Corporate Finance II

This subject pursues the following objectives:
- Understanding the role of finance and finance department in the process of corporate risk management.
- Conducting an analysis of the risks affecting the company.
- Knowing the products available to the company to carry out a policy of risk management.
- Analyzing the risk of business operations.
- Quantifying the exchange and interest rate risks and design hedging strategies.
- Understanding the fundamentals of the companies that operate internationally.
- Making a diagnosis of the company in crisis and developing a feasibility plan through a financial simulation models.
With this aim the subject is structured in 5 units. In the first, risk measurement and modelling is addressed in a generic way. Then in unit 2 instruments and techniques of financial risk management, including derivatives, are analyzed. Then we move into the analysis of different financial risks, in particular default risk, interest rate risk and exchange rate risk and the processes of crisis and reorganization are also addressed with a focus on the development of the viability plan.

UNIT 1: CORPORATE RISK
UNIT 2: PRODUCTS FOR CORPORATE RISK MANAGEMENT
UNIT 3: DEFAULT RISK MANAGEMENT
UNIT 4: INTEREST RATE RISK MANAGEMENT
UNIT 5: CORPORATE INTERNATIONAL FINANCE AND EXCHANGE RATE RISK MANAGEMENT

FINANCIAL RISK
Day, A. (2012): Mastering Financial Modeling, Pearson.
Durán y Otero (2010): Análisis financiero dinámico, Cuadernos de la Fundación Mapfre
Holden, C. (2012): Excel Modeling in Corporate Finance, Pearson.
Jackson y Staunton (2005): Advanced Modelling in finance using excel and VBA , Wiley.
Jorion (2009): Financial Risk Manager Handbook, Wiley.
Mun, J. (2008): Modeling Risk, Wiley
Ferruz, Portillo y Sarto (2009): Dirección financiera del riesgo de interés, Pirámide
Fernández y Partal (2010): Gestión y control del riesgo de crédito en la Banca, Ed. Delta.
Charnes (2007): Financial modeling with Crystal Ball and Excel. Wiley
Scott (2010): Building financial models with Microsoft Excel : a guide for business professionals, Wiley.

DERIVATIVES
Castellanos E. (2012) Opciones y futuros sobre renta variable: manual práctico. Editorial BME.
Díez de Castro y Mascareñas (1994) ” Ingeniería Financiera”
Fabozzi, F (2001): Handbook of fixed income securities, McGraw Hill Profesional
Hull,J (2009): Mercados de futuros y opciones, Pearson-Prentice Hall.
Knop, R (2003): Derivados de crédito, Ediciones Pirámide.
Knop, R (2006): Manual de instrumentos derivados, EFA.
Lamothe,P et al. (2006) “Opciones financieras y productos estructurados”, (1994) “Swaps y otros derivados OTC”
Martín Marín y Trujillo Ponce (2004) “ Manual de Mercados Financieros”
Martínez Abascal y Guasch (2004): Gestión de carteras de renta fija, McGraw-Hill Profesional


CREDIT RISK

Fabozzi, F (2001): Handbook of fixed income securities, McGraw Hill Profesional
HULL,J (2004) Opciones y futuros.Mc Graw Hill
JORION, P. (2009); Financial Risk Manager Handbook, 5th Edition, Wiley (Finance),
Knop, R (2003): Derivados de crédito, Ediciones Pirámide.
Lamothe,P et al. (2006) “Opciones financieras y productos estructurados”, McGraw Hill
Lando, D. (2004), Credit Risk Modeling: Theory and Applications, Princeton University Press.
Loffler and Posch (2007): Credit risk modeling using excel and VBA, John Wiley&Sons
Martínez Abascal y Guasch (2004): Gestión de carteras de renta fija, McGraw-Hill Profesional
Saunders, A. and Allen, L. (2002), Credit Risk Measurement: New Approaches to Value at Risk and Other Paradigms, 2nd edition, Wiley.
Tomás et al. (2008): Cómo analizan las entidades financieras a sus clientes, Gestión2000.
Garrido, V. (2012): Modificaciones estructurales y reestructuración empresarial, Dykinson.

INTEREST RATE
HULL,J (2010): Introducción a los mercados de futuros y opciones, Pearson Prentice Hall
JORION, P (2010): Financial Risk Management Handbook, Wiley.
Fabozzi, F (2001): Handbook of fixed income securities, McGraw Hill Profesional.
Knop, R et al. (2006): Instrumentos de renta fija, Ariel
Martínez Abascal y Guasch (2004): Gestión de carteras de renta fija, McGraw-Hill Profesional
Knop et al. (2008): Activos de renta fija. Pirámide.

EXCHANGE RATE
Eiteman et al. (2010): Las finanzas de las empresas multinacionales, Ed. Pearson
Eun y Resnik (2007): Gestión financiera internacional, Mc Graw Hill
Madura, J (2003): International financial management, Thomson
Martín Marín, J.L. (2006): Finanzas Internacionales, Ed Thompson
Shapiro (2009) Multinational Financial Management, John Wiley.

