Corporate Financial Strategy


Objective

The course aims to enable students to master the basic concepts in corporate financial decision-making and its most common applications. The first part (corporate finance 1) covers the fundamental ideas such as financial analysis, investment decision criteria, the various instruments used to finance investments and methods for valuing companies. The second part of the course (corporate finance 2) examines more advanced or practical aspects, such as governance, credit rating, LBOs, mergers and acquisitions, as well as the specific financial questions that face companies in the finance sector (banks and insurance companies).

 

Planning

  1. Debt: practical aspects –Company bankruptcy; measuring default probability; default probability and loss given default
  2. Credit rating –Rating agencies; scoring; comments on the Basel II banking regulations
  3. What are financial synergies? –Reducing risk by increasing the size of the company compared with its segmentation; taking account of the limited liability effect; a few empirical rules
  4. Structured financing, securitisation and corporate insurance –Types of structured financing (LBO, project financing etc.); securitisation and corporate risk management; does the company have to be insured?
  5. Good corporate governance –Corporate governance bodies; conflicts of interest and agency problems; good incentives; control: the law, internal protection, threats; moral standards
  6. Good corporate governance –Socially responsible investment; SRI and the firm’s objectives; transparency and shareholder value; other forms of control organisation: mutual society, association, public administration etc.
  7. The financial sector: banks –The balance sheet of a bank; the function of banks; direct finance – indirect finance; financial markets, credit and risk markets; bank valuation; prudent regulation of banks
  8. The financial sector: insurance companies –The balance sheet of an insurance company; valuation of an insurance company; regulation in the insurance sector
  9. Mergers and acquisitions –Operational synergies; financial synergies; how a M&A operation works; factors that explain M&A cycles; different acquisition modes; financial impact.

 

Références

VERNIMMEN P., QUIRY P., LE FUR Y. et CEDAHA F. (2002) : Finance d’entreprise,  Dalloz.