Financial Analysis and Management

When teaching company valuation, special attention must be paid to students who do not have knowledge of Financial Calculation and Financial Management.

The curricular unit is a theoretical-practical subject, where, in addition to the transmission of knowledge, there is space for debate and critical reflection on the empirical evidence revealed in previous research (in this case when the themes are capital structure or distribution of results) or on the acquisition operations that are taking place mainly in the national space as is the case of companies this year: Cerealis; EFACEC

This course aims to provide students with the study of a set of complementary topics of subjects traditionally addressed in UC’s of Business Finance at the 1st cycle level. Specifically, the following topics will be addressed, theoretically and practically: a) valuation of companies and businesses; b) the capital structure policy; d) the dividend policy.

1. 1.   CAPITAL STRUCTURE

1.1. Capital Structure Irrelevance: Modigliani-Miller;

1.2. Capital Structure with Taxes;

1.3. “Trade-off” models (static and dynamic);

1.4. The “Pecking Order Theory”;

1.5. Agency costs and capital structure.

1. 2.      DIVIDEND POLICY

2.1.                      The Problem of Dividend Irrelevance;

2.2.                      Alternative Theories of Dividend Policy;

2.3.                      Determining factors of dividend policy.

1. EVALUATION OF COMPANIES AND BUSINESSES
   3.1. Valuation through discounted cash flow models;
   3.2. particular cases;
   3.3. Limitations;
   3.4. Valuation through market multiples models;
   3.5. Limitations.

The evaluation will be carried out using one of the following methodologies

a) Conducting a final exam, being approved the students who obtain a classification equal to or greater than 10 values.

b) Mixed assessment, consisting of the completion of a final exam and the completion of a written work (groups of 3 or 4 students), with the exam having a weighting of 60% and the works a weighting of 40%. Students may opt: (i) for a more theoretical work on “Capital Structure” or “Dividends”; (ii) or by a second workr on “Company Valuation”. Also in this case, students who obtain a classification equal to or greater than 10 values will be approved.

NOTE: This assessment regime requires students to attend at least 80% of classes.

NAO