Name: FINANCIAL MANAGEMENT
Code: 510203003
Type: Compulsory
ECTS: 4.5
Length of subject: Per term
Semester and course: 3rd Year - First term
Speciality:
Language: English
Mode of study: On-site class
Lecturer data: MATÉ SÁNCHEZ-VAL, MARÍA LUZ
Knowledge area: Economía Financiera y Contabilidad
Department: Economía, Contabilidad y Finanzas
Telephone: 868071134 - 968325319
Email: mluz.mate@upct.es
Office hours and location:
martes - 09:00 / 10:00
EDIFICIO CIM - FCCE, planta 1, Despacho 1.41
miércoles - 10:00 / 11:00
EDIFICIO CIM - ETSAE, planta 1, Despacho 1.41
Tutorials will be carried out by request of the student sending an email to mluz.mate@upct.es
Qualifications/Degrees:
Academic rank in UPCT: Catedrática de Universidad
Number of five-year periods: 3
Number of six-year periods: 3 de investigación
Curriculum Vitae: Full Profile
Responsible for the groups: G1, G2
The course introduces the fundamental principles of corporate financial management from the perspective of decision-making under risk and uncertainty. The first part of the course focuses on Modern Portfolio Theory, examining the relationship between risk and return, diversification strategies, the efficient frontier, and the market portfolio. It also introduces the main models used to assess risk and determine the cost of capital, with particular emphasis on the Capital Asset Pricing Model (CAPM) and its application in estimating the rate of return required by investors. The second part of the course explores the concept of the firm's cost of capital and its role in value creation and financial decision-making. Different sources of corporate financing are analysed, together with the cost of equity, the cost of debt, and the calculation of the Weighted Average Cost of Capital (WACC). Finally, the course addresses corporate financial planning as a key tool for strategic decision-making. Topics include financial forecasting, the preparation of short- and long-term financial plans, the estimation of financing needs, and the use of the cost of capital as a criterion for investment appraisal and the design of financial strategies aimed at promoting business growth and long-term sustainability.
DIDACTIC UNIT 1. PORTFOLIO THEORY AND COST OF CAPITAL
Unit 1. Risk, Return and the Opportunity Cost of Capital
* Financial objectives of the firm.
* Risk and return.
* Opportunity cost of capital.
* Financial markets and resource allocation.
Unit 2. Modern Portfolio Theory
* Expected return.
* Risk and diversification.
* Covariance and correlation.
* Efficient frontier.
* Market portfolio.
Unit 3. Asset Pricing and Cost of Capital
* Systematic and idiosyncratic risk.
* Beta coefficient.
* Capital Asset Pricing Model (CAPM).
* Cost of equity.
* Weighted Average Cost of Capital (WACC).
* Applications in financial decision-making.
DIDACTIC UNIT 2. FINANCIAL PLANNING
Unit 4. Financial Planning and Capital Budgeting
The financial planning process.
Pro forma financial statements.
Financing requirements.
Capital budgeting.
Financial project evaluation.
Value creation and financial sustainability.
Practical Session 1. Risk and Return Analysis
Calculation and analysis of expected returns, risk measures, and risk-return relationships using financial data and spreadsheet software.
Practical Session 2. Portfolio Diversification and the Efficient Frontier
Construction and evaluation of investment portfolios. Analysis of diversification effects, covariance, correlation, and the efficient frontier.
Practical Session 3. CAPM and Cost of Equity Estimation
Estimation of beta coefficients and required rates of return using the Capital Asset Pricing Model (CAPM).
Practical Session 4. Cost of Capital and Financial Planning
Calculation of the Weighted Average Cost of Capital (WACC) and its application to financial planning and investment decision-making.
Practical Session 5. Capital Budgeting and Financial Project Evaluation
Preparation of pro forma financial statements, estimation of financing requirements, and evaluation of investment projects under different scenarios.
