COURSE DESCRIPTION BUSINESS FINANCE - 3RD YEAR | 1ST SEMESTER DEGREE: BUSINESS ADMINISTRATION IN-CLASS TEACHING ACADEMIC YEAR: 2020/2021 SCHOOL OF ...

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COURSE DESCRIPTION BUSINESS FINANCE - 3RD YEAR | 1ST SEMESTER DEGREE: BUSINESS ADMINISTRATION IN-CLASS TEACHING ACADEMIC YEAR: 2020/2021 SCHOOL OF ...
COURSE DESCRIPTION
BUSINESS FINANCE
3RD YEAR | 1ST SEMESTER
DEGREE: BUSINESS ADMINISTRATION
IN-CLASS TEACHING
ACADEMIC YEAR: 2020/2021
SCHOOL OF BUSINESS AND ECONOMICS
COURSE DESCRIPTION BUSINESS FINANCE - 3RD YEAR | 1ST SEMESTER DEGREE: BUSINESS ADMINISTRATION IN-CLASS TEACHING ACADEMIC YEAR: 2020/2021 SCHOOL OF ...
Course Description / Academic year 2020-2021

                                1. COURSE IDENTIFICATION
1.- COURSE:

Name: BUSINESS FINANCE

Code: b304-13279

Year (s) course is taught: 3º                   Semester (s) when the course is taught: 1º

Type: Compulsory                                ECTS of the course: 6     Hours ECTS: (30)

Language: English and Spanish                   In-class teaching

Degree (s) in which the course is taught: Business Management

School of Business and Economics

2.- ORGANIZATION OF THE COURSE:

Department: Business Economics

Area of knowledge: Finance and Accounting

                          2. LECTURERS OF THE COURSE
1.-LECTURERS:

 Instructor in charge                  CONTACT DETAILS
 Name                                  RICARDO PALOMO
 Phone (ext):                          914566300-5428
 Email:                                palzur@ceu.es
 Office:                               1.06B

 Instructor in charge                  CONTACT
 Name                                  José Luis Mateu
 Phone (ext):                          5421
 Email:                                matgor@ceu.es
 Office:                               1.07b

 Instructor in charge                  CONTACT
 Name                                  Encina Morales
 Phone (ext):                          1.02b
 Email:                                memorales@ceu.es
 Office:                               5519

 Instructor in charge                  CONTACT
 Name                                  Javier del Arco

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Course Description / Academic year 2020-2021

 Phone (ext):                             1.06b
 Email:                                   Javier.arco@ceu.es
 Office:                                  5519

 Instructor in charge                     CONTACT
 Name                                     Damián RUBIANES CARRASCO
 Phone (ext):                             91-456-63-00 (5387)
 Email:                                   damian.rubianescarra@ceu.es
 Office:                                  1.10 B

Lecturer (s)                          CONTACT
Name:                                 Vicente TENA RODRIGUEZ
Phone (ext):                          91-456-63-00 (5519)
Email:                                tenrod@ceu.es
Office:                               1.02 B

2.- TUTORIALS:

For any queries students can contact lecturers by e-mail, phone or visiting their office during the
teacher’s tutorial times published on the students’ Virtual Campus.

                               3.COURSE DESCRIPTION

The course contained in this guide can be considered basic or primary because chronologically it is
often established as the first specific subject of finance. The financial calculus developed in this
subject and the concepts and operation of corporate finance are essential for progress in further
study of corporate finance.
It contains basic concepts such as capitalization and discount operations, calculation of yields and
the cost of financial sources of the company. It is an essential course for the development of other
subjects such as financial management and financial instruments.

                                           4. SKILLS
1.- SKILLS

   Code        Basic and General Skills

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Course Description / Academic year 2020-2021

  BS1        Students should have demonstrated that they have gained knowledge of and understand an
             area of study at a level beyond secondary education that, even though based on advanced
             text books, it also includes aspects that are acquired from knowledge deriving from the state-
             of-the-art of the field of study.

  BS2        Students should know how to apply their knowledge to their work or vocation in a
             professional manner and should have the skills that are usually demonstrated by compiling
             and defending arguments and resolving problems within their area of study.

