Investment and Financial Management

The module gives students a comprehensive introduction to the area of business administration from a financial perspective, including financial theory and project valuation. An introductory part presents various economic systems and their respective elements as well as the role of the enterprise in these systems. Using these definitions, various types of enterprises are identified and the related characteristics are presented. The first main part deals with the financing of an enterprise including the elementary aspects (fundamental terms, systematization, problem-solving process), financial planning, financial controlling and the optimization of corporate financing. The second main part comprises methods for project valuation and profitability assessment and a detailed discussion of their advantages and limitations. It gives an introduction to capital market theory and its application to valuation and corporate financing decisions.

At the end of the module, students are able to understand the role of an enterprise in the economic system and the society. Furthermore, the student understands the financial implications and potential liabilities of various types of enterprises. Students can apply various processes and methods of financial planning and financial controlling as well as project valuation methods to problems in corporate finance and everyday investment decisions. More precisely, students are able to understand and implement the following methods: Net Present Value, Internal Rate of Return, Modified Internal Rate of Return, Payback Method. This includes the valuation of equity and debt instruments. Course participants will gain a basic understanding of financial statement analysis (they can calculate both the Free Cash Flow to the Firm and the Free Cash Flow to Equity), corporate financing decisions, and capital market theory (Miller-Modigliani theorem, Capital Asset Pricing Model, the relation between the cost of equity, the cost of debt, i.e. the weighted average cost of capital).

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The module consists of a lecture in which the lecturer provides the students with the necessary knowledge. The slides as well as possible exercises can be downloaded from Moodle.

Additionally, some tutorials are held in which the content of the lecture is applied on text book exercises.

PowerPoint, Moodle, Chalkboard

Kaserer, Christoph (2009); Investition und Finanzierung - case by case; 3rd edition; Verlag Recht und Wirtschaft

At the end of the course there will be an in class closed-book final exam. Due to the fact that the course is held in English, students have to answer the exam questions in English.