Investment and Financial Management

Module WI000219

This Module is offered by Chair of Financial Management and Capital Markets (Prof. Kaserer).

This module handbook serves to describe contents, learning outcome, methods and examination type as well as linking to current dates for courses and module examination in the respective sections.

Basic Information

WI000219 is a semester module in German language at Bachelor’s level which is offered in winter semester.

This Module is included in the following catalogues within the study programs in physics.

  • Catalogue of soft-skill courses
Total workloadContact hoursCredits (ECTS)
180 h 60 h 6 CP

Content, Learning Outcome and Preconditions

Content

One part of the module (Investment and Financial Management) 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. The financial mathematics part introduces basic concepts of mathematics in finanace. It starts with an overview of simple interest, compounded interest and continuous interest calculation. The second basic concept taught in the course is present value calculation with finite and infinite duration as well as with constant or arithemtically and geometrically growing rents. Following this basic introduction, several applications of the present value calculation are explained. After amortization calculation is briefly discussed, several lessons are used to study the valuation of bonds. First, students learn how to compute the market value of coupon and zero-coupon bonds. Then, yield-to-maturity calculation is introduced and the risks inherent in fixed income instruments are discussed. The session closes with the determination of a single bond's and a bond portfolio's duration. Finally, the present value principle is applied to the valuation of stocks using the dividend-discount model with varying growth assumptions. The chapter also gives an overview on multiple valuation of stocks and compares the two valuation approaches. The financial mathematics part closes with an introduction to financial option valuation. After a basis introduction to financial options and their payout structure is given, the Binomial and Black-Scholes valuation procedure are explained using several examples.

Learning Outcome

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). Additionally, students can apply the basic methods in financial mathematics.

Preconditions

Basic knowledge in WI000617 "accounting" recommendable

Courses, Learning and Teaching Methods and Literature

Courses and Schedule

ArtSWSTitelDozent(en)Termine
VO 2 Investitions- und Finanzmanagement (WI000219) Dienstag, 13:15–14:45
sowie einzelne oder verschobene Termine
UE 2 Übung Finanzmathematik (WI000219) Mittwoch, 11:30–13:00
sowie einzelne oder verschobene Termine

Learning and Teaching Methods

The module consists of two lectures in which the lecturers provide the students with the necessary knowledge. The slides as well as possible exercises can be downloaded from Moodle. Additionally, a tutorial is held in which the content of the lecture Investment and Financial Management is applied on text book exercises.

Media

PowerPoint, Moodle, Chalkboard, Text Book

Literature

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

Module Exam

Description of exams and course work

The grading is based on a written exam. The written exam consists of multiple choice questions and open questions. It is a closed-book exam. Students can use a calculator (non programmable) and the equation and calculation collection connected to the course.

Exam Repetition

There is a possibility to take the exam in the following semester.

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