  BS3        Students should have the capacity to collect and interpret relevant data (usually within their
             area of study) to form opinions based on reflection on relevant topics of a social, scientific or
             ethical nature.
  GS1        Capacity for analytical and critical thinking

   Code       Specific Skills
  SS2        Capacity to identify, formulate and resolve problems, applying professional criteria and
             understanding the competitive and institutional position of the organization, identifying its
             strengths and weaknesses.
  SS4        Capacity of critical analysis in quantitative and qualitative terms, including data analysis,
             interpretation and extrapolation to a given business reality.

2.- LEARNING OUTCOMES:

Code      Learning outcomes
RA1       Identify the characteristics of a financial transaction
RA2       Quantify both the financial cost of the financial sources and the cost of capital in the
          company

                                5. EDUCATIONAL ACTIVITIES
1.- DISTRIBUTION OF STUDENTS` ASSIGNMENT:

Total hours of the course                                                                6ECTS X 30 = 180

Code      Name                                                                          On-campus hours
EA2       SEMINAR                                                                                 51
EA3       PRACTICAL WORKSHOP                                                                       4
EA4       PRACTICE                                                                                 4
TOTAL Hours                                                                                       59

Code       Name                                                                            Not on-campus
                                                                                                hours
EA0        Independent work                                                                      121

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Course Description / Academic year 2020-2021

Educational                                                 DEFINITION
Activity
Independent Work          Educational activity whereby students independently manage their own
 (EA0)                    learning by the study of the course material.
Seminar                   Educational activity focused especially on the competence of the students to
(EA2)                     develop the learning skills enabling them to assimilate content acquired
                          beforehand, while relating economic concepts and those of similar and/or
                          auxiliary disciplines and different theoretical and methodological approaches.
                          Students study each subject in depth to a large extent independently. This
                          educational activity is also centered on encouraging students to acquire the
                          skills necessary to communicate their conclusions – and the understanding
                          and underlying reasons supporting them – to both the specialist and non-
                          specialist public clearly and unequivocally. Priority is given to the participation
                          of students and their sharing of the reasoned interpretation of knowledge and
                          the sources of their fields of study, all of which is coordinated by the
                          professor.
Practical Workshop        Educational activity focused especially on the competence of the students to
(EA3)                     use specific methodologies for resolving problems of a practical nature
                          encountered by economists in their most applied aspects and/or the
                          information technology tools relevant to each subject. Priority is placed on
                          students undertaking practical activities focused on data manipulation and
                          selection of quantitative and/or qualitative information for purposes of
                          extracting/drawing relevant conclusions.
Practice                  Educational activity focused especially on the competence of the students to
(EA4)                     collect, manipulate and process relevant data and variables for economic,
                          statistical, financial, accounting and tax analyses. Priority is placed on
                          students undertaking activities that involve the application of theoretical
                          and/or technical knowledge acquired, which may be done individually or in a
                          group, depending on the subject and the skills to be acquired.

                               6. ASSESMENT OF LEARNING

1.- CLASS ATTENDANCE:

    •      In order to be eligible for examination by continuous assessment students must attend at
           least 75% of scheduled class time (attendance sheets will be used). As students may be
           absent 25% of the classes, no attenuating circumstances will be accepted for absences.

    •      Students that may not meet the minimum percentage of assistance of the course must
           have justified reason to do son and it has to be notified to the lecturer at the beginning of
           the course. In this case, the lecturer will establish an adequate planning for the student to
           pass the course. If this communication is not done in due time and manner, will be
           evaluated on the same criteria as the ones attending to class.

2.- ASSESMENT SYSTEM AND CRITERIA:

ASSESMENT CRITERIA

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Course Description / Academic year 2020-2021

Code     Name                                                                             Percentage
AS4      Written or computer-based examination on exercises, problems, cases,                  50%
         and so forth.
AS9      Submission of exercises.                                                              30%
AS3      Written examination on reasoning questions.                                           20%

 ORDINARY EVALUATION:

 Continued evaluation includes:
         •    Tests and practical cases (20%): Specific tests of evaluation of the knowledge
              acquired by the student throughout the course, which may be specified in short
              questions about the theory taught and/or exercises or practical cases that can be
              done manually or using spreadsheets
          • Workshop and Assignments (30%): It includes the participation of the students
              through readings, elaboration and presentation of practical cases, with Excel
              computer simulations, APPs or Bloomberg.
          • Final Exam (50%): consists of a written examination of theoretical-practical questions,
              which may be analysis and development of cases, or even test type with the contents
              discussed in class and officially included in the program.
 In order to pass the subject, the student has
          • to obtain at least 4,5 points (in sum) in the final exam and
          • to obtain, at least, 5 points by summing all tests.

