Learn@WU : Courses : International Financial Management I : Syllabus

Syllabus
Title 0554 International Financial Management I Instructors ao.Univ.Prof. Dr. Manfred Frhwirth Contact details manfred.fruehwirth@wu.ac.at Type PI Weekly hours 2 Language of instruction Englisch On this page: Contact details Contents Learning outcomes Teaching/learning method(s) Assessment Availability of lecturer(s) Readings Unit details

Registration 09/17/13 to 09/30/13 Registration via LPIS Notes to the course Subject(s) Bachelor Programs International Financial Management I Dates Day Date

Wednesday 10/09/13 02:00 PM - 06:00 PM TC.5.03 Wednesday 10/16/13 02:00 PM - 06:00 PM TC.5.03 Wednesday 10/23/13 02:00 PM - 06:00 PM TC.5.03 Wednesday 10/30/13 02:00 PM - 06:00 PM TC.5.03 Wednesday 11/06/13 02:00 PM - 06:00 PM TC.5.03 Wednesday 11/06/13 04:00 PM - 06:00 PM TC.2.02 Ernst & Young Wednesday 11/13/13 02:00 PM - 06:00 PM TC.5.03 Wednesday 11/20/13 02:00 PM - 06:00 PM TC.5.03 Thursday 12/05/13 04:00 PM - 06:00 PM TC.0.10 Audimax

Contents Introduction and Motivation of the Course Goals

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Basic Concepts (Cost of Capital, Valuation and Valuation Shortcuts, YTM of Bonds, EXCEL Solver, Basic Concepts of Uncertainty) Expected Portfolio Return and Portfolio Risk Implementation in Practice (Scenario-based implementation, Implementation based on historical data) Market Risk, Unique Risk and Diversification Beta Efficient Portfolios Portfolio Management without Risk-Free Borrowing/Lending Portfolio Management with Risk-Free Borrowing/Lending Sharpe Ratio Capital Asset Pricing Model (CAPM) - Deriving the Cost of Capital from a Risk-Return Relationship (Capital Market Line, Security Market Line, Implementation in Practice) Capital Structure and Cost of Capital Weighted Average Cost of Capital Use of Cost of Capital (Stock Valuation, Capital Budgeting, Business Valuation)) Case Study "Cost of Capital" Case Study "Capital Budgeting"

Learning outcomes

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This course intends to give you an understanding in portfolio management. Especially the diversification principle and the separation between market risk and unique risk shall be internalised. On this basis, you will be made familiar with the CAPM which in good practice is used to derive the cost of capital, acting as a discount rate in stock valuation, capital budgeting or modern business valuation. You will be provided with important concepts both for personal and for corporate application (e.g. strategies for mutual funds). Special emphasis is put on the practical implementation and application of the concepts. Techniques will be developed to solve practical financial problems. You will learn to use the EXCEL Solver (with and without constraints) to solve practical problems.

Teaching/learning method(s)

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Based on an explanation of the underlying theoretical concept, small practical problems ("examples") and a case study based on a real-world problem are solved. When useful, examples are interpreted from an economic point of view. At the end of each lecture day, mandatory homework exercises will be announced to be handed in at the beginning of the next lecture day. Some of the examples and exercises are linked in a case study like manner to provide more insight into existing cross links. To further link knowledge acquired in the individual examples, the case study represents a more complex situation where knowledge has to be

transferred from small examples to a comprehensive real world problem (i.e. put the pieces together). Enough room will be reserved for enrichment by means of newspaper material, journal articles, software screen shots and so on (to cover current developments) as well as for class discussions.

Assessment Mandatory Homework Exercises Mandatory Case Study Final Test

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Readings 1 Author: Brealey/Myers/Allen Title: Principles of Corporate Finance Publisher: McGraw-Hill Edition: 8th edition Remarks: pp. 5776, 91-93, 146-192, 206-233 Year: 2005 Content relevant for class examination: Yes Recommendation: Reference literature Type: Book Author: Bodie/Merton Title: Finance Publisher: Prentice-Hall Edition: preliminary edition Year: 1998 Content relevant for class examination: Yes Recommendation: Reference literature Type: Book Author: Berk/DeMarzo Title: Corporate Finance Publisher: Pearson Edition: 1. international edition Year: 2007 Content relevant for class examination: Yes Recommendation: Reference literature Type: Book

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Author: Gitman Title: Principles of Managerial Finance Edition: 11th edition Year: 2006 Content relevant for class examination: Yes Recommendation: Reference literature Type: Book

Availability of lecturer(s) during/after the lectures office hours by email (manfred.fruehwirth@wu.ac.at)

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Last edited: 2013-06-06