Corporate Finance

Code:

2FIN10

Acronym:

FE

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2011/2012 - 2S

Active?	Yes
Responsible unit:	Management
Course/CS Responsible:	Master in Finance

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
EGA	1	Bologna Official Syllabus	1	-	6	54	162
FIN	70	Bologna Official Syllabus	1	-	6	54	162
MARK	0	Bologna Official Syllabus since 2008	1	-	6	54	162

Teaching language

Portuguese

Objectives

The objective of the discipline is to go through the major problems of Corporate Finance, formulating the most important issues arising from the financial activity of a corporation, that is, the concepts, methods and decision tools which serve as a basis for financial analysis and decision-making in the company, namely investment and financing decisions. It will be sought always a direct support on the contributions of the most relevant academic work on each issue.

The program is developed following a perspective of the value of the corporation. As a basic paradigm, it has been adopted the one of the maximization of the value of the corporation for its shareholders, partners or owners. Every financial issue will thus be approached in terms of its potential for generating corporate value.

The program of the discipline is divided into the themes of financial analysis, the strategic and structural issues in financial decision-making, the most important decisions of value creation and value stabilization and the phenomena of corporate value reallocation.

Program

1 . Introduction

1.1 . The Financial Paradigm of the Corporation
1.2 . The Financial Environment of the Corporation
1.3 . Financial Instruments and Asset and Capital Securitization
1.4 . A Review of the Main Concepts

2 . The Main Concepts and Models from the Perspective of Corporate Value

2.1 . Value, Return and Risk
2.2 . Asset Pricing Models
2.3 . Option Pricing Models
2.4 . The Flexibility Factor as a Driver for Value Creation with Incomplete Contracts

3 . Valuation

3.1 . The Analysis and Valuation of Debt and Equity Securities
3.2 . The Different Concepts of Value
3.3 . The Financial Analysis of a Corporation
3.4 . Theoretical and Practical Issues in Valuating Companies and Projects

4. The Financial Architecture of the Corporation

4.1 . The Concept of Financial Architecture
4.2 . Organizational Design and Corporate Governance
4.3 . The Importance of the Capital Structure Problem
4.4 . Theories of Capital Structure
4.5 . Searching for an Optimal Capital Structure

5 . Dividend Policy

5.1 . The Dividend Puzzle
5.2 . Dividend Policy in Frictionless Markets
5.3 . The Effect of Market Imperfections
5.4 . Theories of Dividend Policy

6. Investment Decisions and the Enterprise Value

6.1 . Investment Decisions and Value Creation
6.2 . Value, Risk and Flexibility in Investment Decisions
6.3 . Theoretical and Practical Issues of Investment Decisions
6.4 . The Flexibility Factor in Investment Decisions and in Project Management

7. Financing Decisions and the Enterprise Value

7.1 . Financing Decisions and Financial Innovation
7.2 . Equity Financing Operations
7.3 . The Initial Public Offers
7.4 . Medium and Long Term Debt Financing Operations
7.5 . Hybrid Financing Operations
7.6 . Leasing Financing Contracts
7.7 . Flexibility and Contracting in Financing Decisions

8 . Short-Term Financial Decisions

8.1 . Financial Planning and Short-Term Financial Management
8.2 . Cash Management
8.3 . Trade Credit Decisions
8.4 . Short-Term Financing

9 . The Stabilization of Enterprise Value

9.1 . The Financial Risks as a Factor of Value Destruction
9.2 . Asset Liability Management in Non-Financial Companies
9.3 . Financial Term Contracts and their Valuation
9.4 . The Process of Corporate Risk Management

10 . The Reallocation of Enterprise Value

10.1 . Financial Restructuring of Companies
10.2 . Bankruptcy and Liquidation
10.3 . The Market for Corporate Control
10.4 . Buy-Outs and Takeovers

Mandatory literature

Stephen A. Ross, Randolph W. Westerfield e Jeffrey Jaffe; Corporate Finance, McGraw-Hill. ISBN: 978-0-07-338233-3

Complementary Bibliography

Terry S. Maness e John T. Zietlow; Short-Term Financial Management, West Publishing Company, 1993. ISBN: 0-314-01268-0

Teaching methods and learning activities

Students who are contacting the discipline for the first time are advised to begin by studying carefully the recommended text book, as proposed in the bibliography. The same can be said with respect to those who might have acquired their financial education too long ago and might need an updating.

The tuition method in the discipline consists in a combination of theoretically based tuition with the critical analysis of decision-making problems and situations and the study of real world cases, chose to illustrate each major issue.

The direct participation of students in the classroom is encouraged. Moreover, the classes are organized into working groups, each one of which must submit an applied research work on a subject that will be proposed to them.

The program of the discipline will extend through fourteen lectures divided in two parts. Each lecture will be object of a summary text and of the indication of specific readings.

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Description	Type	Time (hours)	Weight (%)	End date
Attendance (estimated)	Participação presencial	42,00
Final examination	Exame	2,00
Group assignment	Defesa pública de dissertação, de relatório de projeto ou estágio, ou de tese	42,00
	Total:	-	0,00

Eligibility for exams

There are no minimum requirements to be admitted to final exam.

Calculation formula of final grade

Students are evaluated on a continuous basis, taking into consideration their work across the whole course, either in the form of theoretical or applied group assignments or from their active participation during lectures.

Moreover, every student will sit for a final performance evaluation exam.

Students final marks will result from the weighted average of the marks assigned to the following factors:

Final examination 50%
Group assignment 40%
Attendance and participation in lectures 10%

Classification improvement

Improvement of final grade can by obtained through re-sitting for final exam.