Applied Corporate Finance

General characterization

Prerequisites

Bibliography

Berk, Jonathan and DeMarzo, Peter, Corporate finance, 4th ed, Pearson, 2016.

Gaughan, Patrick A. Mergers, acquisitions and corporate restructurings 6th edition, John Wiley & Sons, 2015.

Koller, Tim, Goedhart, Marc and Wessels, David Valuation: Measuring and Managing the Value of Companies, 6th ed, University Edition, McKinsey & Co, Wiley Finance, 2015.

DePamphilis, Donald Mergers, acquisitions, and other restructuring activities, 8th ed, Academic Press, 2015.

Rosenbaum, Joshua and Pearl, Joshua Investment Banking: Valuation, Leveraged Buyouts and Mergers and Acquisitions, 2nd edition, Wiley Finance, 2013.

Resources

Course web page at UNL intranet.

Powerpoint slides available at the course page.

Teaching method

This course uses a combination of formal lectures and case-study discussions, with an emphasis on the latter. All students enrolled will form groups of 5 members. All groups are required to submit 6 written case reports, three on each half-semester. Graders will allocate groups to cases in order to guarantee a sufficient number of written reports for each case. Students should be ready to share their analyses in class presentations and to actively participate in all class discussions, regardless of having been allocated (or not) a particular case for written report. All case-studies identified on the syllabus will be used for assignment (although each group is limited to six written reports) and will be discussed in class. All students are assumed to have read and analysed all case-studies and to be ready to publicly present their conclusions and answer any questions posed by the instructor on them. Sometimes, cases will be used as a basis for role playing by different groups of students of real-life simulated events. More than one group may be involved in class presentations.

When cases are assigned to groups, one of the student groups who prepared the written report will be asked to present to the class their own recommendations. Oral case presentations have a 30 minute time limit. Once the initial presentation is over, other students will be asked to comment on the previous presentation (15 minute time limit). Such comments should emphasize each group’s conclusions and supporting arguments. The discussion is open to all students in the class. Then, the instructor will highlight the main conclusions and the key learning benefits achieved with the case analysis and discussion.

Written reports are expected to have the quality of presentations by consultants or investment bankers to the Board of Directors of the Company. They are usually submitted in Powepoint format. These reports should specifically address the issues raised by the instructor via a previously posted set of questions. All reports should start with a first-page "executive summary" that identifies main issues and summarises fundamental recommendations. Then, the report should address the issues raised by the instructor. There is a rather “free format” for the reports, and emphasis should be placed on the originality of the analysis provided and the overall professional quality of the presentation. Mere repetition of case information is strongly penalised. Focus on the key issues is preferred against lengthy presentations of useless facts and data. The latter will also be severely penalised.

All students are expected to actively participate in class. Absence of or poor class participation will be graded with zero. Class participation may either have a positive or negative impact on your grade.

Evaluation method

The final exam is mandatory and must cover the entire span of the course. The weight of the final exam should not be less than 30% nor exceed 70%. The remainder of the evaluation can consist of class participation, midterm exams, in class tests, etc. Overall, written in class assessment (final exam, midterm) must have a weight of at least 50%.

• Group (5 people per team) written reports on the case-studies: 40%

• Individual participation on class discussions and presentations: 20%

• This item will be strictly graded between: 0-20

• Final Exam: 40%

• Minimum required exam grade: 9.5 (/20)

Subject matter

• The Concept of Value;

• Value and Growth;

• Capital Budgeting;

• Real options;

• Corporate Valuation (DCF and multiples);

• Mergers and Acquisitions: analyzing mergers, valuing synergies, tactics;

• Financing Acquisitions;

• Capital Structure and Financial Policy;

• Capital structure decisions in practice;

• Raising Capital, IPO's and SEO's;

• Leveraged Reorganisations and LBO's;

• Payout policy, dividends and share buybacks;

• Divestments, spin-offs, carve-outs;

• Financial Planning;

• Cash management;

• Corporate distress;

• Bankruptcy Reorganisation;

• Corporate Governance.

Programs

Programs where the course is taught: