This course presents the most common applications of microeconomic theory of finance, including the logics and operating tools involved in the financing of corporations for both the medium-long and short term. What makes this course a specific fit to an engineering degree, particularly for the last semester of study, is the industrial approach underlying the use of finance for the growing, mature corporations and, even, distressed ones, while this course has no specific focus on start-ups and venture capital. In this perspective, finance is considered a key instrument for the firm to reach its strategic objectives and illustrations will centre around reaching, through the correct financing, the industrial/operating goals functional to corporate and business strategy. The ultimate purpose of the course is to provide the student with the cultural and technical framework required to embrace the perspective of the General Manager or the CFO, in order to form a perspective and a background to the students that will undertake – over time – this careers, or just anyway interact with managers holding such positions and face finance decisions and constraints. The course will also be useful to those who wish to pursue a career in Private Capital or be, in any case, a finance professional in advisory, M&A or other capacity. The course is conceptually structured into four parts: 1. Application context of the course: finance to realise corporate strategy and strategic decisions; what are the typical forms of financing; how do financial institutions think and how the corporation should relate to them; 2. Techniques: interpreting the accounting instruments beyond the more typical Income Statement, namely acquiring depth insight of the Balance Sheet and the Cash Flow statement; knowing accounting ratios and see them like a practitioner; understand return on capital, valuation and impairment test; understand when and why corporations use equity or debt; prepare financial plans; 3. Private Capital as an alternative to traditional and more basic financing: Private Equity and Private Debt, differences with Venture Capital; Turnaround financing; the investment process in Private Capital; 4. Some real life applications and case studies.

This course aims at providing the following elements of knowledge and competence: 1. The ability to understand opportunities and constraints to financing a corporation, via equity or debt; 2. The ability to assess how financing institutions tend to reason on financing a corporation, in both the cases of commercial banking and Private Capital; 3. The knowledge of how to interpret an annual report at non basic level but with more advanced critical insight, including the likely interpretation of the relationship between the report numbers and the industrial underlying facts; 4. The knowledge of the key ratios used by credit and financial institutions, as well as those of return on capital, and the knowledge of valuation principles and applications; the understanding, based on the ratios and indicators studied, of which corporations create economic value and which not; 5. The knowledge of the main financing devices used to finance a corporation for its medium and short term needs; 6. The ability to prepare a financial plan and to read critically a plan prepared by others; 7. The basic/introductory knowledge of Private Capital in its various forms for the mature corporation (private equity and private debt); 8. The application of the previous notions to real life cases. At the end of the course the student should be able to understand the challenges and opportunities related to financing a corporation in order to realise its strategy. The student will be able to assess and to evaluate the main financing operations and to undertake an initial structuring of financing for her/his company (or a specific large project with material impact on the balance sheet).

Basic Corporate Finance and Capital Budgeting (e.g., Accounting and Corporate Finance)

The course is divided into four parts. The first part aims at introducing the financing needs of corporations, the most common approaches and the way financial institutions see the corporation when thinking about financing them • What is strategy and why we recall it in a finance course • Why firms need financing to realize their strategy, which are the typical sources of financing • Workshop: macro-finance flows in an illustrative economy (e.g., Italy) The second part aims at introducing techniques for achieving a deeper understanding of the financial accounting needed to understand the reporting done by corporations the way an evolute financial institution would see them, in particular all the components of the annual report and the implicit valuation of the underlying firm • Balance Sheet and Cash Flow: sometimes neglected in an Engineering school but key to understand the sustainability of Income Stratement (P&L) • The ratios conundrum • From Capital Budgeting to ROIC; value creation measures • Valuation and related issues (incl. impairment test) • Equity financing and debt: how much should a firm borrow? • Financial planning and cash flows The third part aims at present Private Capital as an alternative to traditional financing (stock market or commercial banking) • Private Equity, Private Debt and Venture Capital • Distressed financing (incl. bankruptcy procedures) and turnaround • The investment process (due diligence, deal execution and Exit) The fourth part presents some observations from real life and some real case studies • Workshop: how credit institutions work and how they think about granting credit • The importance of Governance • Partnering with entrepreneurs • A few Case Studies.

Le lezioni saranno tenute dal docente attraverso classiche lezioni frontali o con modalità seminariale (workshops), anche attraverso la collaborazione di alcuni esperti e professionisti del settore, che contribuiranno contenuti, esperienze e stimoli derivati dalla propria specifica esperienza dal mondo applicativo. The lectures will be held both in the traditional way and through lecture workshops, also through the contribution of expert professionals from the industry, who will contribute content, experience and stimuli from real life situations.

Key text and material: 1. Berk, J., e DeMarzo, P., Corporate Finance, V Global Edition, Pearson Education, 2019 (also previous editions are fine), many selected parts 2. Slides and notes distributed by the instructor Supplemental texts: 1. Brealey, R. A., Myers, R. A. e Allen F., Principles of Corporate Finance, McGraw-Hill, Thirteenth Edition, 2019 (also previous editions are fine), selected parts 2. Koller, T., Goedhart, M., Wessels, D., Valuation: Measuring and Managing the Value of Companies: Measuring and Managing the Value of Companies, Seventh Edition, McKinsey & Company, 2020 (also previous editions are fine), selected parts 3. Corporate Turnaround, Gualtiero Brugger and Paola Galbiati Editors, McGraw-Hill, 2020 4. Tron, A., Corporate Financial Distress, Restructuring and Turnaround, Emerald Publishing, 2021 Helpful but in Italian: 5. Gervasoni, A., Sattin, F.L., Private Equity e Venture Capital, Sesta Edizione, Guerini Next,

Modalità di esame: Prova scritta (in aula);

Exam: Written test;

... There will be a paper-based written exam lasting 2-2.5 hours. The final exam aims to (1) evaluate the student’s knowledge and comprehension of the theories described during the lectures and described in the textbooks; (2) verify the student’s ability to solve numerical problems on various topics illustrated during the course. Therefore, the exam questions will be open ones and will be followed by numerical exercises. The exam will be typically composed of 3-4 questions on the theory and applications presented, and 2-3 exercises with numerical content. The course has been introduced recently and therefore only a limited number of past exam papers have been released (some can be drawn from the 2021-2022 academic year of the previous course “Mercati, rischi e strumenti finanziari”, in Italian). Some exam question samples will be offered during tutorials and uploaded onto the teaching portal. During the written test students cannot use any reference material, apart from non-programmable scientific calculators, and they cannot access the internet. In the second part of the course group work activities will be scheduled. During this group work (optional for the exam), the students will be required to analyse an article from a business newspaper and perform related analyses of the company in question. The maximum grade points that students will be able to earn through group work is 2.5/30; these “bonus points” will add to the results of the written (and oral, if applicable) test. The oral test will only be offered to students who have been awarded points between 15 and 19 and between 27 and 30 in the written test. Students with points between 15 and 17 must take the oral test to obtain a minimum of 18/30 to pass the exam. The oral test may increase or decrease the final grade on the written exam, by up to 3/30.

Gli studenti e le studentesse con disabilità o con Disturbi Specifici di Apprendimento (DSA), oltre alla segnalazione tramite procedura informatizzata, sono invitati a comunicare anche direttamente al/la docente titolare dell'insegnamento, con un preavviso non inferiore ad una settimana dall'avvio della sessione d'esame, gli strumenti compensativi concordati con l'Unità Special Needs, al fine di permettere al/la docente la declinazione più idonea in riferimento alla specifica tipologia di esame.