Estrategia Financiera (19BBA30013)

General information

Type:	OB	Curs:	3	Period:	S semester
ECTS Credits:	4 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Sec: A	Carmen Ansotegui Olcoz	Economía, Finanzas y Contabilidad	CAT

Group	Teacher	Department	Language
Sec: B	Carmen Ansotegui Olcoz	Economía, Finanzas y Contabilidad	ESP

Group	Teacher	Department	Language
Sec: C	Carmen Ansotegui Olcoz	Economía, Finanzas y Contabilidad	CAT

Core and compulsory courses: Accounting and Financial Analysis, Introduction to Stock Exchanges, Micro and Macro Economics, and Corporate Finance I.

Analysis and appraisal tools used in Financial Mathematics and Analysis courses and their application to corporate finance evaluation models: IRR, DCF and multipliers.

Lectures: 20%
Independent study: 80%

This course aims to frame corporate financial decisions as part of companies' global strategies and market conditions. The Corporate Finance II course strives to go beyond the issue of efficient markets, introducing concepts such as the asymmetry of information, the conflict of interests and irrationality amongst economic agents. These distortions illustrate that prices are not necessarily the result of objective appraisals and analyses.

Participants have studied basic financial instruments in prior courses: accounting, analysis, investment selection, financial planning, financial and corporate appraisal models, etc. The Corporate Finance II course will analyse these as a means to make decisions within firms. We will briefly examine short-term decisions as well as the companies' internal growth and financial implications. The course will focus primarily on long-term financial decisions: capital structure, dividend policy, becoming publicly listed, M&As and the creation of startups. We will use these long-term financial decisions to study the dynamics between companies and financial markets as well as how the asymmetry of information and the conflict of interests condition the creation of value and its sustainability.

The economic-financial setting conditions companies' possibilities. In this course we will also study to what extent the different investor groups (private equity and venture capital firms, hedge funds, etc.) can determine the economic settings and the financial decisions that the companies in which they invest make.

The objective of the Corporate Finance II course is for students to acquire a global and comprehensive view of finance, specifically in terms of corporate strategy and the economic setting. Analysing financial operations requires participants to integrate the knowledge acquired in numerous programme courses: finance, accounting and analysis, markets and corporate finance.

We will study the implications that business structure and organic and inorganic growth have on a company's finances. We will also analyse market operations: buy-backs, dividends, stock increases, going public, etc. The results of these operations depend on technical factors, the relative position of the interveneing parties and their respective and often conflicting interests. Nor can we forget that companies make decisions within a given institutional framework and economic setting. Using case studies to analyse coporporate operations allows us to see financial decisions within the specific corporate and economic context and understand the players involved.

6. Strategic thought, systematic thought

1. Knowledge acquisition, comprehension and structuring

3. Taking decisions / making judgments

2. Application of knowledge to achieve results

1. Financial classification of economic activities Balance sheets and profit and loss accounts according to the business. Representation of the balance sheet in terms of the total net investment and capital used. Analytical foundations: margins and turnover. ROE, operational and financial leverage. Traits of balance sheets and profit and loss accounts by economic activity.

2. Valuation: Dividends and multiples Detailed valuation using the Dividend Discount Model and valuation using multiples

3. Going public. Capital increases and buy-backs

4.

5. Capital structure implementation. From WACC to flexibility Capital structure policy and implementation. Share buy-back. Pros and cons of debt. "Pecking order". What do companies do?

6. Compensating shareholders Ordinary and extraordinary dividends. Share buy-back.

Class sessions include a theoretical component and another dedicated to analyse practical case studies and business situations.
Mandatory readings and group assignments to analyse today¿s economic reality.
Voluntary tutorials for students that need help carrying out the exercises and using the different tools.

ASSESSMENT BREAKDOWN

Short bibliography:
Berk, J.; De Marzo, P. Corporate Finance. Pearson, 2017. RECOMMENDED BOOK, AVAILABLE VIA THE CLASS WEBSITE.

Allen, Franklin; Myers, Stewart; Brealey, Richard. (2006). Principios de Finanzas Corporativas. 8ª ed. Editorial
McGraw-Hill. ISBN: 8448146212 ISBN-13: 9788448146214

Ross, Stephen A.; Westerfield, Randolph W.; Jaffe, Jeffey. Finanzas corporativas. 7a ed. McGraw-Hill, 2005. ISBN: 9701046544 ISBN-13: 9789701046548

Group	Teacher	Department
Sec: A	Carmen Ansotegui Olcoz	Economía, Finanzas y Contabilidad

Group	Teacher	Department
Sec: B	Carmen Ansotegui Olcoz	Economía, Finanzas y Contabilidad

Group	Teacher	Department
Sec: C	Carmen Ansotegui Olcoz	Economía, Finanzas y Contabilidad