Corporate Finance

Code:

2MiF04

Acronym:

CF

Keywords
Classification	Keyword
OFICIAL	Management Studies

Instance: 2022/2023 - 1S

Active?	Yes
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
MIF	43	Official Syllabus after 2020-2021	1	-	3	21	81

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 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 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 includes the strategic and structural issues in financial decision-making, the most important decisions of value creation. 

Learning outcomes and competences

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

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

N.A.

Program

1. Introduction
1.1. The Financial Paradigm of the Corporation
1.2. Review of Main Concepts

2. Investment Decisions
2.1. Capital Budgeting Valuation Methods
2.2. Theoretical and Practical Issues of Investment Decisions
2.3. Sensibility Analysis and Simulation

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

4. Equity Financing Operations
4.1. Equity Financing Instruments
4.2. Sources of Equity Financing
4.3. Cost of Equity

5. Debt and Hybrid Financing Operations
5.1. Bank loans
5.2. Bonds
5.3. Leasing
5.4. Hybrid Instruments

6. Dividend Policy
6.1. Dividend Policy in Frictionless Markets
6.2. Share Repurchases
6.3. The (Ir)relevance 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 textbook, 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 updating. 

The tuition method in the discipline consists of a combination of theoretically based tuition with the critical analysis of decision-making problems. 

The direct participation of students in the classroom is encouraged. 

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Participação presencial	25,00
Teste	75,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	60,00
Frequência das aulas	21,00
Total:	81,00

Eligibility for exams

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

Moreover, every student will sit for one final test.

Only exam evaluation is not available (in both assessment seasons). However, the final test can be (re)-taken in the re-sit season, both for course approval and grade improvement. In any case, the final test only accounts for 75% of the grade.

Calculation formula of final grade

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

Final test: 75%
Quizzes: 25%

Examinations or Special Assignments

N.A.

Internship work/project

N.A.

Special assessment (TE, DA, ...)

N.A.

Classification improvement

Only the final test in the re-sit season

Observations

N.A.