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Finances (Corporate Finance, Financial Risk Management)

Module name (EN): Finances (Corporate Finance, Financial Risk Management)
Degree programme: Management Sciences, Master, ASPO 01.10.2018
Module code: DFMM-MARPF-220
Hours per semester week / Teaching method: 4V (4 hours per week)
ECTS credits: 6
Semester: 1
Mandatory course: yes
Language of instruction:
Written exam (120 minutes / can be repeated semesterly)

[updated 05.12.2019]
Curricular relevance:
DFMM-MARPF-220 Management Sciences, Master, ASPO 01.10.2018, semester 1, mandatory course
MARPF-220 Accounting and Finance, Master, ASPO 01.04.2016, semester 2, mandatory course
60 class hours (= 45 clock hours) over a 15-week period.
The total student study time is 180 hours (equivalent to 6 ECTS credits).
There are therefore 135 hours available for class preparation and follow-up work and exam preparation.
Recommended prerequisites (modules):
Recommended as prerequisite for:
Module coordinator:
Prof. Dr. Matthias Gröhl
Lecturer: Prof. Dr. Matthias Gröhl

[updated 17.08.2020]
Learning outcomes:
Corporate Finance:
After successfully completing this module, students will be able to establish the link between financial management objectives and a company´s position on the capital markets based on their knowledge of corporate finance and investment. They will understand the basic shareholder value concept and the associated value drivers of a company. In addition, they will be able to determine the financial situation of a company looking at the annual financial statements and assess it based on key figures.
Students will be able to prepare their own cash flow statements and develop a company´s financial and liquidity planning. In doing so, they will be able to distinguish between long-term and short-term financial planning.
They will also be able to explain and differentiate the theoretical models for determining risk and return. In particular, they will have learned the concept of the portfolio theory and the resulting model for determining equity capital costs (CAPM).Students will be able to model and explain the theories on optimal capital structure and dividend policy.
Finally, students will be able to explain the basic valuation procedures and apply them to given cases, as well as assess their benefits.
Financial Risk Management:
After successfully completing this module, students will be able to interpret the general concept of risk and distinguish it from the concept of financial risk. In addition, they will be able to map the risk management process.
Students will be able to:
-        present and evaluate the different types of stock options and assess their applicability,
-        describe and evaluate interest rate futures (long and short) and assess their applicability,
-        describe FX forwards with regard to the essential influencing factors and calculate them in real cases,
        explain interest rate swaps and currency swaps with regard to their structure and areas of application, and calculate them in specific cases,
        explain interest rate limit contracts with regard to their structure and areas of application, and calculate them in specific cases.
Corporate Finance:

[updated 05.12.2019]
Module content:
A. Introduction
1) What is CF?
2) Financial decision criteria
3) Investment analysis summary
B. Financial analysis and _planning
1) Preliminary remarks
2) Annual financial statement
3) Company analysis
4) Financial planning
C. Risk and return
1) Preliminary remarks
2) Modern portfolio theory
3) The "Capital Asset Pricing" model
4) The Arbitrage Pricing Theory
5) Debt policy?
D. Business valuation
1) Preliminary remarks
2) Overview of valuation methods
3) Ertragswertmethode (German income approach)
4) DCF method (Discounted Cash Flow)
5) Case study
Financial Risk Management
Chapter 1: Introduction
1.1 Risk and opportunity
1.2 Types of risks
1.3 Risk measurement
1.4 Risk management
1.5 Managing financial risks
Chapter 2: Option trading
Chapter 3: Forwards
Chapter 4: Currency management
Chapter 5: Swap transactions
Chapter 6: Interest rate limit contracts
6.1 Basics
6.2 Cap
6.3 Floor
6.4 Collar
6.5 Forward Rate Agreement

[updated 05.12.2019]
Teaching methods/Media:
Lecture and exercises

[updated 05.12.2019]
Recommended or required reading:
Corporate Finance:
Berens, W.: Due Diligence bei Unternehmensakquisitionen, latest edition, Stuttgart.
Brealey, R. A./Myers, S. C.: Principles of Corporate Finance, latest edition, New York.
Bruner, R. F./Eades, K. M./Schill, M. J.: Case Studies in Finance: Managing for Corporate Value Creation, latest edition, Boston.
Damodaran, A.: Applied Corporate Finance, latest edition, Hoboken.
Ernst, D.: Applied International Corporate Finance, latest edition, München.
Hommel, M./Dehmel, I.: Unternehmensbewertung Case by Case, latest edition, Frankfurt.
Müller-Stewens, G./Kunisch, S./Binder, A.: Mergers & Acquisitions: Analysen, Trends und Best Practices, Stuttgart 2010.
Ross, S. A./Westerfield, R./Jaffe, J., Modern Financial Management, latest edition, Boston.
Financial Risk Management:
Albrecht, P. / Maurer, R.: Investment- und Risikomanagement, latest edition, Schaeffer-Poeschel, Stuttgart.
Allen, S: Financial Risk Management, John Wiley & Sons, latest edition, New Jersey.
Bloss, M. / Ernst, D.: Derivate, latest edition, München und Wien.
Bösch, M.: Derivate, München 2011.
Eilenberger, G.: Währungsrisiken, Währungsmanagement und Devisenkurssicherung  von Unternehmungen, latest edition, Frankfurt a.M..
Eller, R. (Hrsg.): Handbuch derivativer Instrumente, latest edition, Stuttgart.
Geyer, C. / Uttner, V.: Praxishandbuch Börsentermingeschäfte, latest edition, Wiesbaden.
Heidorn, T.: Finanzmathematik in der Bankpraxis, latest edition, Wiesbaden.
Hull, J. C.: Options, Futures and other Derivatives, latest edition, New Jersey.
Uszczapowski, I. / Müller, H.G.: Optionen und Futures verstehen, latest edition, München.

[updated 05.12.2019]
[Wed Apr 21 21:41:57 CEST 2021, CKEY=rfxffrm, BKEY=dms3, CID=DFMM-MARPF-220, LANGUAGE=en, DATE=21.04.2021]