CORPORATE FINANCE

MODULE-CODE
Semester 1, 2017 – 2018
Coordinator: THEODORAKIS Ioannis
Professor: REY François, E-mail: frey@inseec.com

Evaluation: Continuous evaluation (100%) = Group Presentation (30%), Mid-term

exam (30%), Final exam (40%)

INTRODUCTION
This course will build on the core curriculum finance courses from last year. After a
short summary of the key financial terms in English, this module will highlight a number
of specific corporate finance topics such as how large companies raise long-term funds.
In order to discuss these topics, there will be a mix of academic lectures and real-life
situations.
In addition, students are strongly encouraged to raise in class some corporate finance
issues they may have faced elsewhere such as in the context of internships, thereby
providing insights regarding several challenges that companies face. Academic articles,
case studies and group assignments will be used to support the learning process.
LEARNING GOALS
After this module, students will be able to better react on corporate finance decisions
made by the largest companies. It is widely expected that some students may want to
continue deepening their expertise in this sector first in the context of a third-year
finance-dedicated major, and then possibly professionally.

Therefore, students will have to demonstrate critical thinking as well as the ability to
Perform in an international environment. Some of the main themes that are included in
this module are:
- Review and analysis of major financial statements for companies
 - Company valuation based on market valuation multiples
- Cost of capital
- Initial public offering and stock markets

CLASS POLICIES

The following list refers to general class policies that the student should be aware of and
respect when in class.
 Computers or phones in class. This module requires active participation by the
students, which means that interference due to the use of laptops or phones will not
be tolerated.
 Disturbing the lecture. Whenever the professor estimates that the behavior of an
individual or group of students is not acceptable, he or she can decide to remove
those individuals.
 Arrive on time. Students who arrive more than 5 minutes late will not be admitted in
the class.
 Breaks. Each session has a break of 15 minutes. Students who will leave the class
during the break or will arrive after the break will be considered absent for the day.
 English. You have chosen a full-English program. This means that you will be in an
English-speaking environment. You are therefore required to speak English during
the lectures AND during the time that you are working with your group. Failure to
comply might influence your grade.
 Group assignment. The grade for the PPT presentation is a group grade but the
professor can deviate from this and change the grade for any individual student if
there are solid grounds for doing so (e.g. one or more students did not participate in
the group work).

EVALUATION
Individual evaluation
Students will be evaluated with two in-class written exams (mid-term and final) that will
count for respectively 30% and 40% of total grade. Students will have to review their
own notes taken in previous classes and also the relevant documents handed out in
class.
Evaluation criteria for the mid-term and final exam
Criterion 1: Criterion 2: ability to Criterion 3:
Understanding of use concepts in Accuracy in solving
terms and concepts exercises more complex
questions
Below Requirements Student is not able to Student is not able to Student is not able to
show a clear use concepts understand issues at
understanding stake
Meets Requirements Students is able to Students is able to Student is able to
demonstrate show understanding of solve some questions
understanding of key concepts
terms/concepts
Exceeds Student shows ability Student is even able to Student is able to
Requirements to use even more rare challenge applications solve some all
terms questions

Group evaluation
The teams will be created in a way that maximizes internal diversity. They will work
together towards presenting to the rest of the class on a topic related previously agreed
upon with the Professor. Since the PPT is considered as an exam, every student that is
absent for their PPT will automatically receive a 0 for this part of the evaluation.

Evaluation criteria group presentation

Criterion 1:Accuracy Criterion Criterion 3: Effort to
2:comprehensivenes explain somewhat
s complex decisions
Below Students are not able to Students are not able Students are not able to go
Requirements provide accurate to gather all relevant beyond descriptions
information information
Meets Students are able to Students are able to Students identified
Requirements provide accurate present all key controversial issues
information relevant information
Exceeds Students provide Students are then able Students did extra efforts to
Requirements accurate information, to summarise all ley explain certain aspects
possibly from different information
sources

ACADEMIC RESOURCES
All the academic papers are available online through the INSEEC library database (Business
Source Complete), which can be found here: https://inseec-infotheque.campusonline.me/en-
us/documentary-resources/Pages/databases.aspx

Books : Students will be asked first and foremost to read and review the powerpoint course
materials prepared by the professor and made available on the school’s intranet. At the end of
each class, the professor will clearly indicate the sections to be read for the following class. In
addition, students are invited to refer to the following recommended textbook of reference
(Brealey, Richard A.: Corporate finance /Brealey Richard A., Myers Stewart C., Allen
Franklin. Boston : McGraw-Hill Irwin, 2006) or any other introductory finance text.

PLANNING

Lectur Topic + activities

e
1-2 Title of session: Review and analysis of major financial statements for companies
 Balance sheet, Income statement and Cash flow statement : general considerations
and exercises on how some financial transactions affect these statements
 Analysis of revenues, profitability, and level of indebtedness
3-4 Title of session: Company valuation based on market valuation multiples
 Discussion on comparable companies
 The major market valuation multiples
 Application of comparable market multiples to derive a valuation
range
 Examples and exercises
5 Mid-term exam
6-7 Title of session: Cost of capital
 Cost of debt
 Cost of equity
 Respective weights in capital
structure
 Weighted average cost of capital
8-9 Title of session: Initial public offering (IPO)
 Reasons to become listed
 Reasons not to choose to be listed
 Details of the process of an IPO
 Assessment of success of an IPO

10 Final exam