate Governance
Topic 8. Mergers and Acquisitions

The general objective of the course is to provide students with a broad overview of corporate finance, with special focus on the most relevant finance decisions that managers of any business type (large or small) will have to face. In particular, the topics covered in the first part include short- and long-term financing (focusing on working capital management, equity and debt financing, and leasing). In the second part, the course deals with investment decisions (covering investment decision rules and real options). Furthermore, other special topics such as the takeover decision and corporate governance mechanisms are studied in the third part of the course.

After completing the course, students should:

• Be able to compute the cost of trade credit and compare it to alternative sources of financing.
• Understand the different types of financing that may be used for short-term cash needs.
• Know the ways in which a private company can raise outside capital and understand the effects of a company founder selling stock to an outsider.
• Identify typical sources of debt for corporations and understand their specificities.
• Know the rights and obligations of each party in a lease contract and be able to compute the cost of leasing.
• Recognize different investment decision rules (e.g., NPV, IRR, payback period) and the advantages and disadvantages of each of them.
• Understand the usefulness of real options for corporate decision-making and identify different types of real options.
• Recognize the relevance of an adequate corporate governance structure to reduce agency problems.
• Be able to identify the most relevant aspects of a takeover, including the gains to both acquiring and target firms.

The course will consist of: (a) lectures, in which the different topics will be presented, and (b) seminars devoted to the solution of numerical problems and to the discussion of business cases. Students are expected to prepare the exercises in advance, before solving them in class.

Assessment

The final grade of the course will be a weighted average of the following three components:

1. Active participation and solution of exercises: 25% of the grade

2. Intermediate exam: 25% of the grade

3. Final exam: 50% of the grade

Each component will be graded based on the following scale (percentage grade):

• 91-100% = Very good
• 81-90% = Good
• 66-80% = Satisfactory
• 51-65% = Sufficient
• 0-50% = Not sufficient

Registration should be made via LPIS.

Maximum number of participants: 30.

Students should have basic knowledge of finance concepts and financial mathematics.

Ignacio Requejo: irequejo@usal.es