Advanced Finance

The course focuses on seven (7) key subjects and they will be linked to real-life examples and to the notion of Impact with respect to the SDGs:

1. Financial decision-making for corporates and investors
2. Financial instruments and portfolio management
3. Asset pricing and real options
4. Firm valuation and the capital structure.
5. Fixed income analysis
6. Complex financing instruments
7. The financial life of the firm… IPOs, M&As,…

Each subject comprises pre-readings, mini-cases, slides and excel implementations.

A major global valuation case is foreseen each year, based on a real-life case supported by a partnering institution and/or mentor, as much as possible “alive” during the time of the course.

The learning outcome of this course is to provide you with an advanced approach on the assessment of investment and financing decisions to be taken by corporations, bearing in mind their intimate relationship with financial markets and the links with the assessment of their exposures.
This course is intended to students wishing to work in the financial institutions or aiming at jobs with financial responsibilities within large corporations. The term “advanced” is not necessarily linked to the complexity of the material but to the competency required to make links between many financial subjects, and to the financial critical eye we expect from the students in face of the challenges born today around the SDGs, and thus the willingness to evaluate decisions, projects, firms, and instruments in the light of the (real) intention to bring a measurable social and environmental positive impact alongside a financial return. 
Risk management, whilst an important part of the Treasury operations of multinationals, will be approached more deeply within the elective course “Derivatives, Financial Risk Management & Governance” (GEST-S569), taught in the second semester. 
The amount of work for this course is quite significant, if the student wishes to maximise his/her experience and acquired competences. A professional stance and the capacity to manage a substantial amount of information (readings and data for the case) are an integral part of the course.

Connaissances et compétences pré-requises ou co-requises

The previous course of Financial Theory (GEST-S301) or equivalently, the following topics that I consider you must be familiar with, i.e.:

1. Financial Statements Analysis (FSA)
2. Mathematics of present value & bond valuation,
3. Basic stock valuation (multiples, DDM, basic DCF).
4. Capital budgeting (Net Present Value and Internal Rate of Return) &
   the Free Cash Flow Model (FCFM)
5. Portfolio theory & the Capital Asset Pricing Model (CAPM)

These notions are essential for a good comprehension of the course. Without them, we cannot guarantee a correct pedagogical experience. Please come to us if you are registered to this course and think you might be missing some of these notions, to get complementary material.

Last, students must be familiar with the use of Excel.

The learning methods comprise:

1. Key lectures, with pre-readings, mini-case studies, debates and quizzes/Q&As. Excel files are also developed from scratch during the course to illustrate the notions.
   In case of sanitary crisis, these lectures will be taught online.
2. Tutorials.
   In case of sanitary crisis, some of these sessions will be organized as coaching sessions in smaller groups in presential mode, if deemed possible. Otherwise everything will be online.
3. Group work. A valuation assessment must be written on a major real-life case organized during the course. Groups are made of 4-5 members.
   A report and an excel spreadsheet will have to be submitted at the end of the course. There is no second session made possible for this case (see grading rules here below).

Références, bibliographie et lectures recommandées

One of the following references can be used together with the slides of the course, although you should be self-sufficient with the material distributed through the slides and articles:
•    Berk & DeMarzo (2023), Corporate Finance, Pearson Education, 6th edition, ISBN: 9781292446318 (BdM).
•    Hillier, Ross, Westerfield, Jaffe and Jordan, Corporate Finance, McGraw Hill, 13th edition, ISBN-13: 978-1-265-53319-9 (RWJ).

If you already own an old reference of the previous or one of the following groups of authors, keep it!
    Brealey and Myers (BM)
    Ross, Westerfield and Jaffe (RWJ).

The reference of one of the corporate valuation academic references from NYU:
•    Damodaran, Aswath. Investment valuation: Tools and techniques for determining the value of any asset. Vol. 666. John Wiley & Sons, 2012 (AW).

More theoretical but deep and sound:
•    Copeland, Weston & Shastri (2014), Financial Theory and Corporate Policy, Pearson Education, 4th edition, ISBN: 978-0-292-02158-4 (CWS).

For those who would want a concise complement and exercises in French (facultative):
•    Farber, M. Laurent, K. Oosterlinck, H. Pirotte, Finance, 3rd edition, Collection Synthex, Pearson Education, ISBN13: 978-2-7440-7302-1.

