Base Knowledge
Students should have basic knowledge of finance:
CB1 – Financial Calculation
CB2 – Financial Management
CB3 – Calculation
CB4 – Statistics
Teaching Methodologies
In order to maximise student participation in class and in the learning process, the classes include the following teaching-learning methodologies:
ME1 – expository, to present the theoretical frameworks of reference;
ME2 – participatory, with analysis and resolution of practical exercises;
ME3 – active, with individual work.
In order to increase student involvement with the course and self-study, the flipped classroom method will be used in some subjects, such as capital structure selection and profit distribution policy. To the same end, students will be given group assignments.
Learning Results
The learning objectives (LO) are:
LO1. Analyze the main determinants of the exchange rate and the equilibrium relationships in the international exchange and interest rate markets;
LO2. Explain the different currency risk hedging strategies;
LO3 – Explain the main motivations behind mergers and acquisitions (M&A);
LO4 – Explain the relationship between motivations and types of mergers and acquisitions;
LO5 – Compare the characteristics of a merger or acquisition through the form of acquisition, method of payment and behavior of the managers of the acquired company;
LO6 – Explain the common reasons for restructuring;
LO7. Know the rationale behind the different theories associated with capital structure selection;
LO8. Know the theories and factors that shape the distribution of results;
At the end of the course, students should have developed the following skills:
CD1 – Select foreign exchange risk management strategies;
CD2 – Identify the sources of value creation in M&A operations;
CD3 – Recognize the common reasons for restructuring;
CD4 – The ability to intervene in the definition of profit distribution policies and the selection of financing sources.
Program
P1 – Foreign exchange operations
1.1 Nominal and real exchange rates
1.2 How the spot and forward markets work
1.3 Formation of forward rates
1.4 Theory of efficient markets
P2 – Foreign Exchange Risk Management
2.1 Internal Currency Hedging Techniques
2.1.1 Choice of invoicing currency
2.1.2 Discounts for early payment or receipt
2.1.3 External financing in anticipation of export revenues
2.1.4 Diversification of currencies
2.2 External Exchange Risk Hedging Techniques
2.2.1 Futures contracts
2.2.2 Currency forwards
2.2.3 Swaps contracts
P3 – Derivatives in the Foreign Exchange Market
3.1 Currency Options
P4 – Mergers and Acquisitions and Corporate Restructuring
4.1 Categories of M&A and their Motivations
4.2 Sources of Value Creation and M&A Theories
4.3 Corporate restructuring strategies
4.4 Spin-offs, split-ups and split-offs
4.5 Equity carve-outs
P5 – Capital Structure
5.1 Explanatory theories
P6 – Profit distribution
6.1 Explanatory theories
Curricular Unit Teachers
Mário Jorge Sacramento dos SantosGrading Methods
Assessment will be conducted using one of the following methods:
FINAL ASSESSMENTMA1. A final exam; students who earn a grade of 10 or higher will pass.
AI usage guideline: Level 0 (no AI at all).
DISTRIBUTED ASSESSMENT
MA1. Final exam
AI usage guideline: Level 0 (no AI at all).
MA2. Completion of a written assignment (groups of 3 students)
AI usage guideline: Level 2 permitted (AI as a tool to support writing and code drafting). Students must attach a declaration of AI use listing the prompts used and a record of their critical analysis.
IMPORTANT NOTES:
1. Access to this form of assessment is contingent upon attendance at at least 80% of classes. An exception will be made for working students, who must provide proof of their status to the Academic Services Office.
2. No oral exams will be held during any of the scheduled exam periods;
3. The grade for the assignments will be valid for both the regular and make-up exam periods; however, students are not permitted to complete an assignment exclusively for the make-up exam period.
4. This form of assessment requires a minimum exam grade of 8 (on a scale of 0 to 20).
Students may choose from the following assignment options:
a. Establish contact with an exporting company exposed to foreign exchange risk. The objective is to assess the foreign exchange hedging strategies adopted by the company and, in dialogue with its managers, to reflect on the potential opportunity to adopt new ways of minimizing foreign exchange risks;
b. Critical evaluation of a set of articles related to M&A transactions.
Final Grade Formula (CF) for the Distributed Assessment:
CF = 0.60 × Exam + 0.40 × Coursework. If the CF is ≥ 9.5, the student passes.
Internship(s)
NAO
Bibliography
1. DePamphilis, D. M. (2018). Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases,
and Solutions. Academic Press, Ninth Edition.
2. Eiteman, D. K., Stonehill, A. I., Moffett, M. H. (2016). Multinational business finance. 14th edition. Global edition.
3. Ferreira, D. (2019). Swaps e Outros Derivados. Rei dos Livros
4. Gaughan, P. A. (2017). Mergers, Acquisitions, and Corporate Restructurings. Wiley Corporate F&A, 7th Edition.
5. Oxelheim, L., Alviniussen, A., Jankensgard, H. (2020). Corporate Foreign Exchange Risk Management.
6. Pacheco, L., Tavares, F., Salazar, V., Vieira, E., Peguinho, C. (2023). Finanças Internacionais – Teoria e Prática. Edições Silabo.
7. R. Brealey, S. Myers, F. Allen and A. Edmans. (2023). Principles of corporate Finance, McGraw Hill, 14º edition.
8. Silva, E.S.; Mota, C.; Queirós, M. e Pereira, A. (2016). Finanças e Gestão de Riscos Internacionais. Vida Económica; 2ª Edição.