The course Financial Management: Investments is a core subject taught in the first semester of the fourth year of the Degree in Business Administration.

Previously, the students have taken the course Business Economics: Introduction, which introduces the financial area and the work of the financial management of a company.

They have taken the course Mathematics of Financial Operations, which introduces the basic concepts of financial mathematics, a tool that will be helpful.

They have also taken the course Financial Management: Financing. It addresses the decisions made by the business managers about obtaining financial resources, and the criteria to be used. It shows the characteristics of the financing alternatives (cost elements, maturity, enforceability, origin, etc.) that will allow decide which funding source is more appropriate for the financial structure of a company.

Financial Management: Investments shows the investment selection process, explains the most relevant issues for the financial evaluation of investments, develops the criteria that are employed to decide upon their acceptance, and provides some guidelines on short-term investment issues.

COMPETENCIES/DESCRIPTION/OBJECTIVES (ENGLISH)

• Analysis and evaluation of the financial balance scheduled for an investment project or the company as a whole.

• Analysis of economic and financial problems associated with the choice among alternatives of corporate investment.

• Identification of sources of financial information for decision-making on selection of investment projects.

• Evaluation and selection of business investment projects according to the situation and needs of a company, considering financial criteria.

• Development of evaluation reports on the financial viability of investment projects, with appropriate terminology.

• Analysis and evaluation of short-term financial consequences of investment/financing decisions by the company.

SPECIFIC COMPETENCIES

• Analyze and evaluate, according to professional standards, the financial balance scheduled for an investment project or the company as a whole (CE1).

• Analyze the economic and financial problems associated with the choice among corporate investment alternatives (CE2).

• Identify sources of financial information for decision-making on investment projects selection (CE3).

• Evaluate and select business investment projects according to the situation and needs of a company, considering financial criteria (CE4).

• Issue reports evaluating the financial viability of investment projects, with appropriate terminology (CE5).

• Analyze and evaluate short-term financial consequences of investment / financing decisions by the company (CE6).

Contents:

1º) Financial planning

2º) The investment process in the company

3º) Investment decisions under certainty

4º) Investment decisions under risk

Detailed schedule

Chapter 1. Goals and Governance of the Firm

Part One: Financial Planning and Working Capital Management

Chapter 2. Financial Analysis

Chapter 3. Financial Planning

Chapter 4. Working Capital Management

Part Two: Value

Chapter 5. How to Calculate Present Values

Chapter 6. Net Present Value and Other Investment Criteria

Chapter 7. Making Investment Decisions with the Net Present Value Rule

Part Two: Risk

Chapter 8. Introduction to Risk and Return

Chapter 9. Portfolio Theory and the Capital Asset Pricing Model

Chapter 10. Risk and the Cost of Capital

Chapter 11. Project Analysis



At the beginning of the semester, a detailed schedule of the different topics will be provided to students (through the web), according to the school calendar adopted by the Board of the Centre. Also, at the beginning of each topic, detailed material and a collection of exercises will be provided to students (through the web), to be worked along the theme.

IN PRINCIPLE, TEACHING WILL TAKE PLACE FACE-TO-FACE IN THE CLASSROOM. NONETHELESS, IF THE GROUP SIZE DOES NOT ALLOW ALL OF THE STUDENTS TO ATTEND THE CLASS THEN TEACHING WILL TURN BIMODAL (Blackboard Collaborate). IN CASE LEGAL IMPERATIVES OR SAFETY REASONS BAN FACE-TO-FACE INTERACTION THEN TEACHING WILL BE EXCLUSIVELY ONLINE.

A mixture of teaching methodologies is scheduled:

LECTURE CLASS. It refers to the teaching method in which there are no splits, and thus corresponds to large groups. Here the methodologies raised will be:

o Theoretical classes. The basic concepts alongside tools and techniques that students must meet to achieve the objectives proposed knowledge will be presented.

o Practical classes. For each of the topics, the student will have available a series of exercises, which will be solved in class by the teacher.

