Study Programmes 2016-2017
FINA0050-1  
Corporate Finance - Lectures and Seminars
Duration :
30h Th
Number of credits :
Master in management, professional focus in law and management5
Master in management, professional focus in law5
Master in management (120 ECTS)5
Master in business engineering (120 ECTS)5
Master in management (60 ECTS)5
Lecturer :
Joachim Heukmes, Marie Lambert
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
Learning unit contents :
The course of "Corporate Finance" lays the theoretical and practical foundations for valuing firms and corporate investment projects as well as for dealing with short-term and long-term financing decisions.
 
The course is structured around four blocks of theoretical lectures and 8 practical seminars.
 
Lectures
 
Block 1: Introduction to Corporate Finance


  • Basics of discounting and valuation (time value of money, effective/nominal/proportional interest rates)
  • Review of financial market theory: CAPM, Yield curve, business vs. financial risk
  • Alternative investment rules: IRR, Payback, Accounting Rate of Return, Profitability ratio
 
Block 2: Financial analysis and capital structure


  • Purpose of financial analysis
  • Financial statements and applicable adjustments
  • Horizontal/vertical common-size statements
  • Financial ratios
 
Block 3: Capital Budgeting


  • Determination of the Free Cash Flows to the Firm and forecasts
  • Weighted average cost of capital
  • Effect of leverage
 
Block 4: Firm valuation


  • Market approach
  • Income approach
  • Cost approach
 
 
Seminars
 
Seminar 1 will review the main prerequisites for the course (financial mathematics and financial market theory)
 
Seminar 2 will provide students with the tools to understand the financial fundamentals of a company, its environment and related risks but also to conduct a first financial due diligence.
 
Seminar 3 will provide students with the tools to prepare a business plan.
 
Seminar 4 will provide students with knowledge on working capital management and practical tools.
 
Seminar 5 will provide students with tools to evaluate firm's cost of capital and to firm valuation using the Discounted Cash Flow approach and multiples analysis.
 
Seminar 6 will provide students with tools to evaluate available capital budgeting decisions.
 
Seminar 7 will evaluate the impact of capital budgeting decisions on firm's growth profile and capital structure.
 
Seminar 8 will wrap up the competences acquired during Seminars 1 to 7.
 
During the seminars, students will work in groups on case studies. Professors and teaching assistants will provide students with the necessary guidance at the different stages. Homework will be asked to students in order to prepare the session or finalize the work started during the seminar.
Learning outcomes of the learning unit :
Consistently with the Key Learning Outcomes (KLO), students will develop the following capacities:
 
(1) Students will be able to execute the financial management of a company.
 
(1.1) They will acquire the fundamental knowledge and understanding in financial management to perform a rigorous analysis of a management problem such as an investment project, a firm valuation or (short-term, long-term) financing decisions.
 
(1.2) Especially, they will (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 (v) manage the working capital needs of a firm (vi) evaluate the impact of the project financing on the capital structure of the firm.
 
(2) They will learn how to establish a strategy to answer concrete complex and transversal financial management problems by applying modelization tools and by collecting market data.
 
(3) They will strengthen their communication skills in business related problems and in English and develop a transversal view of a financial management problem to adapt their management practices in the specific context of a firm or project valuation and financing.
 
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, financial analysis and reporting (see infra) 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 October 4th (AM) and on Friday 7th (AM) October. Attendance to these sessions is recommended.
Planned learning activities and teaching methods :
The course will be structured around lectures on Tuesdays and seminars (exercise sessions in groups and case studies) on Fridays.
 
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 and 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. Students will receive guidance to work on the case studies and will have to work in groups through distance learning and submit their work on lol@ on due dates (by following the instructions received on lol@.)
 
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 October 4th. There are 4 lectures blocks: 4th October (AM and PM) and 11th October (AM and PM)
  • Exercises sessions are scheduled on Fridays (from October 7th onwards) - Groups will be formed on lol@ end of September. Please check lol@ 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 and graded into your participation grade (see infra) 
  • An additional Questations and Answers session on Friday 16th December might be organized to answer the last questions you might have regarding the exam before the winter holidays. 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
- Equity Valuation, CFA Institute
 
For the prerequisites, please see supra. Chapters covered in class will be announced in class.
 
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.
 
Recommended readings
 
 
Financial Statement Analysis: An introduction by Elaine Henry, CFA, and Thomas R. Robinson, CFA
 
Financial Reporting Mechanics - International Financial Statement Analysis, by Thomas Robinson, CFA, Jan Hendrik van Greuning, CFA, Elaine Henry, CFA and Michael A. Broihahn, CFA
 
Financial Reporting Standards by Elaine Henry, CFA , Jan Hendrik van Greuning, CFA, and Thomas R. Robinson, CFA
 
Understanding Income Statements by Elaine Henry, CFA and Thomas R. Robinson, CFA
 
Understanding Balance Sheets by Elaine Henry, CFA, and Thomas Robinson, CFA
 
Understanding Cash Flow Statements by Elaine Henry, CFA and Michael A. Broihahn, CFA
 
Financial Analysis Techniques by Elaine Henry, CFA, and Thomas R. Robinson, and Jan Hendrik van Greuning, CFA
 
Inventories by Michael Broihahn, CFA
 
Long-lived Assets by Elaine Henry, CFA and Elizabeth A. Gordon
 
 
These readings will enable students to deepen their understanding of the prerequisites for the course: Financial Reporting and Analysis. 
 
 
 
Course material
 
The course material (slides, case studies and exercises) will be available on the course web page on lol@: http://lola.hec.ulg.ac.be
Assessment methods and criteria :
Students' final grade for the course is composed of an evaluation of students' engagement during the course (20%) and of a final evaluation (80%).
 
 
The final written exam will assess students' understanding of the concepts as well as students' capacity to solve problems. This will make up 80% of their final grade.
 
Active class participation will make up 20% of the student's grade: students will be assessed on their attendance to Friday's sessions (10%) as well as on their class preparations (by group, 10%).
 
 
Relative weighting of individual assessment: 90%
 
 
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. There is no intermediary session.
In case students can not attend half of the Friday's sessions (upon approved justification received before October 7th, 2016), the final exam will count for 100% of their grade. In case of justified absence for less than half of the Friday's sessions, students must remit a certificate to the teaching assistants. Only absence justified through certificates (no emails) might  be considered as "Excused".
Work placement(s) :
None
Organizational remarks :
Students have the opportunity to ask questions on the material during the class and at the end of each session. A final Questions and Answers session will be organized on December 16th.
 
Students are invited to check the lol@ platform on a regular basis for any practical information regarding the course.
Contacts :
Professors
 
Marie Lambert - Professor at HEC - marie.lambert@ulg.ac.be
 
Joachim Heukmes - Partner - Deloitte and Affiliate Professor at HEC - jheukmes@deloitte.lu
 
 
Teaching assistants:
 
Joachim Davoli - joachim.davoli@ulg.ac.be 
 
Thomas Bonesire - thomas.bonesire@ulg.ac.be
 
Kathrin Schifflers - kschifflers@deloitte.lu
 
 
Student instructors :
 
 
Julien Daco - julien.daco@student.ulg.ac.be
 
Gilles Mordant - gilles.mordant@student.ulg.ac.be