Study Programmes 2015-2016
WARNING : 2014-2015 version of the course specifications
Corporate Finance - Lectures and Seminars
Duration :
30h Th
Number of credits :
Master degree in Management, professional focus in Law and Management5
Master degree in Management, professional focus in Law5
Master degree in Management5
Master degree in Business Engineering5
Master degree in Management5
Lecturer :
Marie Lambert, Alain Schockert
Coordinator :
Marie Lambert
Language(s) of instruction :
English language
Organisation and examination :
Teaching in the first semester, review in January
Units courses prerequisite and corequisite :
Prerequisite or corequisite units are presented within each program
Course contents :
The Valuation and Capital Budgeting course is organized into two distinct but related parts: Capital Budgeting and Firm Valuation.

Part one 'Capital Budgeting' lays the theoretical foundations for all the topics to follow. Students will acquire theoretical knowledge and practical skills for valuing corporate investment projects.

Module 1 provides an introduction to capital budgeting and reviews the prerequisites (financial mathematics and financial market theory) of the course. Module 2 introduces the Discounted Cash Flow method and provides guidelines for computing the Net Present Value of an investment project. Module 3 discusses alternative investment rules (Internal Rate of Returns, the Payback and Accounting Rate of Return criterions) and demonstrates the superiority of the NPV criterion. Module 4 covers the following techniques to capture the impact of financing on project valuation: the Adjusted Present Value and the Weighted Average Cost of Capital.
Part two 'Valuation' presents guidelines for firm valuation. Students will study in which circumstances a company needs to be valued and how to proceed. Special attention will be given to corporate events like Initial Public Offering and Merger and Acquisition. 
Throughout the course, illustrative cases and practical exercises will be discussed in class.


Part I: Capital Budgeting
Basics of discounting and valuation 
Valuing real assets

  • Tracking portfolio approach: Net Present Value criterion and Discounted Cash Flow method (risk-adjusted discount rate method)
  • Alternative investment rules
Valuing real assets with corporate taxes

  • Adjusted Present Value method
  • Weighted Average Cost of Capital
Case study analysis

Part II: Firm Valuation

  • Economic cycle, interest rates and financial assets
  • Valuation methods
  • Initial Public Offering (IPO)
  • Mergers and acquisitions
Learning outcomes of the course :
At the end of the course, students will

  • (1) acquire the fundamental knowledge and understanding in financial management to perform a rigorous analysis of a management problem such as an investment project or a firm valuation.

    Students will be able to (i) compute and forecast cash flows used for project or firm valuation (ii) estimate the prevalent cost of capital to be used to discount cash flows (iii) compute the Present Value of an investment project or a firm (iv) value business acquisition opportunities.

  • (2) be able to solve autonomously concrete complex and transversal financial management problems such as the acquisition of a firm or the investment in a real project by applying modelization tools and by collecting market data.
    Students will apply the tools they have acquired throughout the different modules to value a real investment project. 

  • (3) strengthen their business English and develop a transversal view of a financial management problem in the specific context of a firm or project valuation and financing.
This course contributes to the following Intended Learning Outcomes :
ILO-1 : To strengthen knowledge and understanding of management disciplines and its legal, policy and social context
ILO-2 : Gaining the knowledge and understanding of one of the proposed fields of concentration or to gain deep knowledge in the field of the management being already specialized thru a first University Master Degree . 
ILO-4 : To acquire the capacity to research autonomously and methodically the information needed to solve a complex, transversal management problem

ILO-6: Integrate autonomously researched information, tools, knowledge and context to build and propose, either individually or as part of a team, original, creative and viable solutions to concrete complex management problems whether real or simulated.
Prerequisite knowledge and skills :
The course will extend students' knowledge acquired during an initial bachelor's degree in management. The course therefore requires basic knowledge in financial mathematics and financial markets. As a prerequisite, students are invited to read Chapters 2,3,4,5 and 23 of Hillier, Grinblatt and Titman, Financial Markets and Corporate Strategy (second European edition).
Review of the prerequisites in financial market theory will be organized on Tuesday 23rd September (PM) and on 26th September and 3rd October. Attendance to these sessions is recommended.
Planned learning activities and teaching methods :
The course will be structured around lectures, exercise sessions in groups and case studies.

Lectures will transfer to students the theoretical knowledge and the practical tools for solving complex investment and firm valuation problems. Students are expected to participate to class and to read the related chapters in the textbook.

Exercise sessions in groups will allow students to apply the tools learnt during the course on a selection of financial management problems. Students are expected to prepare the exercise sessions and to submit their preparatory work on lol@ prior to the session and by following the instructions received on lol@.

Case studies will enable students to test their capacity to research autonomously and methodically the information needed to solve a transversal management problem and to test their capacity to use modelization tools to propose rigorous solutions to complex financial management problems.
Mode of delivery (face-to-face ; distance-learning) :
The course is composed of face-to-face lectures and exercise sessions. Exercise sessions and case study analyses will be prepared through distance learning.

  • Lectures start on September 23rd 2014 (one session in the morning and one session in the afternoon).
  • Exercises sessions are scheduled on Fridays (from October 10th onwards) - Groups will be formed automatically on lol@ end of September. Please check lol@ by October 5th to know your group number and schedule. In exceptional cases, changes from groups will be allowed but exclusively in the form of a swap between two students. Attendance to the (right) exercise session is mandatory and will be controlled. 
  • One exercises session on the prerequisites will be organized on September 26th and October 3rd. You will be asked to enroll on lol@ to this session.
Recommended or required readings :
Mandatory readings

- Hillier, Grinblatt and Titman, Financial Markets and Corporate Strategy, McGraw-Hill, Second European Edition

- Valuation, A. Schockert - Managing Director at Banque Degroof, 2014-2015, HEC-ULg

These readings will enable students to deepen their understanding of the key concepts seen throughout the course. Students' understanding will be tested at the written exam.

The course material (slides, case studies and exercises) will be available on the course web page on lol@.
Assessment methods and criteria :
Students' final grade for the course is composed of an evaluation of students' engagement during the course (10%) and of a final evaluation (90%).

The final written exam will assess students' understanding of the valuation concepts as well as students' capacity to solve valuation problems. This will make up 90% of their final grade.

Active class participation will make up 10% of the student's grade: students will be assessed on their attendance to the exercise sessions as well as on their class preparations. Exercises and case studies should be prepared and submitted on lol@ by the day before the session.

Relative weighting of individual assessment : 100%

Students who fail the January exam or do not present themselves at the exam will have to retake the exam in the second session organized in August/September. The exam is made of two parts 'Capital Budgeting - M. Lambert' and 'Valuation - A. Schockert'. No partial waiver will be granted: in case of failure to the exam, students have to retake both parts.
Work placement(s) :
Organizational remarks :
Students have the opportunity to ask questions on the material during the class and at the end of each session. Questions and Answers sessions with the tutors will be organized at specific times: you will be informed on lol@. A final Questions and Answers session will be organized in December.

Students are invited to check the lol@ platform on a regular basis for any practical information regarding the course.
Contacts :

Marie Lambert - HEC-ULg -

Alain Schockert - Managing Director Banque Degroof -

Teaching assistant: Joachim Davoli -

Student instructors :

Antonin Franck -

Cong Tin Thai -