Understanding market mechanisms is based on a number of concepts and tools that need to be integrated in order to master the different professions of modern finance.

The purpose of this training is to offer an approach that allows a practical and progressive approach to these fundamental principles which constitute the foundations of both market finance and corporate finance.

Day 1: Fundamentals of market and corporate finance

  • Foundations for a certain future
  • Current value
  • Fisher’s principle of separation
  • Modigliani-Fischer theorem

Foundations for an uncertain future

  • Contingent titles
  • Investment decisions

Expected profitability-risk relationship

  • Profitability and risk of a portfolio of 2 to n assets
  • Risk reduction through diversification
  • Measuring the risk of an asset
  • Optimal portfolio choice

Day 2: Business valuation and valuation criteria

Valuation of non-indebted companies

  • DDM and Gordon-Shapiro model
  • Funding table
  • Free cash-flow model
  • Growth opportunities

Valuation of indebted companies

  • Yields to Maturity
  • Interest rate risk
  • Term structure of interest rates
  • Credit risk

The cost of capital

  • The value and financial structure of a company
  • The role of taxation and debt

Analysis of investment projects

  • Decision criteria
  • The elements of the NPV calculation
  • Analysis of the determinants of value
  • Fundamentals of project financing