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Advanced Corporate Finance

Academic Year: Fall 2015


Instructors: Guilherme Almeida e Brito, Jrg Stahl
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Course Description:
Advanced Corporate Finance deals with the main strategic financial decisions of firm: investment
decisions, financing decisions and dividend distribution. The course main focus is the theory and the
practice associated with the financing decisions of firms.
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Course Objectives:
At the end of the course you should be able to:
Understand and value the firms financing decisions.
Understand why different firms make different financing decisions.
Understand the relationship between capital structure and the cost of capital.
Estimate and discuss the cost of capital for firms and for projects.
Understand the alternatives and drivers of the firms payout policy.
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Teaching and Learning Methods:
This is a demanding quantitative course. You are expected to acquire a clear understanding of
corporate finance concepts and great familiarity with corporate finance methods. To get there, we will
take a hands-on approach. It is our belief that the best way to learn is by doing. Thus, we will have
several exercises and cases/projects throughout the term, to make sure the main points are well
understood.
The course requires careful reading of the textbook and extensive time for exercises and case
preparation. Please do so every week and your experience will be greatly enhanced.
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Grading:
Midterm Exam: 40%, Final Exam: 40%, Written Assignments + Class Participation: 20%
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Bibliography:
Required textbook: Berk & DeMarzo, Corporate Finance (BDM).
You may also use an alternative textbook: Brealey, Myers & Allen, Principles of Corporate Finance
(BMA) or Ross, Westerfield and Jaffe, Corporate Finance.
These are the leading textbooks in Corporate Finance, used in most of the MSc or MBA courses in
Corporate Finance around the world. We highly recommend that you obtain/use one of these books. It
will be useful for your entire life! You do not need to use the most recent edition, previous editions are
also acceptable.
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Biography:
Guilherme Almeida e Brito has a Ph. D. in Finance from New York University, an MBA from New York
University, and a degree in Business Administration from Universidade Catlica Portuguesa. He is Vice
Dean at Catlica-Lisbon School of Business and Economics. He has had several roles at CatlicaLisbon as Associate Dean, including MBA Academic Director and MSc Academic Director. He received
the Lisbon MBA Part-Time Best Professor Award in 2012 and 2014. His principal areas of interest
include capital budgeting, cost of capital, agency theory, capital structure and optimal security design.
Jrg Stahl receives his PhD in Economics from Universitat Pompeu Fabra, Barcelona. He holds a MSc
in Economics from Universitat Pompeu Fabra and a Master in Business Administration from University
St. Gallen, Switzerland. He is assistant professor at the Catlica-Lisbon School of Business and
Economics. His principal areas of interest are in corporate finance with a particular focus on the
interaction of the corporate field and the political environment.
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Course Content:
Subject

Mandatory reading

Introduction. Financial Leverage

BDM chap. 12

Capital Structure: Perfect Markets

BDM chap. 14

Capital Structure: Taxes and Financial Distress;

BDM chap. 15, 16

Asymmetric Information
4

Cost of Capital

BDM chap. 12, 18

Project and Firm Valuation: APV, WACC.

BDM chap. 18, 19

Corporate Financing: Overview and Empirical

BMA chap. 14

Evidence
7

Raising Equity

BDM chap. 23

Debt Financing

BDM chap. 24

Leasing

BDM chap. 25

10 Payout Policy

BDM chap. 17

MRSyllabus_E0211.v1

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Contact(s) and Office hours:
Guilherme Almeida e Brito: gbrito@ucp.pt; office hours: Wednesdays at 18:30.
Jrg Stahl: jstahl@ucp.pt office hours: Wednesdays at 18:30.
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MRSyllabus_E0211.v1

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