Master 2020/2021

Advanced Finance

Type: Compulsory course (Global Business)

Area of studies: Management

Delivered by: Faculty of Management (Nizhny Novgorod)

Where: Faculty of Management (Nizhny Novgorod)

When: 1 year, 2-4 module

Mode of studies: offline

Instructors: Anna Novak

Master’s programme: Global Business

Language: English

ECTS credits: 9

Contact hours: 68

Course Syllabus

Abstract

The key aim of the course is to provide students with knowledge and skills in taking corporate financial and investment decisions, develop analytic instruments to assess the effectiveness and efficiency of such decisions, elaborate models of corporate financial management.

Learning Objectives

• The objectives of mastering the discipline "Finance (advanced level)" are to form stu-dents' complex knowledge about modern directions of development of the theory and practice of corporate finance, models of analysis of the company's financial decisions, re-sults and tools for their empirical testing in mature and emerging markets. To master an academic discipline, students must possess the following knowledge and competencies: • Know the prerequisites for the construction, structure and economic conclusions of mi-croeconomic, macroeconomic and econometric models; • Be able to formulate and solve problems arising in the course of research and teaching activities that require in-depth professional knowledge; • Be able to choose adequate methods and models for the study of specific micro and mac-roeconomic processes, adapt existing methods to the requirements of the specifics of the tasks, as well as develop new methods; • Present the results of theoretical and applied research in the form of written works; • Have the skills of independent research. • Know the basics of accounting and / or management accounting • Know the basics of macroeconomics, microeconomics, statistics

Expected Learning Outcomes

• Understand the taxation and budget process. Understand monetaty policy of Bank of Russia. Know special characteristis of Russian budget process and taxation.
• Undertand structure of the stock market and bond market. Can analyze financial risks. Know pecularities of banking sector
• Understand Fundamental principles and approaches to evaluation. Can classify and analyze factors determining the value of the company. Can calculate cash flow of the company (FCFF) and owners (FFCE)
• Know modern ways of research on capital structure. Understand principles for analyzing expected returns based on the CAPM model in growing capital market. Understand the role of the concept of capital structure in modern financial analysis.
• Can compare right and left radical theories and their empirical support. Understand signal payment policy models. Can analyze the signal effects of payment policies to inves-tors.

Course Contents

• Fiscal and Monetary Policy
  The essence of taxes, their role in the development of economic relations. Taxation and budget process. State and tax policy. The system of principles of taxation: economic, legal and organi-zational. The tax system of the Russian Federation, its legal regulation. The concept of a tax system. Types of taxes: federal, regional, local. Features and composition of federal taxes. Fea-tures and composition of regional taxes. Features and composition of local taxes. Elements of tax. The object of taxation. The tax base. Tax rates. Tax exemptions. The structure of the tax authorities of the Russian Federation. The Federal Tax Service. The economic essence of corporate income tax. His role in the formation of budget revenues. Regulatory regulation of the procedure for calculating and paying corporate income tax. The essence of the value added tax. Its role in the formation of revenue budgets. Regulatory regulation of the procedure for calculating and paying value added tax. Characteristics of excise. Their role in the formation of budget revenues. Regulatory regulation of the procedure for calculating and paying excises. List of excisable goods. Payers of excise. Special tax regimes. Monetary policy of the Bank of Russia.
• Financial Markets
  The structure of the stock market. Securities market: stock market, bond market. Financial in-termediaries. Financial risks. Banking sector.
• Corporate finance and firm valuation: interconnection of conceptual provisions
  Fundamental principles and approaches to evaluation. The method of discounted cash flows and the principles of calculating the present value of the company as an asset generating cash flow. Factors determining the value of the company and their grouping. Evaluation of the ability of the company to generate cash flows from the assets used, the expected growth rate of cash flows, the time it takes to achieve stable growth and the cost of capital. The method of comparison. Principles of choice of analog companies. The reasons for the differences in the results of evaluation obtained on the basis of various methods. Analysis of situations and identification of conditions for the occurrence of financial bubbles. Cash flow of the company (FCFF) and owners (FFCE), especially the calculation of the present value (PV), terminal value (TV), will dissect the value of the company through the expected dividend flow.
• Current research on capital structure
  The role of capital costs in modern financial analysis of the company. Cost of equity and meth-ods for analyzing market risk premiums: historical and forecast methods for analyzing market risk premiums. Empirical studies of the adequacy of the "accounting" and "fundamental" beta. Analysis of the return expected by the owners of the corporation in the growing capital markets. Systematic and non-systematic risks in a growing capital market. Types of barriers to diversify-ing unsystematic risks in growing capital markets. Principles for analyzing expected returns based on the CAPM model in growing capital mar-kets. Country risk and its components. Yield spread as an indicator of country risk. The problem of accounting for unsystematic risk in the analysis of profitability, expected by the owner of the corporation in a growing market. Modifications of CAPM for the emerging market (specific use of global CAPM, national CAPM, adjusted CAPM). Alternative approaches to analyzing the cost of equity in growing markets: principles of the D-CAPM Estrada model, cumulative meth-ods. The role of the concept of capital structure in modern financial analysis. MM theorem as a methodological basis for the study of capital structure. Development of models for the analysis of capital structure in the context of weakening the assumptions of the basic theorem of MM. Methods and results of the study of the role of information asymmetry in the choice of capital structure. The capital structure of Russian companies and the principles of its research. Stages of development of a compromise concept: the need to move from static to dynamic compromise models of capital structure. Studies of tax benefits associated with debt financing. Principles of modeling the choice of capital structure depending on the tax factor (Graham, 2003). Quantitative assessment of tax savings associated with debt financing. Dynamic trade-off models of the structure of capital with the condition of the absence of transaction costs (Bren-nan / Schwartz, 1984). Revision of financial leverage (mean reversion of financial leverage) and movement towards the target capital structure. Key results of empirical studies of the compro-mise concept of capital structure. Principles of a model (hierarchy) of financing (pecking order of financing) and methods for test-ing it (Shyam-Synders, 1991; Frank / Goyal, 2003; Fama / French, 2002). Signal argument of the order (hierarchy) of financing. The model of the hierarchy of choice of sources of financing, taking into account the participation of shareholders in new issues of shares (the pecking or funding sources with the asymmetry of company risk information (Halos / Heider, 2004).
• Current research on the models of investor payments policy
  Dividend Disputes: Right and Left Radical Theories and Their Empirical Support. Signal pay-ment policy models. Investigations of the signal effects of payment policies to investors. Pat-terns of stock repurchase policies and their empirical research "Stylized Facts" Lintner and their testing. Country comparisons of dividend payout policies: empirical studies on Canadian and Australian companies (Chateau (1979) and Shevlin (1982)), French (MacDonald et al. (1975)), United Kingdom (Lasfer (1996)). Signal payment policy models and their development. Model of knowledgeable clients (Alen / Bernardo / Welch, 2000), changes in signal effects (Grullon / Michaely / Swamianathan, 2002). Basic test methods for signaling corporate payment policy models: event method, time series analysis (Fama / French, 2001). Key results of empirical studies of payoff effects signal effects. Stylized facts of stock repurchase transactions. The cost of adverse selection in stock repurchase transactions (Brennan / Thakor, 1990). Empirical evidence of stock repurchases. Lintner's styl-ized fact model adjustment (Grullon / Michaely, 2002). Decisions on stock repurchases and op-tions for you-management schemes (Weisbenner, 2000). A study of the determinants of corpo-rate wwp policies in the new economy (Brav / Graham / Harvey / Michaeli, 2003). Dividend premium in new issues (Baker / Wurgler, 2000). New dividend policy factors: debt rating, stock buyback, investor sentiment and dividend premium phenomenon (Baker / Wurgler, 2000).
• Continuation of course in students during mobility period (at Johannes Kepler University (Austria), at University of Bergamo (Italy)).

