Financial Management

Code:

2GE01

Acronym:

FM

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2018/2019 - 1S

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

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
MIM	38	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.

Learning outcomes and competences

Students 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

1. Introduction: The Main Concepts and Models from the Perspective of Corporate Value
1.1. The Financial Paradigm of the Corporation
1.1. Value, Return and Risk
1.2. Asset Pricing Models

2. Investment Decisions and the Enterprise Value
2.1. Investment Decisions and Value Creation
2.2. Value, Risk and Flexibility in Investment Decisions
2.3. Theoretical and Practical Issues of Investment Decisions

3. Short-Term Financial Decisions
3.1. Financial Planning and Short-Term Financial Management
3.2. Cash Management
3.3. Trade Credit Decisions
3.4. Short-Term Financing

4. The Capital Structure
4.1. The Importance of the Capital Structure Problem
4.2. Theories of Capital Structure
4.3. Searching for an Optimal Capital Structure

5. Financing Decisions and the Enterprise Value - Equity
5.1. Financing Decisions and Financial Innovation
5.2. Equity Financing Operations

6. Financing Decisions and the Enterprise Value -Debt and Hybrids
6.1. Medium and Long Term Debt Financing Operations
6.2. Hybrid Financing Operations

7. Dividend Policy
7.1. The Dividend Puzzle
7.2. Dividend Policy in Frictionless Markets
7.3. The Effect of Market Imperfections
7.4. Theories of Dividend Policy

Mandatory literature

Ross, Stephen A., Randolph W. Westerfield and Jeffrey Jaffe; Corporate Finance, Boston: McGraw-Hill Irwin, 2010

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 that should adress several case studies.

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Participação presencial	10,00
Teste	45,00
Trabalho escrito	45,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Apresentação/discussão de um trabalho científico	12,00
Estudo autónomo	80,50
Frequência das aulas	30,00
Trabalho escrito	80,00
Total:	202,50

Eligibility for exams

Students are evaluated on a continuous basis, taking into consideration their work across the whole course, in the form of applied group assignments.

Moreover, every student will sit to perform one evaluation tests.

Only exam evaluation is not available.

Calculation formula of final grade

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

Final test: 45%
Group assignments: 45%
Participation:10%

The final grade cannot be higher than the Final test grade in more than 3 points (out of 20).