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Syllabus GF121A - GF121A : Adv. corporate fin. II - selected chapt.

Reprage du cours / Course specifications

COURSE TITLE Advanced Corporate Finance II

TEACHING LANGUAGE English

COURSE SUPERVISOR

Fabio BERTONI

Bureau A

04 78 33 70 03

bertoni@em-lyon.com

OFFICE HOURS Monday and Tuesday afternoon

CLASSROOM(S) See icampus

COURSE HOURS30 hours see icampus

ADMINISTRATIVE ASSISTANTGraldine Heurtel

heurtel@em-lyon.com

OTHER SPEAKERS none

PRE-REQUISITES

Basic knowledge of corporate finance isrequired (e.g. material covered in thecourse: Corporate Finance, previouslyFinance for Managers)

Objectifs pdagogiques / Learning goals

The course aims at giving a systematic view of selected topics in corporate finance including:

Capital structure and taxationCapital budgeting decisions with leverage and real options

Long-term financing:equity issuesdebt issuesthe specificities of small and medium enterprises

Concept cls / Key concepts

Concepts and theories to which students were exposed during the course:The trade-off theory of capital structureCapital budgeting with leverageReal optionsIPOs, SEOs, PIPEs and reverse mergersBond covenants and options embedded in bondsAlternative sources of finance: venture capital, business angels, bootstrapping,crowdfunding

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Connaissances / Knowledge

The knowledge acquired by the students at the end of the course:Know the trade-off theory of capital structureKnow how to include capital structure in capital budgeting decisionsKnow how real options affect capital budgeting decisions

Identify characteristics of equity financing and equity issues including IPOs, SEOs,PIPEs, and reverse mergersList the covenants and options that characterize bonds and their impact on bond valueKnow the specificities of SMEs financing

Comptences / Skills

The skills acquired by the students at the end of the course:Skill 1: to be able to evaluate the impact of leverage on the cost of capitalSkill 2: to be able to include capital structure in capital budgeting decisions

Skill 3: to be able to include real options in capital budgeting decisionsSkill 4: to be able to distinguish between different types of equity issues, understandtheir process and evaluate their costs and benefitsSkill 5: to be able to understand covenants and options embedded in bonds andassess their impact on bond valueSkill 6: to be able to evaluate the different financing options of SMEs, includingalternative financing channels such as venture capital, business angels, bootstrappingand crowdfunding

Livrables / Deliverable

The deliverables and productions that students will be able to present after havingtaken the course:

Complex capital budgeting casesCase studies on long-term financing

Postures / Attitude "Entrepreneur pour le monde"

The different entrepreneurs for the world postures/principles that students will have

developed through the involvement in the course:Critical posture: the course will develop the ability of the participants to critically assess the pros and cons of different long-term

financing options, and to understand the hidden assumption beh ind the most used capital budgeting evaluation methods

Responsible behavior: the course is partly based on workgroup by the students, whichwil l foster (and reward) their responsible behaviorCreative and original perspective: in the final lecture the students will be asked to do apresentation on a specific topic and the originality and creativity of the perspective theyhave on the topic will be taken into account in the evaluationRisk tolerance: within the course we will spend substantial time in understanding howreal options may enter into capital budgeting decisions, and one of the key conceptsthat will be explained is that the higher is risk, the higher is the value of the optionsembedded in a project

Expriences d'apprentissage / Learning experiences

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The learning experiences that students will live:Team-workInformation searchUse of financial toolsIn-depth studies

Modalits d'valuation / Evaluation of the learning outcomes

Form of the individual and group assessment + percentageIndividual assessment: 20% weekly quiz, 40% final examGroup assessment: 20% case study (capital budgeting application), 20% presentation(on real long-term financing case)

Evaluation des acquis / Outcomes assessment

Assessment of the acquired skills and knowledge:

Title Assessment method

Quiz Case study Presentation Final exam

Skill 1: Being able to evaluate the impactof leverage on the cost of capital

X X

Skill 2: Being able to include capitalstructure in capital budgeting decisions

X X X

Skill 3: Being able to include real optionsin capital budgeting decisions

X X

Skill 4: Being able to distinguishbetween different types of equity issues,understand their process and evaluatetheir costs and benefits

X X X

Skill 5: Being able to understandcovenants and options embedded inbonds and assess their impact on bondvalue

X X X

Skill 6: Being able to evaluate thedifferent financing options of SMEs,including alternative financing channelssuch as venture capital, business angels,

bootstrapping and crowdfunding

X X X

Modalits pdagogiques / Teaching methods

The following learning activities are recommended to achieve the learning outcomes:

Attend classesRead relevant book chaptersSolve end-of-chapter problemsParticipate in classroom discussions

Contribute to teamwork

Organization, methods and pedagogical means:

Slides

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Classroom discussionTeamworkingStudents presentations

Dtail des sances / Session details

Class 1: Presentation of the course and reminder of the basic concepts of corporate finance

Class 2: Long-term financing: equity issues (private placement and SEOs)Class 3: Long-term financing: equity issues (IPOs, PIPEs and reverse mergers)Class 4: Long-term financing: bond issuesClass 5: Long-term financing for SMEsClass 6: Capital structure and the cost of capitalClass 7: Capital structure and capital budgeting decisionsClass 8: Real options and capital budgeting decisionsClass 9: Capital structure, real options and capital budgeting decisions: applicationClass 10: Presentations of real cases of long-term financing

Bibliographie / Bibliography

Book: Berk and DeMarzo (2013): Corporate Finance (3rdedition), Global EditionRelevant slides will be available to download on iCampus before each classSelected newspaper articles and academic papers will be available to download oniCampus