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Syllabus

Title
4387 International Financial Management I
Instructors
ao.Univ.Prof. Dr. Manfred Frühwirth
Contact details
  • Type
    PI
  • Weekly hours
    2
  • Language of instruction
    Englisch
Registration
02/12/19 to 02/20/19
Registration via LPIS
Notes to the course
Subject(s) Bachelor Programs
Dates
Day Date Time Room
Tuesday 04/02/19 02:00 PM - 06:00 PM TC.2.02
Tuesday 04/09/19 02:00 PM - 06:00 PM TC.3.01
Tuesday 05/07/19 02:00 PM - 06:00 PM EA.6.026
Tuesday 05/14/19 02:00 PM - 06:00 PM TC.5.01
Tuesday 05/21/19 02:30 PM - 06:30 PM D5.0.002
Tuesday 05/28/19 02:00 PM - 06:00 PM D5.0.002
Tuesday 06/04/19 02:00 PM - 06:00 PM D5.1.001
Wednesday 06/19/19 05:00 PM - 07:00 PM TC.0.10 Audimax

Contents

Introduction and Motivation of the Course Goals
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)

Learning outcomes

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. 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 how to use the EXCEL Solver (with and without constraints) to solve practical problems.

Attendance requirements

For this lecture participation is obligatory. Students are allowed to miss a maximum of 30%.

Teaching/learning method(s)

Based on an explanation of the underlying theoretical concept, small practical problems ("examples") 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. Moreover, the course includes many optional homework exercises, that enable the students to test their knowledge. 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, optional case studies represent more complex situations where knowledge has to be transferred from small examples to a comprehensive real world problem (i.e. the students have to put the pieces together). Enough room will be reserved for enrichment by means of newspaper material, journal articles, software screen shots and so on as well as for class discussions.

Assessment

10 % Mandatory homework exercises A

10 % Mandatory homework exercises B

10 % Mandatory homework exercises C

70 % Final exam (individual work)

Prerequisites for participation and waiting lists

For participants of the Cross-Functional Management Program and WU-incomings only

For questions concerning enrolment and waiting lists please contact the Coordinator of the Cross-Functional Management Programme at cfm@wu.ac.at

All students must attend the first class!


Readings

1 Author: Frühwirth Manfred
Title: International Financial Management I, Part I & Part II

Publisher: erhältlich bei Management Book Service
Edition: WS 2016/17
Year: 2016
Content relevant for class examination: Yes
Recommendation: Essential reading for all students
Type: Script
2 Author: Brealey/Myers/Allen
Title: Principles of Corporate Finance

Publisher: McGraw-Hill
Edition: 8th edition
Remarks: pp. 57–76, 91-93, 146-192, 206-233
Year: 2005
Content relevant for class examination: Yes
Recommendation: Reference literature
Type: Book
3 Author: Bodie/Merton
Title: Finance

Publisher: Prentice-Hall
Edition: preliminary edition
Year: 1998
Content relevant for class examination: Yes
Recommendation: Reference literature
Type: Book
4 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
5 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)

ao.Univ.Prof. Dr. Manfred Frühwirth: manfred.fruehwirth@wu.ac.at

Foradministrative matters and registration please contact cfm@wu.ac.at

Last edited: 2018-10-30



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