Financial investments and corporate finance

Module Corporate Finance
The course aims at providing knowledge of the financial aspects of an enterprise or corporation in order to enable students to assess its prospects, estimate its value, understand the process for deciding the investments underpinning its growth, judge the best way to source funds for such investments, understand hedging and payout decisions, all in the context of the financial and institutional environment in which firms operate.

Module Financial Investments
The course aims at giving an in-depth overview of modern portfolio theory, with a specific focus on risk-return trade-off, portfolio optimization, implementation using index models, and risk management in the context of portfolios of fixed-income securities and stocks.

Instructional objectives that students are expected to achieve:
Issues of corporate governance and introduction to a company's books. The balance sheet, book equity, market value of equity: value and prices, Enterprise Value
Income and cash flow statements, liquidity and working capital management ratios. Working capital management (cont'd), financial adequacy, profitability and valuation ratios and indicators
Compounding, discounting, the Time Line, Present Value, Future Value, perpetuities, annuities, both simple and growing. Bond's dynamic behavior; risk: corporates and sovereigns; bond ratings; towards a hurdle rate. Market risk-return, diversification and the Capital Assets Pricing Model
Debt expected return, debt beta, WACC, assets beta, hurdle rates. The Modigliani-Miller propositions: assumptions, formulas, predictions. Debt, tax shield, costs and benefits of debt, optimal capital structure
Equilibrium in capital markets, portfolio theory and practice: to understand theory and empirical evidence behind optimal risky portfolios; capital asset pricing models; arbitrage pricing models, single-index and multifactor models of risk and return.
The efficient market hypothesis, and the behavioral finance: to understand theory and empirical evidence behind well-functioning markets, irrational behaviors and bubbles.
Risk management in the context of fixed-income securities: to understand bond prices and yields, the term structure of interest rates, managing bond portfolios.
Risk management in the context of stock securities: to understand macroeconomic and industry analysis, equity valuation models, financial statement analysis.
Portfolio performance evaluation: to understand the reasons for the use of risk-adjusted indicators, to calculate and use them.