 Once the calendar of activities or in-class tests (exams, practices, exercises, assignments,
 presentations, etc.) has been set up in advance, in order to guarantee equality of conditions for all
 students, these tests will not be repeated for the students that they did not attend classes, except
 causes of force majeure.
 EXTRAORDINARY EVALUATION

         •   Any student, who does not pass the Ordinary Evaluation, has to sit the final exam in
             the Extraordinary Evaluation that will include the totality of the content of this subject.
         •   The exam can include questions about any of the work realized throughout the
             course.

 The final exam consists of a written exam of theoretical and practical questions, and a number of
 case studies.

                                  7. COURSE SYLLABUS
1.- COURSE SYLLABUS:

THEORETICAL:

   CHAPTER 1: BUSINESS FINANCE AND FINANCIAL CALCULUS
   Financial economics. Significance and contents.
   Financial function in the company
   Financial goals in the company and value creation.
   Financial decisions in the company: investment, funding and liquidity

   CHAPTER 2: FINANCIAL CALCULUS: THE TIME VALUE OF MONEY.
   Time value of money: Cash flows and their timing
   Interest rates: simple interest, compound interest and continuous compound interest.
   The financial standards and rules of capitalization and discount.

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Course Description / Academic year 2020-2021

   • Simple capitalization
   • Compound capitalization
   • Simple discount rates
   • Compound discount rates
   • Commercial discount rates
   • Capitalization factor and discount factor
   Financial calculator and Excel sheet case

   CHAPTER 3: PROFITABILITY OF THE FINANCIAL TRANSACTIONS
   Annual percentage rate of charge (APR) and Effective Interest Rate (EFF) in fractionated
   capitalization periods
   • EFF calculus
   • Casuistry in the EFF and APR calculus
   Estimating financial transactions return
   Nominal Return and Real Return with inflation
   Time-Weighted Rate of Return
   Internal Rate of Return
   External Rate of Return. Application to the yield curve
   Financial calculator and Excel sheet case

   CHAPTER 4: ANNUITIES
   Immediate annuities
   • Temporary variable annuities, in arrears and in advance.
   • Temporary level annuities and level perpetuities, in arrears and in advance.
   • Temporary variable annuities and variable perpetuities, geometric progression.
   Annuities in arrears deferred and Annuity-due deferred
   Fractional annuities
   Financial calculator and Excel sheet case

   CHAPTER 5: APPLICATION OF ANNUITIES TO THE WEIGHTED AVERAGE COST OF
   CAPITAL (WACC)
   Classification of financial sources for companies
   Financial calculus of own resources
   • Funding by own resources
   • The cost of own resources (common equity)
   Financial calculus of external resources
   • Funding by external resources
   • The cost of external resources (bonds and loans)
   • Methods of loans amortization
   The calculus of Weighted Average Cost of Capital

   CHAPTER 6: FINANCIAL STRUCTURE AND OTHER TYPES OF BUSINESS FINANCE
   Short-term company financing
   Additional means and hybrid financing
   Financial gearing: relationship among performance, risk and financial structure
   Optimal company financial structure
   Dividend policy and cost

                          8. RECOMMENDED READING
1.- BASIC BIBLIOGRAPHY:

BREALEY, R.A.; MYERS, S.C. (2001): Fundamentals of Corporate Finance (6th edition), McGraw-
Hill, Madrid.
CAMPOLIETI, G.; MAKAROV, R.N. (2014): Financial Mathematics: A Comprehensive Treatment.
Taylor and Francis Group.
ETHERIDGE, A. (2012): A course in financial calculus. Cambridge University Press.
GARRET, S.J. (2013): An introduction to the Mathematics of Finance. A deterministic Approach.
Elsevier
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Course Description / Academic year 2020-2021

