Finance

Objectives

This course is devoted to the fundamentals of modern corporate finance theory and practice with a strong emphasis on its real-life applications. Students are expected to learn about the fundamentals of accounting and be able to interpret balance sheets and income statements, to understand the sources and uses of cash flow in the organization, time value of money, perform capital budgeting, understand the risk/return relationship and the cost of capital, understand how capital structure affects risks, returns, and value and understand the capital employed in the organization, net working capital needs, its applications and funding and impact on financial management

General characterization

Code

14502

Credits

2

Responsible teacher

Paulo Pinho

Hours

Weekly - Available soon

Total - Available soon

Teaching language

Portuguese | English

Prerequisites

Available soon

Bibliography

Berk, Jonathan and DeMarzo, Peter, “Corporate finance”, 4th ed, Pears

Teaching method

This is an applied course and thus relies extensively on class discussion of case studies, and therefore requires preparation in advance of each class. Case discussions will be supplemented with lectures, simulations, guest speakers and class exercises.?

Evaluation method

The assessment of this curricular unit is done together with the block of curricular units of the same area of knowledge. This assessment has 3 moments, which together define the final grade of the curricular unit:
• Individual exam with a weighting of 50% of the total mark
• Group work with a weighting of 35% of the total grade value
• Individual reflection-action exercise carried out at the end of the curricular unit, with a weighting of 15% of the total grade value. The set of individual action-reflection exercises is a journaling activity, which will constitute, at the end, a learning portfolio capable of synthesising the contributions of the Executive Master for that student.

Subject matter

The course will be structured around the following topics.
• Introduction to corporate finance
• Understanding the accounting fundamentals
• Financial analysis: risk, return and cash flows
• New working capital requirements; Capital employed; ROCE
• Time value of money and its applications
• Measuring value creation: Net present value and its relation with the internal rate of return
• Capital budgeting
• Capital structure and its impact on the value of the firm and its cost of capital
• Bankruptcy costs and agency costs of debt
• Interaction between financing and investment decisions
• Short-term financial management