COURSE DESCRIPTION BUSINESS FINANCE - 3RD YEAR | 1ST SEMESTER DEGREE: BUSINESS ADMINISTRATION IN-CLASS TEACHING ACADEMIC YEAR: 2019/2020 SCHOOL OF ...
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COURSE DESCRIPTION BUSINESS FINANCE 3RD YEAR | 1ST SEMESTER DEGREE: BUSINESS ADMINISTRATION IN-CLASS TEACHING ACADEMIC YEAR: 2019/2020 SCHOOL OF BUSINESS AND ECONOMICS
Course Description / Academic year 2019-2020
1. COURSE IDENTIFICATION
1.- COURSE:
Name: BUSINESS FINANCE
Code: b304
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 DATOS DE CONTACTO
Name José Luis Mateu
Phone (ext): 5421
Email: matgor@ceu.es
Office: 1.07b
Instructor in charge DATOS DE CONTACTO
Name Encina Morales
Phone (ext): 1.02b
Email: memorales@ceu.es
Office: 5519
Instructor in charge DATOS DE CONTACTO
Name Javier del Arco
2Course Description / Academic year 2019-2020
Phone (ext): 1.06b
Email: Javier.arco@ceu.es
Office: 5519
Instructor in charge DATOS DE CONTACTO
Name Damián RUBIANES CARRASCO
Phone (ext): 91-456-63-00 (5387)
Email: damian.rubianescarra@ceu.es
Office: 1.10 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
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.
3Course Description / Academic year 2019-2020
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
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.
4Course Description / Academic year 2019-2020
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
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%
5Course Description / Academic year 2019-2020
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.
• Simple capitalization
• Compound capitalization
• Simple discount rates
• Compound discount rates
• Commercial discount rates
• Capitalization factor and discount factor
Financial calculator and Excel sheet case
6Course Description / Academic year 2019-2020
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
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
7Course Description / Academic year 2019-2020
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.
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,
8Course Description / Academic year 2019-2020
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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