HASTINGS, K. J. (2015): Introduction to Financial Mathematics. Taylor and Francis Group.
JOSHI, M.S. (2008): The Concepts and Practice of Mathematical Finance (2nd edition). Cambridge
University Press
PALOMO, R.; ITURRIOZ, J.; MATEU, J.L. (Coord.). (2017): Casos prácticos de finanzas y mercados
financieros / Exercises in Finance and Financial Markets, CEU Ediciones, Madrid.
VERNIMMEN, P.; QUIRY, P.; DALLOCCIO, M.; LE FUR, Y.; SALVI, A. (2005); Corporate Finance:
Theory and Practice, John Wiley & Sons
WATSON, D.; HEAD, A. (2006): Corporate Finance: Principles and Practice (4th Edition), Financial
Times/ Prentice Hall

2.- ADDITIONAL BIBLIOGRAPHY:

SPANISH:
ALEGRE, A. (1998): Curso interactivo de Matemáticas Financieras. Ed. McGraw-Hill.
AYRES, F (2002): Matemáticas Financieras. Ed. McGraw-Hill.
BACHILLER, A.; LAFUENTE, A.; SALAS, V. (1987): Gestión económico-financiera del circulante,
Pirámide, Madrid.
BESLEY, S.; BRIGHAM; E.F. (2001): Fundamentos de administración financiera (12ª Ed.), McGraw-
Hill/Interamericana de España, Madrid.
BODIE, Z.; MERTON, R. (1999): Finanzas, Prentice Hall, México.
BREALEY, R.A.; MYERS, S.; MARCUS, A.J. (2007): Fundamentos de finanzas corporativas,
Mc.Graw-Hill, (Revisión técnica y traducción: Palomo, R.; Iturrioz, J.; Mateu, J.L, Martín, S.), Madrid.
BRUN, X.; ELVIRA, O. y PUIG, X. (2008): Matemática Financiera y Estadística Básica. Ed. Profit.
GIL PELÁEZ, L., y otros (1987): Matemática de las Operaciones Financieras: Problemas resueltos.
Ed. AC. Madrid.
CABALLERO FERNÁNDEZ, R.; Co.: GONZÁLEZ PAREJA, A.C.; CALDERÓN MONTERO, S.; REY
BORREGO, M.L. (2000): Matemáticas aplicadas a la economía y a la empresa. Ed. Pirámide.
CAMACHO PEÑALOSA, E.; Co.: GÓMEZ DOMÍNGUEZ, D.; HINOJOSA RAMOS, M.A.; RUBIALES
CABALLERO, V.; VÁZQUEZ CUETO, M.J. (1997): Problemas de Matemáticas Financieras. Ed.
Pirámide.
CÓRDOBA BUENO, M. (1996): Análisis financiero de los mercados monetarios y de valores. Ed.
AC. Madrid.
CRUZ RAMBAND, S.; VALLS MARTÍNEZ, M.C. (2003): Introducción a las Matemáticas Financieras.
Ed. Pirámide.
DE PABLO, A. (1990): Análisis práctico de decisiones de inversión y financiación en la empresa, Ariel,
Barcelona.
FANJUL, J.L.; ALMOGUERA, A.; GONZÁLEZ, Mª.C. (2001): Análisis de las operaciones financieras,
Civitas, Madrid.
FERNÁNDEZ, A.I. (Dir.) (1994): Introducción a las finanzas, Cívitas, Madrid.
FERRUZ, L.; SARTO, J. (1995): Casos resueltos de dirección financiera, Gestión 2000, Barcelona.
GARCÍA BOZA, J.; Co.: DÉNIZ TADEO, A.; JORDÁN SALES, L.; CÁCERES APOLINANIO, R.M;
MAROTO SANTANA, O. (2002): Problemas resueltos de matemática de las operaciones
financieras. Ed. Pirámide.
GARCIA-GUTIERREZ, C.; MASCAREÑAS, J.; PEREZ GOROSTEGUI, E.(1989): Casos prácticos
de inversión y financiación en la empresa, Pirámide, Madrid.
ISABEL DOPACIO, C. (Coord.) (2010): Dirección y gestión financiera de la empresa: casos
prácticos, CEU Ediciones, Madrid.
ISABEL, C, ; PALOMO R, ITURRIOZ J, (2005): Práctica de finanzas empresariales, Gabinete de
Analistas Económico-Financieros, Madrid.
JIMENO MORENO, J.P. (2004): Los mercados financieros y sus matemáticas. Ed. Ariel.
KEOWN, A.; PETTY, W.; SCOTT, D.; MARTÍN, J. (1999): Introducción a las finanzas. La práctica y la
lógica de la dirección financiera, (2ª Ed.), Prentice-Hall, Madrid.
LEVENFELD (1997): Matemáticas de las operaciones financieras y de la inversión. Ed. McGraw-Hill.
MARÍN, J.M.; RUBIO, G. (2001): Economía Financiera, Antoni Bosch Editor, Barcelona.
MASCAREÑAS, J.; LEJARRIAGA, G. (1992): Análisis de proyectos de inversión, Eudema, Madrid.
                                                                                                         8
Course Description / Academic year 2020-2021

