FINANCIAL MARKETS AND INSTITUTIONS – FINANCE FOR DEVELOPMENT (crediti 6) [primo semestre] Prof. Francesca Arnaboldi Dipartimento di Scienze giuridiche “Cesare Beccaria” Course contents and objectives

This course is designed to familiarize law students with the principles of investment banking and corporate finance. In this field, the distinction between lawyers and investment bankers has become blurred. Whether negotiating a debt restructuring, merger agreement, acquisition or divestiture, rendering a fairness opinion, preparing for an appraisal hearing, litigating derivative suits, issuing new securities, taking a firm private via a leveraged buy-out or public via an initial public offering, corporate lawyers and investment bankers work side-by-side, and lawyers without an appreciation of the basics of corporate finance are at a distinct disadvantage. Even students who do not plan to venture into the corporate world will benefit from this course. The financial principles covered are essential for lawyers intending to do estate or tax planning, litigate divorces, or write the compensation agreements for partnerships or closed corporations.

On successful completion of this course, students should be able to understand the core corporate finance decisions, which are essential for all businesses: 1) understand the tools that are used to value investment projects and companies (valuation); 2) understand the basic issues involved in how firms should raise funds for investments (financing). Furthermore, they should be able to understand how investment and financing decisions are related, evaluating the process which firms go through in choosing between strategic options, such as undertaking a merger or engaging in restructuring, and integrating their knowledge of the legal aspects with a comprehensive financial approach. A final focus on financial tools for development is provided.

The course stresses problem solving, encouraging guided class discussion and through case studies, and problem sets.

Course outline a) Valuation. Methods of Valuation: Net Present Value; Real Options; Cash Flow

Analysis. Company and Asset Valuation. b) Financing. Debt: Senior and Mezzanine Debt; Private and Public Placements;

Eurobond Market; Equity: Common Stocks; Preferred Shares; Option Rights; Initial Public Offerings.

c) Valuation & Financing. Capital Structure and Investment Decisions; Mergers & Acquisitions; Leveraged Buy-Outs; Corporate Restructuring; Dividend Policy.

Reading list

Brealey, R., S. Myers and F. Allen, 2013, Principles of Corporate Finance - Global Edition, ISBN: 9780078034763, McGraw-Hill, (11th edition).

Research papers and financial press (Financial Times, Wall Street Journal, The Economist) available on Ariel. Access procedure is provided in class.