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ISCTE-IUL  >  Education  >  LG

Fundamentals of Finance (2 º Sem 2016/2017)

Code: L5025
Acronym: L5025
Level: 1st Cycle
Basic: No
Teaching Language(s): English, Portuguese
Friendly languages:
Be English-friendly or any other language-friendly means that UC is taught in a language but can either of the following conditions:
1. There are support materials in English / other language;
2. There are exercises, tests and exams in English / other language;
3. There is a possibility to present written or oral work in English / other language.
1 6.0 18.0 h/sem 0.0 h/sem 36.0 h/sem 0.0 h/sem 0.0 h/sem 0.0 h/sem 1.0 h/sem 55.0 h/sem 95.0 h/sem 0.0 h/sem 150.0 h/sem
Since year 2015/2016
Pre-requisites None.
Objectives The students, at the end of the present learning unit, must develop competences that allow them, in the conceptual plane, to identify and describe the concepts related with value, valuation, compounding, investment and corporate financial management and analysis, and, in the practical plane, the students must be capable of using the methods and analysis techniques that allow them to operationalize the above concepts in an appropriate form.
Program I - Time Value of Money
1. The concept of interest rate, consumption and saving
2. Nominal and real interest rate
3. Financial intermediation and risk
4. Simple and compounding interest
5. Discounting and compounding factors
6. Periodic/regular flows: rents
7. Applications and financing operations

II - Markets, Instruments and Financial Institutions
1. Foreign exchange market: the currency rate
2. Monetary market: the interest rate
3. Capital markets: primary and secondary markets
4. Financial Institutions
5. Financial information: sources and analysis

III - Financial Analysis
1. Economic and financial flows
2. Income and profitability ratios
3. Financial leverage  
4. Sources and application of funds
5. Working capital
6. Solvency
7. Cash flow analysis

IV - Capital Investments
1. Typology of investments
2. The concept of the project's cash flow map
3. Valuation methodology
4. The discount rate
5. Valuation criteria: NPV, IRR, PI and PAYBACK
Evaluation Method Regular grading system:
- Three mid-term tests (25%, 40%, 35%)
- To be able to attend any of the 3 mid-term tests enrollment is mandatory
- None of the previous moments of evaluation has a minimum grade

Students that fail in the regular grading system have two additional moments to pass: first and second exams, each worth 100% of the final grade.
Teaching Method Each student should acquire analytical, information gathering, written and oral communication skills. Will be used the following learning methodologies (LM):
1. Expositional, to the presentation of theoretical frames
2. Participative, with analysis/resolution of exercises
3. Participative, with analysis/discussion of case studies
4. Active, with the realization of individual and group works
5. Self-study, related with autonomous work by the student
Observations Students that pass in the regular grading system can try to improve their grade only in the second exam. If they prefer to enrol in the first exam they must inform their teacher in writing and they lose the grade they already have.

In any of the evaluation systems (regular or exams) it is considered that a student has course approval if he has a grade equal or above 9.5 points.

The students with a final grade above 14 may have an additional examination; not attending or having a poor performance will produce a final grade of 14.
The students that fall under the "Internal Regulation to the Students with Special Status" ("Regulamento Interno para Estudantes com Estatutos Especiais") must contact the teacher  or the coordinator of the Learning unit, in the first week of classes of each semester, towards the insertion in the learning processes and evaluation in the Learning unit.
Basic Bibliographic Mota, A. G., Barroso, C., Soares, H. e Laureano, L., 2014, "Introdução às Finanças - Fundamentos de Finanças com Casos Práticos Resolvidos e Propostos", Edições Sílabo, 2ª Edição, Lisboa, ISBN 978-972-618-779-0

Mota, A e C. Custódio, "Finanças da Empresa", Booknomics, 7ª edição - 2012.
Complementar Bibliographic Brealey, Richard A. e Myers, Stewart C. 2002. Principles of Corporate Finance, 7ª Edição, McGraw Hill Higher Education

Ross, S., Westerfield R. e B. Jordan 2009. Fundamentals of Corporate Finance Standard Edition, 9ª Edição, McGraw-Hill

Breia, Arménio F., Mata, Mário N. N. S. e Pereira, M. M. Vítor (2014), "Análise Económica e Financeira - Aspetos teóricos e casos práticos", Rei dos Livros, 1ª Edição, ISBN 978-989-8305-61-9.

Santos, L. e R. Laureano, "Fundamentos e aplicações do Cálculo Financeiro, Edições Silabo, 2ª edição, 2006