For those of you willing to deepen even more their background, here are some additional references, a little bit old, but not out-dated and quite pedagogical:
•    Grinblatt, M. & Titman, S., Financial Markets and Corporate Strategy, Irwin/McGraw-Hill, 1998.
•    Weston, Chung & Hoag, Mergers Restructuring and Corporate Control, Prentice Hall, 1990.
More recently:
•    Bruner (2004), Applied Mergers and Acquisitions, Wiley Finance, ISBN-13: 978-0471395058.

For those who would like easy but exciting readings on the subjects covered here, I would suggest:
•    Bernstein, Peter, Capital Ideas Evolving: The Improbable Origins of Modern Wall Street, John Wiley & Sons, 2007.
•    Burrough & Helyar, Barbarians at the Gate, Harper & Row, 1990.
•    Nora Dominique, Les possédés de Wall Street, Paris, Deno 1, 1987.

For the Impact side of this course, I would suggest:
•    Nicholls A. (2017), Social Finance, edited by Alex Nicholls, Rob Paton, and Jed Emerson, Oxford University Press, ISBN 9780198804420.

Informations complémentaires

Presential courses take place at the following location: Solbosch, S.R42.503.(check still Time Edit at all times). Tutorial sessions will be either used for Tutorials or sometimes for lectures by practitioners. In the latter case, only one tutorial is used for the all the students (not in group thus). Use of dates are confirmed in an Excel scheduling file entitled “INGEadvfin 2024-2025 – Schedule.xlsx”.
Online “live” classes, if any, take place on Teams.

Warning: This is subject to change. Check the Teams group announcements at all times before a given session.

Contacts

• Hugues Pirotte (professeur, sur MSFT Teams)
• Samy Willocx (teaching assistant, sur MSFT Teams) vous donnera accès à du support au travers des sessions d'exercices et sa disponibilité à des heures qu'il vous communiquera. Veuillez remarquer que le support est destiné à la bonne compréhension du matériel, les principes et la philosophie du cours, pas à la vérification de la précision dans les calculs ni de la sémantique.

Nous vous remercions de bien vouloir observer strictement la convention suivante quand vous nous envoyez un email: le sujet du message doit être composé de la manière suivante: “ADVFIN 2024 > [subject]”, et dirigé aussi bien à moi qu'à mon assistant. Les emails qui ne suivent pas cette consigne ne seront pas lus.

Toutes les annonces spécifiques durant le cours sont effectuées via "THE WALL” dans le groupe Teams. Ce qui ne figure pas ici ou à cet endroit, est une pure rumeur. Teams sera utilisé pour toute communication. Vous êtes seul(e) responsable (a) de vous connecter au groupe TEAMS, de demander à y être inscrit(e) le cas échéant, ou de nous écrire pour annoncer tout problème de connexion et (b) d'être au courant de ce qui est "posté" sur ce groupe.

Campus

Solbosch

Méthode(s) d'évaluation

• Examen écrit
• Travail de groupe

Examen écrit

Travail de groupe

The certifying evaluation of this course comprises two components: a real-life case to be realised during the course and submitted by the day of the last course, and a written exam.
The case is optional and a deadline will be fixed to register as a person willing to do the case.
In case of a sanitary crisis, the written exam can be perfectly managed “online” as a work to submit after a defined number of hours, using the GradeScope system.

Construction de la note (en ce compris, la pondération des notes partielles)

If the real-life case is not chosen by the deadline:
Final grade = Final Exam (100%).

If the real-life case is chosen:
Final grade = Final Exam (60%) + Financial case (40%, only if the final exam grade is ≧ 8/20). If the exam grade is ≧ 15/20, the final case counts only if it is higher than the exam grade. In the event the case doesn’t count: Final grade = Final Exam (100%).
Important rule: the grade of the case cannot only be kept based on the grade of the first exam session corresponding to the year where the case was handed in. Otherwise said, once the case doesn’t count, it never counts.

Each component of the final grade, i.e. the exam and the groupwork, comprises a grading item for the respect of the indications/rules. If any indication/rule related to one of the components is not followed precisely, that item might receive a null grade.

For both presential and online modes:
•    The final exam is a closed-book exam, with a personal summary of max. 5 full pages (recto-verso, 10 “faces” in total) handwritten allowed (the own handwriting of the student). 

Langue(s) d'évaluation

• anglais
• (éventuellement français, Espagnol, Néerlandais )