Syllabus GF121A - GF121A : Adv. corporate fin. II - selected chapt.

Reprage du cours / Course specifications

COURSE TITLE
TEACHING LANGUAGE

COURSE SUPERVISOR

OFFICE HOURS
CLASSROOM(S)
COURSE HOURS
ADMINISTRATIVE ASSISTANT
OTHER SPEAKERS

PRE-REQUISITES

Advanced Corporate Finance II

English
Fabio BERTONI
Bureau A
04 78 33 70 03
bertoni@em-lyon.com
Monday and Tuesday afternoon
See icampus
30 hours see icampus
Graldine Heurtel
heurtel@em-lyon.com
none
Basic knowledge of corporate finance is
required (e.g. material covered in the
course: Corporate Finance, previously
Finance for Managers)

Objectifs pdagogiques / Learning goals

The course aims at giving a systematic view of selected topics in corporate finance including:
Capital structure and taxation
Capital budgeting decisions with leverage and real options
Long-term financing:
equity issues
debt issues
the specificities of small and medium enterprises
Concept cls / Key concepts
Concepts and theories to which students were exposed during the course:
The trade-off theory of capital structure
Capital budgeting with leverage
Real options
IPOs, SEOs, PIPEs and reverse mergers
Bond covenants and options embedded in bonds
Alternative sources of finance: venture capital, business angels, bootstrapping,
crowdfunding

Connaissances / Knowledge
The knowledge acquired by the students at the end of the course:
Know the trade-off theory of capital structure
Know how to include capital structure in capital budgeting decisions
Know how real options affect capital budgeting decisions
Identify characteristics of equity financing and equity issues including IPOs, SEOs,
PIPEs, and reverse mergers
List the covenants and options that characterize bonds and their impact on bond value
Know the specificities of SMEs financing
Comptences / Skills
The skills acquired by the students at the end of the course:
Skill 1: to be able to evaluate the impact of leverage on the cost of capital
Skill 2: to be able to include capital structure in capital budgeting decisions
Skill 3: to be able to include real options in capital budgeting decisions
Skill 4: to be able to distinguish between different types of equity issues, understand
their process and evaluate their costs and benefits
Skill 5: to be able to understand covenants and options embedded in bonds and
assess their impact on bond value
Skill 6: to be able to evaluate the different financing options of SMEs, including
alternative financing channels such as venture capital, business angels, bootstrapping
and crowdfunding
Livrables / Deliverable
The deliverables and productions that students will be able to present after having
taken the course:
Complex capital budgeting cases
Case studies on long-term financing
Postures / Attitude "Entrepreneur pour le monde"
The different entrepreneurs for the world postures/principles that students will have
developed through the involvement in the course:
Critical posture: the course will develop the ability of the participants to critically assess the pros and cons of different long-term
financing options, and to understand the hidden assumption behind the most used capital budgeting evaluation methods

Responsible behavior: the course is partly based on workgroup by the students, which
will foster (and reward) their responsible behavior
Creative and original perspective: in the final lecture the students will be asked to do a
presentation on a specific topic and the originality and creativity of the perspective they
have on the topic will be taken into account in the evaluation
Risk tolerance: within the course we will spend substantial time in understanding how
real options may enter into capital budgeting decisions, and one of the key concepts
that will be explained is that the higher is risk, the higher is the value of the options
embedded in a project
Expriences d'apprentissage / Learning experiences

The learning experiences that students will live:

Team-work
Information search
Use of financial tools
In-depth studies
Modalits d'valuation / Evaluation of the learning outcomes
Form of the individual and group assessment + percentage
Individual assessment: 20% weekly quiz, 40% final exam
Group assessment: 20% case study (capital budgeting application), 20% presentation
(on real long-term financing case)
Evaluation des acquis / Outcomes assessment
Assessment of the acquired skills and knowledge:
Title
Quiz
Skill 1: Being able to evaluate the impact
of leverage on the cost of capital
Skill 2: Being able to include capital
structure in capital budgeting decisions
Skill 3: Being able to include real options
in capital budgeting decisions
Skill 4: Being able to distinguish
between different types of equity issues,
understand their process and evaluate
their costs and benefits
Skill 5: Being able to understand
covenants and options embedded in
bonds and assess their impact on bond
value
Skill 6: Being able to evaluate the
different financing options of SMEs,
including alternative financing channels
such as venture capital, business angels,
bootstrapping and crowdfunding

Assessment method
Case study Presentation Final exam

X
X

X
X

Modalits pdagogiques / Teaching methods

The following learning activities are recommended to achieve the learning outcomes:
Attend classes
Read relevant book chapters
Solve end-of-chapter problems
Participate in classroom discussions
Contribute to teamwork
Organization, methods and pedagogical means:
Slides

Classroom discussion
Teamworking
Students presentations
Dtail des sances / Session details
Class 1: Presentation of the course and reminder of the basic concepts of corporate finance
Class 2: Long-term financing: equity issues (private placement and SEOs)
Class 3: Long-term financing: equity issues (IPOs, PIPEs and reverse mergers)
Class 4: Long-term financing: bond issues
Class 5: Long-term financing for SMEs
Class 6: Capital structure and the cost of capital
Class 7: Capital structure and capital budgeting decisions
Class 8: Real options and capital budgeting decisions
Class 9: Capital structure, real options and capital budgeting decisions: application
Class 10: Presentations of real cases of long-term financing
Bibliographie / Bibliography
Book: Berk and DeMarzo (2013): Corporate Finance (3rd edition), Global Edition
Relevant slides will be available to download on iCampus before each class
Selected newspaper articles and academic papers will be available to download on
iCampus