Corporate Investment Appraisal (1 º Sem 2013/2014)
Program
1. Preliminaries:
- Game Theory ? fundamental concepts;
- Financial Options ? basic concepts and pricing.
2. Capital Budgeting:
- Free Cash Flow;
- Criteria: Payback Period, NPV, IRR, Modified IRR, Profitability Index;
- Special Cases: Inflation, Different Lives;
- Robustness: Sensitivity Analysis, Scenario Analysis, Break-even Analysis.
3. Capital Structure:
- Debt and its cost;
- Equity and its cost;
- Modigliani-Miller (1958);
- Corporate taxes;
- Personal taxes;
- Costs of Financial Distress;
- Agency Costs and benefits of debt;
- Trade-off theory;
- Pecking order theory.
4. Valuation:
- WACC method;
- APV method;
- FTE method;
- Special Financing policies.
5. Warrants and Convertibles:
- Warrants and Rights Issues;
- Convertible Bonds Issues.
6. Risky Debt:
- Merton?s model;
- Anderson and Sundareson?s strategic debt service.
7. Payout Policy:
- Paying Out versus Retaining Earnings;
- Cash Dividends versus Stock Repurchases.
- Game Theory ? fundamental concepts;
- Financial Options ? basic concepts and pricing.
2. Capital Budgeting:
- Free Cash Flow;
- Criteria: Payback Period, NPV, IRR, Modified IRR, Profitability Index;
- Special Cases: Inflation, Different Lives;
- Robustness: Sensitivity Analysis, Scenario Analysis, Break-even Analysis.
3. Capital Structure:
- Debt and its cost;
- Equity and its cost;
- Modigliani-Miller (1958);
- Corporate taxes;
- Personal taxes;
- Costs of Financial Distress;
- Agency Costs and benefits of debt;
- Trade-off theory;
- Pecking order theory.
4. Valuation:
- WACC method;
- APV method;
- FTE method;
- Special Financing policies.
5. Warrants and Convertibles:
- Warrants and Rights Issues;
- Convertible Bonds Issues.
6. Risky Debt:
- Merton?s model;
- Anderson and Sundareson?s strategic debt service.
7. Payout Policy:
- Paying Out versus Retaining Earnings;
- Cash Dividends versus Stock Repurchases.