Corporate Finance

Code:

2FI03

Acronym:

CF

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2015/2016 - 1S

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
ME	22	Bologna Syllabus	1	-	7,5	56	202,5
		Syllabus - english track	1	-	7,5	56	202,5
MIF	55	Bologna Official Syllabus	1	-	7,5	56	202,5

Teaching language

English

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. 

Learning outcomes and competences

Studenrs are expected to obtain an ability to go through the process of financial analysis and valuation of any business organization or investment project, always from the perspective of value creation.

Furthermore, students are expected to acquire specific competences in financial decision-making within the business organization, either on the investments side or on the financing side.

Finally, students will be trained on the interaction of business organizations with the financial markets. 

Working method

Presencial

Program

Part I - Introduction to Corporate Finance and Valuation

1 . Introduction
1.1 . The Financial Paradigm of the Corporation
1.2 . The Financial Environment of the Corporation

2 . The Main Concepts and Models from the Perspective of Corporate Value
2.1 . Value, Return and Risk
2.2 . Asset Pricing Models

3 . Valuation
3.1 . The Financial Analysis of a Corporation
3.2 . Discounted Cash-Flow Valuation
3.3 . Relative Valuation 

Part II - Investment and Financing Decisions

1. Investment Decisions and the Enterprise Value
1.1 . Investment Decisions and Value Creation
1.2 . Value, Risk and Flexibility in Investment Decisions
1.3 . Theoretical and Practical Issues of Investment Decisions
1.4 . The Flexibility Factor in Investment Decisions and in Project Management

2 . Short-Term Financial Decisions
2.1 . Financial Planning and Short-Term Financial Management
2.2 . Cash Management
2.3 . Trade Credit Decisions
2.4 . Short-Term Financing

3. The Capital Structure
3.1 . The Importance of the Capital Structure Problem
3.2 . Theories of Capital Structure
3.3 . Searching for an Optimal Capital Structure

4. Financing Decisions and the Enterprise Value
4.1 . Financing Decisions and Financial Innovation
4.2 . Medium and Long Term Debt Financing Operations
4.3 . Hybrid Financing Operations
4.4 . Equity Financing Operations

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

Mandatory literature

Ross, Stephen A., Randolph W. Westerfield and Jeffrey Jaffe; Corporate Finance, McGraw-Hill / Irwin, 2010. ISBN: 978-0-07-338233-7

Complementary Bibliography

Maness, Terry S., and 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 of seven lectures. Each lecture will be object of a summary text and of the indication of specific readings.

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Participação presencial	20,00
Teste	40,00
Trabalho escrito	40,00
Total:	100,00

Eligibility for exams

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

Moreover, every student will sit for two performance evaluation tests.

Calculation formula of final grade

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

Two tests: 40% (20% each)
Two group assignments: 40% (20% each)
Individual weekly assignments and Participation during classes: 20%