Promoting the continuous improvement of working and study conditions of the entire university community is one the basic principles and goals of the Universidad Politécnica de Cartagena. Such commitment to prevention and the responsibilities arising from it concern all realms of the university: governing bodies, management team, teaching and research staff, administrative and service staff and students. The UPCT Service of Occupational Hazards (Servicio de Prevención de Riesgos Laborales de la UPCT) has published a "Risk Prevention Manual for new students" (Manual de acogida al estudiante en materia de prevención de riesgos), which may be downloaded from the e-learning platform ("Aula Virtual") under the "Act in an Emergency" section, "Technical Guides" tab, with instructions and recommendations on how to act properly, from the point of view of prevention (safety, ergonomics, etc.), when developing any type of activity at the University. You will also find, in the "Act in an Emergency", sectionrecommendations on how to proceed in an emergency or if an incident occurs. Particularly when carrying out training practices in laboratories, workshops or field work, you must follow all your teacher's instructions, because he/she is the person responsible for your safety and health during practice performance. Feel free to ask any questions you may have and do not put your safety or that of your classmates at risk.
Class in conventional classroom: theory, problems, case studies, seminars, etc
Lectures and problem-solving sessions focused on risk and return analysis, portfolio theory, asset pricing, cost of capital estimation, and financial planning. Students will analyse financial cases and solve practical exercises to develop decision-making skills in corporate finance
42
100
Continuous assessment activities during class hours.
Continuous assessment activities carried out during scheduled class sessions. These activities may include quizzes, practical exercises, portfolio analysis tasks, financial planning exercises, and case-study discussions designed to assess the achievement of the course learning outcomes.
3
100
Final and ongoing assessment activities outside class hours.
Assessment activities aimed at evaluating the acquisition of theoretical and practical knowledge related to portfolio theory, cost of capital, and financial planning. These activities may include written examinations, practical exercises, and the recovery of previously assessed learning outcomes.
3
100
Tutorials
Individual and group tutorials intended to support student learning, clarify theoretical concepts, solve practical questions, and provide guidance on assessment activities and course assignments.
2
50
Student work: study or individual or group work
Independent study and completion of practical assignments, including the analysis of financial information, problem-solving activities, spreadsheet-based exercises, reading of course materials, and preparation for assessment activities.
62.5
0
Spoken or written exams
Final written examination covering all course contents. The examination may include multiple-choice questions, short theoretical questions, and numerical exercises related to portfolio theory, asset pricing, cost of capital, and financial planning. This activity assesses the learning outcomes associated with all course units and allows students to recover or improve previously assessed learning outcomes. A minimum mark of 4 out of 10 is required for this activity to be considered passed. If the activity is repeated, the most favourable mark obtained by the student will be retained.
75 %
Participation and involvement in the teaching-learning process
Individual written practical exercise conducted during the teaching period and covering Units 1 and 2 of the course. The activity will consist of solving numerical problems related to risk, return, diversification, covariance, correlation, and portfolio selection. This activity assesses the learning outcomes associated with portfolio theory and provides the basis for the corresponding recovery activity in the final assessment period. A minimum mark of 4 out of 10 is required for this activity to be considered passed. If the activity is repeated, the most favourable mark obtained by the student will be retained.
20 %
Presentation and defence of assignments
Individual practical financial exercise carried out during class time
5 %
Students will receive continuous feedback during lectures, problem-solving sessions, and practical activities. Model solutions and assessment criteria will be discussed in class to support the achievement of the learning outcomes.
The 20% written practical exercise and the 5% practical financial activity are continuous assessment activities carried out during the teaching period.
In the ordinary and extraordinary assessment periods, students who have not passed, completed, or who wish to improve their marks in these activities may undertake equivalent recovery activities with the same weighting (20% and 5%, respectively) and assessing the same learning outcomes.
The final written examination maintains a weighting of 75%.
Students may recover only those assessment activities not previously passed or may repeat passed activities to improve their marks. The assessment system allows students to obtain up to 100% of the final grade in both the ordinary and extraordinary assessment periods.
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