Description

Theory/Practice
2

Laboratory
2

Instructors

Carlos J. Pereira Freitas

Contents

S1. Introduction to Corporate Finance (0.5 weeks)
S2. Present Value (2.5 weeks)
Introduction to Present Value
Calculating Present Values
S3. Understanding Financial Statements (2.5 weeks)
The Principal Financial Statements
Reading and Analyzing Financial Statements
The Concept of Free Cash Flow to Equity/Firm
- Test -
S4. Net Present Value and Investment Decision (1.5 weeks)
The Concept of Net Present Value
The Value of Common Stocks
S5. Risk, Return and Cost of Capital (1.5 weeks)
Introduction to Risk and Return
Diversification and the Portfolio Theory
Asset Pricing Models: CAPM
Risk and Cost of Capital
- Case Study -
S6. Financing Decision and Capital Structure (1 week)
Financing Decision and Corporate Value
Financing and Investment Decisions: WACC
S7. Evaluation of Investment Projects (2.5 weeks)
Elements of Financial Evaluation of Investment Projects
Evaluation Criteria: NPV, IRR, and Payback Period
Risk and Uncertainty in Investment Projects Valuation
- Case Study -

Learning Outcomes

The main objective of the course is to help students learning a set of concepts and tools necessary for monitoring, project valuation, and performance measurement of engineering activities with economic and financial impact on the company value. Students should develop skills that allow them to understand the company value optimization and investment project valuation.
Specific objectives (O) of the course are:
O1. Develop a basic knowledge of corporate finance, improving the students' skills in comprehension and researching of relevant information to economic and financial management and investment valuation projects;
O2. Develop the skills to understand the economic and financial information of the company in supporting the decision-making process;
O3. Develop skills on the main corporate valuation techniques;
O4. Master the basic concepts and techniques of financial assessment, measurement of profitability, and risk assessment of investment projects;
O5. Understand the corporate-financing choices, adjusted to the company´s needs, and evaluating the impacts of these decisions on the value and risk of the company;
O6. Develop the ability to understand and estimate the financial variables that are involved in the investment decision-making process;
O7. Contribute to the students' familiarization with the case study technique.