Management and corporate law

The course addresses the main issues and challenges related to corporate financial management, with specific emphasis on financial planning, investment decisions, and financing choices. The course is organised into three modules. Module 1 defines the connections between firm value, business risk, and financial management. After clarifying the relationships among value, time, and risk, the module examines the financial view of the firm and, consequently, the role of Finance in value creation. It also introduces the key concepts of financial management: financial dynamics, funding requirements, financial equilibrium, and cost of capital. Module 2 focuses on the firm’s financial equilibrium, which represents a necessary (though not sufficient) condition for value creation. Financial equilibrium is examined by combining a static analytical approach with a dynamic one. This allows students to understand how “financial positions” are determined and interpreted, as well as how the cash flow statement is constructed and analysed. Module 3 concentrates on the analysis of corporate value, highlighting the relevance of corporate planning and financial policies, as well as the types of risk that matter from a Corporate Finance perspective. The module also recalls the role and functioning of capital markets, introducing the main theories aimed at explaining their dynamics and equilibrium conditions. The module concludes with the presentation of the logic and techniques of capital budgeting, which support management in making investment decisions consistent with the objective of value creation. The course programme is then structured into three parts, developed consistently with the overall duration of the course. Part I — Foundations of Financial Theory This part introduces the foundations of Finance Theory. Decisions concerning the allocation of available financial resources (i.e., savings generated by consumers or funds raised by firms) require analyses and evaluations that account for the uncertainty characterising the economic environment. Economic allocation decisions are inherently intertemporal—since their outcomes are realised over time—and therefore involve risk. A theoretical framework is introduced to: i) connect the roles and expectations of consumers (through their consumption–saving choices) and firms (as agents capable of increasing available wealth); ii) provide the rational basis upon which investors select among alternative capital allocation opportunities. The role and usefulness of regulated financial markets are then examined: ideally perfect, potentially efficient, empirically observable, and legally supervised. Within this theoretical setting, Corporate Finance is introduced and the key concepts of the discipline are presented, grounded in the financial conception of the firm. Topics include: - Fundamentals of financial theory - Uncertainty, risk, and value - Corporate Finance - The financial view of the firm Part II — Financial Analysis Corporate Finance, as a managerial discipline, is concerned with safeguarding the firm’s financial equilibrium, which must continuously support operating management. In this perspective, the analysis of a firm’s financial structure and cash flows is essential. Accordingly, this part examines the main approaches and techniques of financial statement reclassification, enabling the computation of indicators of financial position useful to assess static financial equilibrium. The cash flow statement is then analysed as a key tool for monitoring dynamic equilibrium through the study of financial flows and returns, both historical and forward-looking. Topics include: - Financial equilibrium: financial statement reclassifications and ratios - Financial equilibrium: financial “centres of financial gravity” (financial barycentres) - Financial dynamics: the cash flow statement - Analysis of financial dynamics Part III — Value Analysis Corporate value creation requires careful consideration of the financial implications of corporate strategies and policies (commercial, organisational, and operational). Capital budgeting and financial planning support the selection of corporate investments, while the analysis and measurement of business risk contribute to steering overall corporate action toward maintaining equilibrium and achieving sound financial performance. This part explores investment and financing policies within the framework of the Value Rule, providing the analytical basis for efficient and coherent decisions concerning capital budgeting, capital structure, and dividend policy, consistent with maximising shareholder value. Topics include: - Expectations and financial planning - Financing policies - Risk pricing models - Corporate value and capital budgeting.

A sound knowledge of the following disciplines is recommended for a full understanding of the models and techniques presented during the course: - Business Administration - Financial Mathematics - Statistics

G. Palomba and A. Gennaro (2022), Finanza Aziendale. Analisi, Valutazioni e Decisioni Finanziarie, 2nd ed., McGraw-Hill, Milan (Chapters 1, 3, 4, 5, 6, 7, 8, 10, 13, 14, 16).

The course includes lectures in accordance with the in-person teaching methodology of the degree program. Attendance is not mandatory but is strongly recommended.

To successfully complete the course, students are required to: - Regularly attend classes and actively participate in classroom discussions and activities. - Independently repeat the exercises completed periodically throughout the course to apply theories, models, and techniques. - Participate in self-assessment sessions conducted throughout the course to monitor their progress. - Pass the final exam, which includes a written test (3 exercises) and an oral test (3 open-ended questions).

Lectures combine theoretical explanations with practical applications aimed at developing students’ operational skills. Following the instructions provided during class, students are expected to complete their preparation by studying and deepening the textbook sections corresponding to each topic.