CLASSROOM PRACTICE. It refers to the teaching method applicable in small groups, in which the following methodological approaches can be performed:

o Exercises to be solved by the group. For each topic, a series of exercises will be proposed to be developed and discussed during class time, by the students, in groups, who will finally present their resolution and the criteria adopted in it.

o Computer lab. A series of exercises will be proposed to be solved by means of specific software.

SEMINARS. It refers to the teaching method applicable in small groups to allow greater interaction between teacher and student, and the following methodological approach may be performed: or method or case analysis. For the application of the concepts to different business realities, along the course will raise the analysis of specific cases or scenarios, in which they will implement the concepts developed throughout the course. The work will be supervised by the teacher, resolution and presentation will take place in a group:

o Method or case analysis. For the application of the concepts to different business realities, specific cases or scenarios will be analyzed along the course, which will implement the concepts developed throughout the course. The work will be supervised by the teacher, while the resolution and presentation will take place at the group level.

OUT-OF-CLASSROOM WORK. In addition to class hours, the student will be provided materials to complete her/his training; she/he can be guided during tutorial hours. Specifically, students will receive exercises that must be worked by them outside school hours.

• Final Assessment System
• Tools and qualification percentages:
  • Portfolio (%): 100

IN FIRST CALL

OPTION A: MIXED GRADING

The assessment will be based on exams and a voluntary work report.

• Exams (midterm and final)

There will be a midterm qualifying exam. If this test is overcome, the final exam will be held on the rest of the subject matter. The grading of examinations will be calculated using a weighted average, in which the partial exam score will count 25%. If the midterm exam is not passed, the final examination is performed on all the material taught in the course. In both cases, the grade ranges from 0 to 10 points, and the grade obtained is the so-called test grade.

• Work report

Students may voluntarily develop a work report; its maximum value over the final grade is 2 points. It is to be delivered at a date announced at the beginning of the course, and always before the final exam.

If you have performed work, the final grade is calculated by adding the grade of the work report to that of the examination, provided the latter exceeds 3.5 points. If this minimum threshold is not reached, the test grade will be kept as such, without any possibility to add the grade of the work report. Should the grades of the exam and the work sum to more than 10, the grade of the work will be weighted by the ratio (10-test grade)/(work grade); the resulting figure will then be added to the test grade.

For students who have not done work report, the grade for the course will be that of the examination.

If a student has undertaken the activities of mixed grading (midterm exam and / or work report), but does not take the final exam, he/she will be considered as "not shown up"; this does not account as a failed call.

OPTION B: EXAM

The grade will be based exclusively on an examination.

The test will cover the whole subject matter. The grade will range between 0 and 10 points.

Grading will consist in an examination.

The test will cover the whole subject matter. The grade will range between 0 and 10 points.

In case a work report was filed in the first call, but the student failed to pass the exam, the same report will be considered for the second call, unless an upgraded version or new report is surrendered. In this case, the final grade is computed as explained in Option A under first call.

If a student has undertaken the activities of mixed grading (midterm exam and / or work report), but does not take the exam in second call, he/she will be considered as "not shown up".

BREALEY R.A., MYERS S.C. & ALLEN, F. (2013): Principles of corporate finance. 11th ed., McGraw Hill, Boston.

Basic bibliography

CRUNDWELL, F. K. (2008): Finance for engineers: evaluation and funding of capital projects.

Springer-Verlag, London.

LUENBERGER, D. G. (2009): Investment science. Oxford University Press, New York.

ROSS S.A., WESTERFIELD R.F. & JAFFEE J. (2012): Corporate Finance. 10th ed. McGraw Hill,

New York.

In-depth bibliography

COPELAND T. & ANTIKAROV V. (2003): Real options. A practitioner’s guide. Texere, New York.
EHRHARDT, M.C. &. BRIGHAM E. F. (2008): Corporate finance. A focused approach. 3rd ed. Thomson. New Jersey.
HILLIER D., GRINBLATT M. & TITMAN S. (2011): Financial markets and corporate strategy. Second European edition. McGraw Hill.

Journals

Harvard Business Review
Journal of Applied Corporate Finance

Web addresses

European Central Bank: http://www.ecb.int
Bank of Spain: http://www.bde.es/bde/en
http://www.investmentscience.com/