20156 - INTERNATIONAL FINANCE
Course taught in English
Class 6: STEFANO CASELLI, Class 7: STEFANO CASELLI
It is recommended to have a basic knowledge of company valuation issues and of capital structure.
The course is focused on the topic of finance at an international level. The content is divided into two different parts: the first is dedicated to corporate finance issues and the second to investment banking issues. The aim is to give a broad picture about international finance management through both companies and financial institutions approaches. The main goal of the program is to offer both a clear framework and a set of operative tools to understand the relationship between firms and financial system. The first part covers advanced topics of Corporate Finance, i.e. capital budgeting, cost of capital, designing optimal capital structures, advanced models for risk valuation, value creating strategies. The second is focused on the analysis of investment banking activity through three main areas: regulation and supervision, market and competition, management and financial instruments.
After an introduction focused on how modern financial institutions set up their strategies in the investment banking competitive arena, the course analyzes the business segments and the products offered to customers and their financial decisions. The course is structured in four modules:
- Investment Banking:
- The business system of investment banking.
- Regulation and supervision in investment banking activity: a European and an American perspective through Basle II, III Capital Adequacy Framework.
- Corporate Finance and financial decisions within corporations:
- The fundamental of corporate finance through an international perspective.
- Capital structure issues: the concept of cost of debt and equity capital.
- Liabilities management: bonds, leasing, mortgages, syndicated loans, hybrid debt.
- Different models of company valuation (multiples, DCF, APV, real options): theory and advanced practice.
- Debt Capital Market deals: underwriting and selling in domestic and international markets; the structure of syndicated loans.
- Equity Capital Markets deals: private equity, IPO, private placement.
- Corporate finance and advisory services: advisory & arranging in M&A; advisory & arranging in corporate restructuring deals.
- Know in a very detailed way all the mechanisms behind the relevant deals of investment banking business, with a specifc focus on the international regulatory framework, company valuation settings and methodologies to calculate risk and performance regarding financial institutions' perspective.
- Apply acquired methodologies and tools to the management of major investment banking deals (i.e., private equity, debt issuing, IPO, LBO, M&A, restructuring) to calculate case by case the equity value of the company involved (i.e., based on cash flows and cost of capital) and bank's performance based on revenues, costs and cost of regulatory capital, accordingly with international banking regulation.
- Face-to-face lectures
- Guest speaker's talks (in class or in distance)
- Exercises (exercises, database, software etc.)
- Case studies /Incidents (traditional, online)
The learning experience of this course is mainly based on face-to-face lectures. However, each of the four modules set forth in Section 1 is accompanied by case discussions and presentations by external guest speakers.
- The use of cases and external speakers aims at better connecting the body of knowledge covered in the course with real life examples, typically focused on complex investment banking transactions. The interaction between the instructor and students during the case discussions and the presentations helps students understand how professionals in the field approach a transaction and organize it in a structured process going from the deal origination to the final deal execution. Moreeover, the usage of softwares help the students to understand the best practices of the financial market as well.
|Continuous assessment||Partial exams||General exam|
Students have the possibility to choose two options:
- Two partial exams. In this case, the final mark is determined as the average of the marks on the two partial exams (provided that both exams receive a mark of at least 18/30). The partial exams include 4 questions, both open questions and exercises. The timing for the exam is generally 75-90 minutes.
- A final exam on all the topics covered in the course after the course completion. The full exam includes 6 questions, both open questions and exercises. The timing of the exam is generally 110-120 minutes.
- The questions of the written exam require either to argument some specific issues discussed during the course or to apply the concepts to numerical examples and mini cases. The final objective of the exam is to verify the students’ capabilities and mastery to collect and to organize information and numerical data to solve some of the problems faced by corporate and institutional clients working with investment banks and financial conglomerates.
- Slides and ad hoc readings available in the Bboard Platform.
- Text of case studies available in the Bboard Platform via Bocconi Library’s Course Reserves.
- Softwares and exercizes available in the Bboard Platfor.