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The essence of discounted cash flow valuation is simple; the asset is worth the expected cash flows it will generate, discounted to the reference date for the valuation exercise (normally, the day of the calculation). A survey article was written in Parker (1968), where it was stated that the earliest interest rate tables (use to discount value to the present) dated back to 1340. Works from Boulding (1935) and Keynes (1936) derived the IRR (Internal Rate of Return) for an investment. Samuelson (1937) compared the IRR and NPV (Net Present Value) approaches, arguing that rational investors should maximize NPV and not IRR. The previously mentioned works and the publication of Joel Dean’s reference book (Dean, 1951) on capital budgeting set the basis for the widespread use of the discounted cash flow approach into all business areas, aided by developments in portfolio theory. Nowadays, probably the model with more widespread use is the FCFE/FCFF (Free Cash Flow to Equity and Free Cash Flow to Firm) model. For simplification purposes, we will focus on the FCFE model, which basically is the FCF model’s version for the potential dividends. The focus is to value the business based on its dividends (potential or real), and thus care must be taken in order not to double count cash flows (this matter was treated in this case) and to assess what use is given to that excess cash flow – if it is invested wisely, what returns will come of them, how it is accounted for, etc. (Damodaran, 2006). The bridge to the FCFF model is straightforward; the FCFF includes FCFE and added cash that is owed to debtholders. References: Parker, R.H. (1968). “Discounted Cash Flow in Historical Perspective”, Journal of Accounting Research, v6, pp58-71. Boulding, K.E. (1935). “The Theory of a Single Investment”, Quarterly Journal of Economics, v49, pp479-494. Keynes, J. M. (1936). “The General Theory of Employment”, Macmillan, London. Samuelson, P. (1937). “Some Aspects of the Pure Theory of Capital”, Quarterly Journal of Economics, v51, pp. 469–496. Dean, Joel. (1951). “Capital Budgeting”, Columbia University Press, New York. Damodaran, A. (2006). “Damodaran on Valuation”, Second Edition, John Wiley and Sons, New York.

All information is taken from public sources and with consented company interviews.

Opportunities for value creation may be found in awkward and difficult circumstances. Good strategic thinking and ability to act swiftly are usually crucial to be able to take advantage of such tough environments. Amidst a country-wide economic crisis and general disbelief, José de Mello Group (JMG) saw one of its main assets’ (Brisa Highways) market value tumble down to unforeseen figures and was forced to act on it. Brisa’s main partners were eager in overpowering JMG’s control of the company, and outside pressure from Deutsche Bank was rising, due to the use of Brisa’s shares as collateral. JMG would have to revise its strategy and see if Brisa was worth fighting for; the market implicit assessment about the company’s prospects was very penalizing, but JMG’s predictions on Brisa’s future performance indicated that this could be an investment opportunity. Would it be wise to bet against the market?

This study is excellent for finance and strategy courses, at both undergraduate and graduate levels. Company valuation and corporate strategy are required.

The purpose of this paper is to construct a numerical model for the numerical analysis of the hydraulic transient profile in Trabalhador channel for filling and emptying maneuvers and to determine the water level in time. Model results support operational managers in the decision-making process.

Physical data were provided for the construction and calibration of the numerical model. The equations of Saint-Venant were approximated by a finite difference scheme and the numerical model was written in Fortran. The results of filling and emptying of the channel simulations were compared with the measured water levels.

Measured water levels and those simulated by the numerical model have shown good correlation. The time recorded for the filling and emptying of the canal was also close between the measured and simulated data. The simulation design flow pointed to inundation in the channel banks. Simulation water levels were slightly higher than those measured.

In this model, the combination of canals and pressure conduits was not considered.

The findings confirm the measured time for filling and emptying of the canal, as well as inundation of canal banks for the maximum design flow. These results help in the management process.

This paper presents a numerical model for hydraulic transient analysis in channels with good agreement with the field data.

Focusing on the study of tacit knowledge sharing in nonprofit organizations (NPOs) in Portugal and taking as a case study the Portuguese voluntary firefighters, this study aims to identify the most relevant factors for sharing tacit knowledge and identify the types of barriers most prevalent to such sharing in these organizations.

A literature review on tacit knowledge sharing allowed the identification of indicators and barriers to the sharing of this knowledge. This was followed by a mixed methodology that combines qualitative and quantitative techniques through questionnaires and interviews, whose treatment allowed to determine the indicators that influence each of these factors and which types of barriers.

Three factors have been identified that lead to the sharing of tacit knowledge within these organizations: organizational culture, individual characteristics and organizational structure. Four typologies of barriers were identified: communicational, technological, personal and resource or infrastructure.

