| Code |
13337
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| Year |
1
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| Semester |
S1
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| ECTS Credits |
6
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| Workload |
TP(30H)
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| Scientific area |
Management
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Entry requirements |
Not applicable.
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Learning outcomes |
The Corporate Finance Curricular Unit aims to develop the following skills:
i) To understand how the financial policy of a corporation affects its financial performance;
ii) Analyze the role played by investment and financing decisions in the value of a company;
iii) Prepare students to perform company valuations using different methods;
iv) Provide students with the theoretical concepts and the practical tools needed to determine the cost of capital;
v) Understand the problem of the capital structure;
vi) Understand how the dividend policy affects the company's financing options.
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Syllabus |
Part I - Revision of Fundamental Concepts
1. Revision of Fundamental Concepts
1.1 Financial Statement Analysis
1.2 Time Value of Money
1.3 Interest Rates
Part II – Capital Budgeting and Corporate Valuation
2. Capital Budgeting
2.1 Investment Criteria
2.1.1 Net present value
2.1.2 Internal rate of return
2.1.3 Payback period
2.1.4 Adjusted present value
3. Cost of Capital
3.1 Debt
3.2 Equity
3.3 Weight cost of capital
4. Valuation Methods
(cash flows, market multiples, dividends, economic value added, market value added)
Part III - Capital Structure
5. Capital Structure and Modigliani and Miller
5.1 In the absence of corporate taxes
5.2 With corporate taxes
6. Other factors that influence the capital structure
6.1 Personal taxes
6.2 Costs of financial distress
6.3 Agency problems
Part IV - Payout decision
7. Dividend policy
7.1 Payout versus retain
7.2 Dividends versus repurchases
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Main Bibliography |
Brealey, R.;Myers, S.; Allen, F.; Mohanty, P. (2018). Principles of Corporate Finance. Mcgraw-Hill.
Damodaran, A.(2001). Corporate Finance: Theory and Practice. Wiley.
Ross, S., Jordan, B. (2018). Fundamentals of Corporate Finance. Mcgraw-Hill.
Tirole, J. (2006). The Theory of Corporate Finance. Princeton University Press.
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Teaching Methodologies and Assessment Criteria |
The lessons of this UC are theoretical and practical. The theoretical classes expose the theoretical concepts supported
by material available on the Moodle platform. In practical classes, students have to solve exercises and case studies.
The assessment comprises two stages:
1st individual test - 60%. This evaluation element evaluates if the student understood the syllabus taught.
2nd Attendance - 10%. This assessment item aims to stimulate student participation and critical thinking in class.
3nd Work group - 30%. This element comprises a work that students must develop and present orally in class on a topic from the program presented.
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Language |
Portuguese. Tutorial support is available in English.
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