Applied Corporate Finance
Code
2232
Academic unit
null
Department
null
Credits
null
Teacher in charge
Paulo Soares de Pinho
Teaching language
Objectives
This course aims to apply corporate finance theory to real-world corporate financial policy and financial management decisions. It assumes students took a previous introductory course in corporate finance theory and aims to make extensive application of such theoretical background either by extending it to new concepts and applications or to directly apply it on a variety of practical situations. There, students will be also required to understand the role played by corporate finance in the broader context of firm management, corporate strategy and the whole corporate value creation process. We also aim to give students a better understanding of financial markets and institutions and their role on corporate financial decisions and policy. Students are expected to understand the practical limitations of financial theory and the role played by information and its asymmetries, agency costs and other market imperfections on firms value and decision-making.
Prerequisites
Subject matter
Bibliography
Teaching method
This course uses a combination of formal lectures and case-study discussions, with an emphasis on the latter. All students enrolled will form groups of 5 members. All groups are required to submit 6 written case reports, three on each half-semester. Graders will allocate groups to cases in order to guarantee a sufficient number of written reports for each case. Students should be ready to share their analyses in class presentations and to actively participate in all class discussions, regardless of having been allocated (or not) a particular case for written report. All case-studies identified on the syllabus will be used for assignment (although each group is limited to six written reports) and will be discussed in class. All students are assumed to have read and analysed all case-studies and to be ready to publicly present their conclusions and answer any questions posed by the instructor on them. Sometimes, cases will be used as a basis for role playing by different groups of students of real-life simulated events. More than one group may be involved in class presentations.
When cases are assigned to groups, one of the student groups who prepared the written reports will be asked to present to the class their own recommendations. Oral case presentations have a 30- minute time limit. Once the initial presentation is over, other students will be asked to comment on the previous presentation (15-minute time limit). Such comments should emphasize each groups conclusions and supporting arguments. The discussion is open to all students in the class. Then, the instructor will highlight the main conclusions and the key learning benefits achieved with the case analysis and discussion.
Written reports are expected to have the quality of presentations by consultants or investment bankers to the Board of Directors of the Company. These reports should specifically address the issues raised by the instructor via a previously posted set of questions. All reports should start with a first-page "executive summary" that identifies main issues and summarises fundamental recommendations. Then, the report should address the issues raised by the instructor.
There is a rather free format for the reports, and emphasis should be placed on the originality of the analysis provided and the overall professional quality of the presentation. Mere repetition of case information is strongly penalised. Focus on the key issues is preferred against lengthy presentations of useless facts and data. The latter will also be severely penalised.
Evaluation method
Group (5 people per team) written reports on the case-studies: 40%
Individual participation on class discussions and presentations 35%
Final Exam: 25%
o Minimum required exam grade: 9.5 (/20)