Assessment Elements

• Homework
• Classwork
• Exam
  Экзамен проводится в устной форме с использованием синхронного прокторинга университета University of Bergamo. Экзамен проводится на платформе Zoom (http://zoom.us/ ). К экзамену необходимо подключиться за 15 минут. Для участия в экзамене студент обязан: заранее зайти на платформу прокторинга, провести тест системы, включить камеру и микрофон, подтвердить личность. Во время экзамена студентам запрещено: общаться (в социальных сетях, с людьми в комнате), списывать. Кратковременным нарушением связи во время экзамена считается прерывание связи до 10 минут. Долговременным нарушением связи во время экзамена считается прерывание связи 10 минут и более. При долговременном нарушении связи студент не может продолжить участие в экзамене. Процедура пересдачи аналогична процедуре сдачи.
• Homework
• Classwork
• Exam
  Экзамен проводится в устной форме с использованием синхронного прокторинга университета University of Bergamo. Экзамен проводится на платформе Zoom (http://zoom.us/ ). К экзамену необходимо подключиться за 15 минут. Для участия в экзамене студент обязан: заранее зайти на платформу прокторинга, провести тест системы, включить камеру и микрофон, подтвердить личность. Во время экзамена студентам запрещено: общаться (в социальных сетях, с людьми в комнате), списывать. Кратковременным нарушением связи во время экзамена считается прерывание связи до 10 минут. Долговременным нарушением связи во время экзамена считается прерывание связи 10 минут и более. При долговременном нарушении связи студент не может продолжить участие в экзамене. Процедура пересдачи аналогична процедуре сдачи.

Interim Assessment

• Interim assessment (2 module)
  0.12 * Classwork + 0.4 * Exam + 0.48 * Homework
• Interim assessment (3 module)
  Grade received by the students at Johannes Kepler University (Austria) during their mobility period
• Interim assessment (4 module)
  Grade received by the students at University of Bergamo (Italy) dyring their mobility period

Bibliography

Recommended Core Bibliography

• Alec N. Kercheval. (2012). Financial Economics: A Concise Introduction to Classical and Behavioral Finance, by T. Hens and M. O. Rieger. Quantitative Finance, (10), 1487. https://doi.org/10.1080/14697688.2012.695085

Recommended Additional Bibliography

• McCrary, Stuart A.. Mastering Corporate Finance Essentials : The Critical Quantitative Methods and Tools in Finance, John Wiley & Sons, Incorporated, 2010. ProQuest Ebook Central