(MISC194) -  GIANLUCA MATTAROCCI

Περιγραφή Μαθήματος

ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS

 

MSc in International Shipping, Finance and Management

 

CORPORATE FINANCE

 

Lecturer:      Professor Gianluca Mattarocci

Email:            mattarocci@aueb.gr

 

 

EDUCATIONAL AIM

 

The course objective is to develop special issues in the field of corporate financing, covering the recent developments in the field of corporate finance. During the course certain subjects will be analyzed such as: Securities issuing, Convertible Bonds, Bank loans, Operating and Financing Lease, Venture Capital and Private Equity, Mergers and Acquisitions and Securitization.

 

 

LEARNING OUTCOMES

 

Students having successfully attended the course should be able to:

 

-        Discuss the patterns of corporate financing.

-        Evaluate the timing for issuing new securities on the basis of market peers and best practices

-        Define the optimal strategy for issuing new securities on the basis of market conditions

-        Explain the design of convertible bonds

-        Estimate the value of convertible bonds

-        Review the most prominent theories of convertible debt financing

-        Identify the main characteristics of a loan contract

-        Measure the overall cost of the loan financing solution

-        Evaluate the impact of contract features on the loan sustainability for the firm

-        Define, compare, and contrast the types of leases

-        Identify the reasons for leasing and the reasons for not leasing

-        Calculate the net advantage of leasing and related issues

-        Discuss the important differences of the leasing around the world

-        Define and explain the activities of venture capitalists

-        Discuss differences between business angels and venture capitalists

-        Identify and explain the organization structure of venture capital

-        Describe the patterns of venture capital investment

-        Calculate the cost of capital for venture capital

-        Categorize merger and acquisitions (M&A) activities based on forms of integration and types of mergers

-        Explain the common motivations behind M&A activity

-        Calculate the estimated post merger value of an acquirer, and calculate the gains accrued to the target shareholders versus the acquirer shareholders

-        Distinguish and describe pre-offer and post-offer takeover defence mechanisms

-        Explain the mechanisms used to convert on-balance-sheet assets to a securitized asset

-        Describe the key parties involved in a securitization and their roles

-        Illustrate the major forms of asset securitization

-        Understand the prepayment risk on pass-through securities

 

THEMATIC AREAS

 

Week 1: An Overview of Corporate Financing

Reading:

Brealey, Myers & Allen, Ch. 14

 

Week 2: Venture Capital

Reading:

Brealey, Myers & Allen, Ch. 15.1 and Ch. 32.3

Gompers and Lerner (2001) JEP

 

Week 3: Securities issuing

Reading:

Brealey, Myers & Allen, Ch. 15 (excluding 15.1)

 

Week 4: Convertible Bonds

Reading:

Brealey, Myers & Allen, Ch. 24.1-24.2

Ross, Westerfield, Jaffe & Jordan, Ch. 24

Lewis, Rogalski and Seward (1998) JACF

 

Week 5: Bank Loans

Reading:

Ross, Westerfield, Jaffe & Jordan, Ch. 20.7, Ch. 26 and Ch. 28

 

Week 6: Leasing

Reading:

Brealey, Myers & Allen, Ch. 25

Ross, Westerfield, Jaffe & Jordan, Ch. 21

 

Week 7: Mergers & Acquisitions

Reading: Brealey, Myers & Allen, Ch. 31

Ross, Westerfield, Jaffe & Jordan, Ch. 29

Andrade, Mitchell and Stafford (2001) JEP

 

Week 8: Securitization

Reading:

Saunders and Cornett, Ch. 26

 

 

 

 

 

BRIEF DESCRIPTION OF THEMATIC AREAS

 

-        An Overview of Corporate Financing

The first session will present an overview of the main issues of Corporate Financing and the implications for the investment strategy of the firm. A preliminary analysis of the Asset Liability Management concepts will be discussed.