The present research focuses exclusively on the sharing of tacit knowledge, not considering other forms of knowledge. As a case study, although with heterogeneous organizations, the same cannot be replicated to different realities.

The investigation of the main factors and the main types of barriers that arise to the sharing of tacit knowledge in these organizations may serve as a basis for the creation of diagnostic and intervention tools.

Studies in this area targeting NPOs are scarce, as opposed to what is happening in the private and public sectors. The option of a case study of organizations such as the Portuguese fire brigades, unique in their action and identity, accompanies the need increasingly recognized by society, in enabling these organizations of competencies for the best possible performance, in the face of tragic events that have occurred in recent years in Portugal.

The purpose of this paper is regarding the execution of business processes by Business Process Management Systems (BPMS), during design-time modelers have to specify the potential performers of a work activity according to their organizational position or role. Once several workers may share the same role, at run-time all of them (indistinctively) can be assigned by BPMS to execute a work activity. However, distinct individuals have different personality traits and, for certain instances of work (requiring, for example, specific soft skills) some of them might perform better. A new approach to work distribution in business processes supported by BPMS, which takes into account the psychological characteristics of workers was proposed.

As stated in Section 3 of the paper, in this work the Design Science Research (DSR) methodology, as proposed by Kuechler and Vaishnavi (2008) was used. All the five steps, from the “Awareness of problem” to the “Conclusion” were accomplished, being described in the paper.

It is demonstrated that, by using the proposed approach, BPMS might deliver work to people in a more effective way, by selecting those workers that seem to be more suitable to accomplish each particular piece of work, taking into account the characteristics of the work itself and the specific profiles of the workers eligible to execute it.

BPMSs are responsible for the execution of business process models, by delivering work activities to suitable agents (human or artificial), which execute them. Addressing a gap in the BPM literature, this paper presents a new approach for improving work distribution in business processes supported by BPMS, enabling to assign (in run-time) the most suitable workers to perform specific work activities, grounded on the concept of psychological profile and taking into account technical, human and social aspects.

Although the literature shows that ethical leadership reduces the risk of burnout, research still lacks a comprehensive understanding of the mediating effects between ethical leadership and burnout. As media reports on working conditions in the academic context often tie the problem of unethical leadership practices to illegitimate tasks, this study focuses on illegitimate tasks as a mediator between ethical leadership and burnout.

The research model is tested using structural equation modeling and data from 1,053 doctoral and postdoctoral students in randomly selected German state universities.

The results significantly support all hypothesized effects, showing direct correlations between (1) ethical leadership and illegitimate tasks, (2) ethical leadership and burnout facets and (3) illegitimate tasks and burnout facets. The relationship between ethical leadership and burnout is thus partially mediated by illegitimate tasks.

The authors recommend three major fields of action for practice. These fields comprise (1) the leadership situation, (2) the leader and (3) the follower.

The presented model is the first that connects the relationship between ethical leadership and burnout with illegitimate tasks and looks at ethical leadership from a stress-as-offense-to-self (SOS) perspective.

This study has used public sources, interview with one of the case protagonists.

This business case portrays the problems that an energy producing company faced in Portugal, in its transition from being a public company to becoming privatized. The Portuguese Government issued EDP with generous subsidies to guarantee its future profits and privatization success, but a few years later, after EDP was fully privatized, there was great political pressure to downsize such subsidies. The case describes the main steps taken by EDP from its creation and privatization, culminating at the end of 2017, where it was heavily criticized by media and political parties due to a high value of subsidies that had been granted to the company by the Portuguese Government in the past, while it was still a public company, and the renegotiation of those same subsidies after it had been privatized. EDP’s President António Mexia was under police investigation due to having led the renegotiation talks in 2007, and it was feared that EDP’s investors could refrain from investing in the company. Should EDP campaign to clear its good name, or would it be better to let the matter fall with the passing of time? Could the share value be affected? Should EDP prepare itself for loss of revenue due to an eventual downsizing of the subsidies?

This study covers energy sector, privatization issues and government support. The relevance of this study is good for use in Business Schools and MBA courses.

Analysis of public sources.