Basic and general competencies of the degree to which the subject contributes:
-CG03- Ability to apply the knowledge acquired to business reality.
-CG04- Ability to solve problems in new or unfamiliar environments.
-CG06 - Ability to communicate information, ideas, business management problems -of a generic or specific nature- and
Solution proposals
-CG07- Ability to design integrated management projects or functional areas of the company.
-CG08- Mastery of various tools, instruments and management methods necessary to run a company.
-CG09- Ability to identify, gather and interpret relevant data on issues related to business management.
-CB7 - That students know how to apply the knowledge acquired and their ability to solve problems in new or little-known environments within broader (or multidisciplinary) contexts related to their area of ​​study
-CB9 - That students know how to communicate their conclusions and the knowledge and ultimate reasons that support them to specialized and non-specialized audiences in a clear and unambiguous way
-CB10 - That students possess the learning skills that allow them to continue studying in a way that will be largely self-directed or autonomous.

- Transversal capabilities:
CT-03 analysis and synthesis ability,
CT-04 planning and organization,
CT-06 ability to integrate and work in teams of diverse composition.

Learning outcomes:
-Know the role of finance and the finance department in the company's value creation process.
-Know how to carry out an analysis of the risks that affect the company and the risk of commercial operations.
-Know how to measure market and interest rate risk and know how to manage exchange risk.
-Know the products available to the company to carry out a risk management policy and the fundamentals of companies that operate internationally.
-Know how to make a diagnosis of the company in crisis and develop a viability plan through a financial simulation model.

As it is a Master's subject, it is especially important that students perceive the applicability of its contents. The development of the theoretical contents will be accompanied by multiple examples and the resolution of practical cases, the resolution of which will be done individually and/or in small work groups. In this way, a better understanding on the part of the students and greater motivation will be achieved, a consequence of their involvement in the learning process. An important part of the subject will be taught in the computer room, which will allow better monitoring of the students' progress, as well as the development of new abilities and skills. Likewise, the review of bibliographic sources will be encouraged to help students have a more comprehensive vision and favor deepening the topics that may be of most interest.
Students will receive support from the USC virtual campus through the subject's virtual classroom, in which the periodic programming of classes and the corresponding support material will be offered, both for expository and interactive sessions.

At the first opportunity, two alternative evaluation systems are planned, both for students taking the subject for the first time and for repeating students:
- A continuous evaluation system, in which over the course of the semester students will develop various evaluation activities that will allow them to pass the subject without having to take a final exam. Three types of evaluation activities are included in this system:
o Theoretical-practical tests in test format: two tests will be carried out throughout the course, during the usual class hours, covering all the contents of the subject. They will account for 30% of the final grade.
o Spreadsheet test: a test will be carried out during class time to evaluate skill in using the spreadsheet for the analysis of international financial management decisions. It will account for 50% of the final grade.
o Works related to the content of the different topics that make up the program or others of relevance in the field of the subject, for which a delivery deadline will be set. They will contribute 20% of the final grade.
- A single evaluation system, consisting of a final theoretical-practical exam on the established official date, which will account for 100% of the final grade, reserved for those students who, for reasons included in Instruction No. 1/2017, of the General Secretariat of the USC, on exemption from class attendance in certain circumstances (illness, work, harassment...) request and obtain exemption from class attendance, as well as for those who do not pass under the continuous evaluation system.
In the second opportunity, the evaluation is only contemplated through the completion of a final exam. In any of the modalities it will be necessary to obtain a grade equal to or greater than 5 to pass the subject.
In cases of fraudulent completion of exercises or tests, the provisions of the Regulations for evaluating the academic performance of students and reviewing grades will apply.
Competence evaluation: the alternative activities integrated into the evaluation system contribute in different ways and with different intensity to the acquisition of all the competencies mentioned in the competencies section.
In the theoretical-practical tests the following are evaluated: CT3, CT4, CG03, CG04, CG08, CG09, CB7, CB10.
In the spreadsheet test, the following are evaluated: CT6, CG03, CG04, CG06, CG07, CG08, CG09, CB7, CB9, CB10.

PERSONAL WORK IN THE CLASSROOM
Group classroom classes: 10 hours
Group seminar classes: 22 hours
Tutorials in a very small group: 8 hours
Classroom evaluation: 5 hours
TOTAL IN-PERSON WORK IN THE CLASSROOM: 45 HOURS

PERSONAL STUDENT WORK
Independent study, individual or group: 27.5 hours
Writing exercises, conclusions or other works: 10 hours
Recommended readings, activities in the library or similar: 20 hours
Preparation of oral presentations, debates or similar: 10 hours
TOTAL HOURS OF STUDENT'S PERSONAL WORK: 67.5

Basic knowledge of finances is required. Class attendance is considered essential as a way to understand and assimilate the content of the subject. With respect to the hours of non-face-to-face dedication, it is estimated that the student who has attended class must dedicate time to reviewing what has been seen in class and to apply and consolidate knowledge through problem solving, as well as delve deeper into the subject through Bibliographic review. With constant work throughout the semester, preparation for the final exam should not involve an excessive number of hours of study.
In addition, students are recommended to make use of the tutorial hours to resolve doubts or clarify concepts. On the other hand, taking into account the fundamental role that work on the spreadsheet plays in this subject, it is advisable that the student who does not move with ease in this field try to improve his handling both with his personal effort and by making use of tutoring hours.