 

-        Venture Capital

 

The second session will evaluate the role of special type of intermediaries (Venture Capital and Private Equity) in investing in high potential firms buying shares issued by the firm. The analysis will consider both the venture capital process and the implications for the management of the firm venture backed.

 

-        Securities issuing

 

The third session will analyze the process of issuing bonds or ordinary shares and the cost of capital raising for the firm. A detailed analysis of the timing and trancing issues will be presented.

 

-        Convertible Bonds

 

The fourth session consider the opportunity to offer on the market bond that can be converted in shares on the basis of the investor choice. The analysis will also evaluate the pricing of the convertible bonds and define the price of this special type bond on the basis of the share volatility and contract features.

 

-        Bank Loans

 

The fifth session will consider banking financing solutions looking to both short and medium term debt solutions normally used in the shipping industry. The analysis of the short term financing will consider the working capital needs and the financing solutions offered by the banking sector. The focus on the long term financing solution will be on the types of loans used in shipping finance (e.g plain vanilla loans, moratorium loans, bullet repayment loans, balloon repayment loans, back/front ended loans, and revolving credit facility loans).

 

-        Leasing

 

The sixth session will evaluate the differences between the standard loan financing solutions and the leasing contracts and the implications for the firm. The analysis will consider not only the differences in the contract features but also the cost of the service and the tax advantages related to the financial instrument.

 

-        Mergers & Acquisitions

 

The seventh session will be focused on the market of ownership and will evaluate if an higher level of competition for the control of the firm normally reduces the risk of not performing management. The analysis will also consider the implication of the M&A for the pricing of acquirer and target before and after the transaction.

 

-        Securitization

 

Securitization is a complex process that involve differ type of counterparties and the success of the transaction depends on the capability of identifying the best involved counterparties. The analysis will consider also the features of the investments that can be financed using a securitization process.

 

READING ΜΑTERIAL

 

Textbooks and Materials

 

Required textbooks:

-        Brealey, R., S. Myers, and F. Allen, 2014, Principles of Corporate Finance, Global Edition, 11th edition, McGraw-Hill/Irwin.

-        Ross, S.A., R.W. Westerfield, J.F. Jaffe, and B.D. Jordan, 2008, Modern Financial Management, 8th edition, McGraw-Hill/Irwin.

-        Saunders, A., and M. Cornett, 2011, Financial Institutions Management: A Risk Management Approach, 7th edition, McGraw-Hill/Irwin.

 

Required articles:

-        Gompers, P., and J. Lerner, 2001, The venture capital revolution, Journal of Economic Perspectives, 15, 145-168.

-        Andrade, G., M. Mitchell, and E. Stafford, 2001, New evidence and perspectives on mergers, Journal of Economic Perspectives, 15, 103-120.

-        Lewis, C.M., R.J. Rogalski, and J.K. Seward, 1998, Understanding the design of convertible debt, Journal of Applied Corporate Finance 11, Spring, 45-53.

 

Materials:

Finally, there will be lecture notes and handouts. These materials will be distributed in class, and they will also be available on the course webpage.

 

Assessment:

 

During the course students will receive an home assignment that has to be completed before the end of the course. A 3-hours written exam with open questions and problems will be scheduled at the end of the course. The final degree will be the 70% of the written test results and the 30% of the home assignment results.  

 

In addition to the above, it is recommended to read:

• The finance related journals, such as: Journal of Finance, Review of Financial Studies, Journal of Financial and Quantitative Analysis, Journal of Financial Economics, Review of Finance, Financial Analysts Journal, Journal of Corporate Finance, Journal of Applied Corporate Finance, Financial Management, etc.
• Financial periodicals/papers, which include: Financial Times, Economist, Wall Street Journal, Nautemporiki.
• Web pages with international market and corporate news including: www.investing.com, www.reuters.com, www.bloomberg.com  

 

Useful Databases for data collection:

Reuters, Bloomberg, Datastream, Web pages of Companies and Stock Exchanges.

Ημερομηνία δημιουργίας

Δευτέρα, 26 Οκτωβρίου 2015