MASCAREÑAS, J.; LEJARRIAGA, G. (1993): Análisis de la estructura de capital de la empresa,
Eudema Universidad, Madrid.
PALOMO, R.; MATEU, J.L. (2004): Productos financieros y operaciones de inversión, Instituto
Superior de Técnicas y Prácticas Bancarias, Madrid.
PETR ZIMA; Co.: ROBERT, L. (2005): Matemáticas Financieras. 2ª Edición. Ed. McGraw-Hill.
POL SANTANDREU (2002): Matemática Financiera. Ed. Gestión 2000.
SUAREZ, A.S. (2000): Decisiones óptimas de inversión y financiación en la empresa, Pirámide,
Madrid.
VALLEJO, B.; SOLÓRZANO, M. (2013): Gestión patrimonial y banca privada. Manual del asesor
financiero, Pirámide, Madrid
VÁZQUEZ CUETO, M.J. (1993): Curso de Matemática Financiera. Ed. Pirámide.
VERCASSON, A.; Co.: SKRHAK, B. (2001): Principios Básicos de Matemáticas Financieras. Ed.
Gestión 2000.
VILLALOBOS PÉREZ, J.L. (2006): Matemáticas Financieras. Ed. Prentice Hall.
WILMOTT, P.; Co.: HOWISON, S.; DEWYNNE, JEFF; HOWSON, S. (1995): The Mathematics of
Financial Derivatives: A Student Introduction. Ed. Cambridge University Press.

ENGLISH:
WATSON, D.; HEAD, A. (2006): Corporate Finance: Principles and Practice (4th Edition), Financial
Times/ Prentice Hall
BREALEY, R.A.; MYERS, S.C. (2007): Principles of Corporate Finance (5th edition), McGraw-Hill.
MEGGINSON, W. (2008): Introduction to Corporate Finance, Thomson Learning.
BROWN, K. (2008): Investment Analysis and Portfolio Management (International Edition), South
Western College.
HULL, J.: Options, Futures, and Other Derivatives, Prentice Hall Series in Finance

3.- WEB RESOURCES:

www.bde.es
www.economist.com/markets
www.finance.yahoo.com
www.infomercados.com
www.edufinet.es
www.dialnet.es
www.finanzas.com
www.iberfinanzas.com
www.ahe.es

                        9. ATTITUDE IN THE CLASSROOM
1.- REGULATIONS

   Any irregular act of academic integrity (no reference to cited sources, plagiarism of work or
   inappropriate use of prohibited information during examinations) or signing the attendance
   sheet for fellow students not present in class will result in the student not being eligible for
   continuous assessment and possibly being penalized according to the University regulations.
   The student must show the right attitude in the classroom in accordance with the rules of the
   Faculty and the University. This implies attending regularly and on time, as well as having a
   participatory attitude in the classroom, doing the work or exercises required.
   The teaching unit will also decide in each case, the penalty applies to those students who are
   expelled from the classroom.

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Course Description / Academic year 2020-2021

                       10. EXCEPTIONAL MEASURES

Should an exceptional situation occur which prevents continuing with face-to-face teaching
under the conditions previously established to this end, the University will take appropriate
decisions and adopt the necessary measures to guarantee the acquisition of skills and
attainment of learning outcomes as established in this Course Unit Guide. This will be done in
accordance with the teaching coordination mechanisms included in the Internal Quality
Assurance System of each degree.

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