The bank named “Novo Banco” (New Bank in Portuguese) was created because of an emergency intervention by the Bank of Portugal to save the “good” assets of the once great but bankrupt Banco Espírito Santo (BES) on August 4, 2014. The toxic assets remained in BES (dubbed “bad bank”). BES was one of the biggest private banks in Portugal, with origins mounting back to the year 1869. In 2013, it was headed by the founder’s great-grandson, Ricardo Salgado, when an external audit revealed several problems with the bank’s accounting and concluded that BES had a severe financial problem (the risky credit represented 11.1% of the bank’s accounts). The bank underwent a public capital increase (endorsed by several public figures, including the Portuguese President at the time, Cavaco Silva) of €1.045m to reposition itself, which was 100% successful (demand of about 160%, with a significant part of foreign investors). However, continued amounts of suspicions led Ricardo Salgado to be replaced by Vitor Bento (via a settlement between BES’s shareholders and the Bank of Portugal) in July 2014. At the end of that same month, BES announced imparities totaling the amount of €4.2535m. This led the European Central Bank to suspend BES’s access to the financial operations, forcing it to reimburse its credit to the Eurosystem in the value of €10.000m. In two days, the stock prices dropped by 80% to around €0.03 per share. It was later proven that the administration led by Ricardo Salgado had disobeyed the Bank of Portugal 21 times between December 2013 and July 2014, apparently acting against the institution’s best interests. Some carousel schemes with companies within the Espirito Santo Group were also detected in BES’ financial movements to improve the bank’s financial statements.

Finance Valuation, Strategy

This paper analyzes the effect of the banking market (concentration and competition) on financial development.

In order to estimate the effects of banking concentration and competition on financial development, we conducted an empirical analysis using the System Generalized Method of Moments (S-GMM) through a dynamic panel data model.

The main results suggest that concentration and competition affect financial development. In particular, an increase in bank concentration may inhibit the country's financial development, due to the lack of competition. Our results do not confirm the controversy between concentration and competition, suggesting that concerning financial development, concentration is the reverse of competition.

The results of this study add a new perspective on banking market power: a financial system concentrated or uncompetitive constrains financial development.

The literature that combines the investigation of the effects of banking market structure (concentration) and banking market conduct (competition) on financial development is scarce. Although a concentrated banking sector can reduce competition through barriers to new entrants (which could expand financial services offer), it is also true that a concentrated banking sector can be competitive. In order to avoid the controversy, our paper chooses to look into a comprehensive approach considering independent measures of bank concentration and bank competition, which together refer to the banking framework.

The purpose of this paper is to analyze the financial friction effect of non-performing loans (NPLs) on financial intermediation (FI) through empirical evidence from the Brazilian experience.

The authors develop a new variable, financial intermediation flow and a new indicator, FI, both measures of FI. To empirically test FI, the authors use a dynamic panel data framework that draws on 101 banks (December 2000 to December 2015).

An increase in NPL reduces FI. Thus, NPL amplifies financial friction in FI. This result holds in different time frames, such as the pre-crisis period, the crisis period and the post-crisis period.

The FI measure developed in this study offers the policymakers a possibility to monitor financial stability.

This study adds to this debate by proposing a measure of FI derived from financial flows. This measure allows one to estimate the role of NPL as a financial friction that can pose a threat to financial stability.

There is a great interest in developing eco-friendly operations as alternative uses of resources in the university campus, making the employment of technologies more sustainable. Practices such as energy management and efficiency initiatives have been encouraged to meet these sustainability goals. The purpose of this paper is to describe and discuss the main features of the GENIIOT project, a system of energy management using Internet of Things applied in a Brazilian university campus to support energy education practices and to promote lasting energy efficiency measures. The focus of the study is directed at the energy consumption of the air-conditioning system, which is responsible for 40% of the total electricity consumption. In addition, this project also scrutinizes processes such as the building occupants’ comfort demands, lighting levels and energy waste control.

A case study at the Unicamp campus was conducted to illustrate the design procedures through qualitative description. This study comprises an overview of the physical plant, hardware and software development, energy data monitoring, management process and energy education.

The GENIIOT project enables energy efficiency actions by concerning the use of air-conditioning equipment based on monitored data, different types of monitored rooms, user’s behaviors and their feedback. This initiative requires the engagement, awareness and actions from users combined with investment in energy efficiency to achieve an efficient use of this type of equipment. The proposed approach can be applied in the future to similar situations, inside the Unicamp campus and at other university campuses. In addition, this project can contribute to building efficiency analysis by using the hardware structure developed to monitor facilities and carry out evaluations, providing valuable information for strategic initiatives in energy efficiency projects and research and development programs based on practical experience and promoting a discussion about sustainability aspects in the context of the university campus for energy efficiency.

The GENIIOT project is aligned with some of the sustainable development goals, among which sustainability and responsible consumption are identified. Considering the sustainability issues, the economic dimension can be evaluated through a cost–benefit analysis of energy efficiency projects with prudent investment, while the social attractiveness of the project is ensured by education and awareness practices for the community that interacts with the system and learns about a more efficient way of using resources in the campus. Furthermore, there is a more conscious use of natural resources by minimizing waste from the use of electricity and reducing carbon dioxide emissions. GENIIOT is part of Sustainable Campus Project, a living laboratory which aims at developing energy-efficiency-related research activities in the university campus to reduce costs in higher and federal institutions of education in Brazil.