Financial Management
Code
2414
Academic unit
null
Department
null
Credits
7
Teacher in charge
Martijn Boons e Paula Antão
Teaching language
English
Objectives
This finance course is concerned with understanding what financial managers do. It starts by discussing valuation.
In particular, it will be discussed the valuation of stocks, bonds and options. The course then introduces risk and return and develops tools for measuring risk and determining appropriate discount rates. It also considers issues relevant to corporate managers in determining optimal investment and financing policies. It examines the impact of taxes, agency costs, and asymmetric information on debt and payout policy.
We will seek a balance between the theoretical paradigms, the empirical findings, and their applicability to the real world. Emphasis will be on principles and problem solving. Lectures and exams will concentrate on both quantitative and conceptual foundations.
Prerequisites
Subject matter
1. Valuation of Stocks, Bonds and Options
2. Portfolio Theory, Capital Asset Pricing
3. Cost of Capital
4. Capital Budgeting
5. Capital Structure
6. Payout Policy
Bibliography
The main textbook: Corporate Finance by Jonathan Berk and Peter DeMarzo, Pearson 2nd edition, Global Edition. Some complementary material will be posted for download on the class web page.
Teaching method
Classes are weekly and last for 3 hours. Classes are devoted to the presentation of the material by the instructor and to application of the material in the form of exercises. Practice exercises will be made available each week and discussed in a workshop. There will be a group assignment in the form of a company report.
Evaluation method
In terms of the evaluation there will be a mid-term, which will cover the material discussed till one week before. The mid-term will be MANDATORY. The final exam will cover all the material and is also mandatory. The minimum grade in the midterm and in the final exam to pass the course is 7. Total score in the course will consider:
-Company report (C, in groups of 3 or 4, total of two assignments) 30%
-Mid-term exam (MT, individual) 11th april, in the morning 35%
-Exam (E, individual) 35%