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Active Portfolio Management *

Name of module: Active Portfolio Management *

Exam number: 3033

Semester/Trimester: Semester

Form of the module (i.e. obligatory, elective course): Wahlpflicht

Frequency of module offer: Each semester, until winter semester 2009/2010

Prerequisites: "Orientierungsphase" should be completed.

Applicability of module for other modules and study programmes:
Serviceveranstaltung für Studierende der Kultur- bzw. Rechtswissenschaften

Person responsible for module: Prof. Dr. Sven Husmann, Prof. Dr. Karl Ludwig Keiber

Name of the professor: Prof. Dr. Sven Husmann, Prof. Dr. Karl Ludwig Keiber

Language of teaching: englisch

ECTS-Credits (based on the workload): 5

Workload and its composition (self-study, contact time):
Kontaktzeit (Vorlesung, Übung, Seminar etc.): 37,5 Std.; Selbststudium: 112,5 Std.

Contact hours (per week in semester): 3

Methods and duration of examination:
It is possible to earn a course requirement (Eigenleistungsschein). Provided that you successfully write a term paper and present it to the class.

Emphasis of the grade for the final grade: Eins

Aim of the module (expected learning outcomes and competencies to be acquired):
The participants are able to analyze a financial statement of corporations. The participants can back out relevant cash flows from the income statement for performing either the valuation of the equity stake of a corporation or of the firm as a whole. The Participants can determine both the equity cost of capital and the weighted average cost of capital of a corporation. The participants can distinguish and apply equity valuation approaches (dividend discount model, free cash flow to equity model) and company valuation models (free cash flow to the firm model, adjusted present value model). The participants can formulate steady-state as well as multi-stage discounted cash flow models. The participants are able to use both firm value multiples and equity value multiples in order to perform equity and firm valuations. The participants are able to correct multiples for differences in fundamental firm characteristics as there are the systematic risk, the growth rate, the return on equity, and the payout ratio in order to unbias the assessment of over- and undervaluation for individual shares of stock. The participants can do research on real-world corporations and apply the absolute and relative valuation techniques to these corporations in order to assess the over- or undervaluation of the company’s equity in the capital market. The participants are able to write an investment report on some real world corporation in group work, can do a presentation on the major elements of the report and can defend their view on the over- or undervaluation in a discussion following the presentation. The participants are able to exchange views with practitioners from the financial industry in the field of investment banking. The participants can decide on a real-world investment with real money while obeying an ethical codex for investment.

Contents of the module:
Security Analysis and Financial Statements Analysis, Discounted Cash Flow Valuation Techniques, Relative Valuation, Portfolio Formation, Company Reports, Presentation, Practitioners’ talks.

Teaching and learning methods:
Lecture with integrated tutorial

Additional feature:
Es wird ein reales Wertpapier-Portfolio i. H. v. 30.000 € verwaltet. Gastvorträge sind integraler Bestandteil des Kurses. U.a. konnte in der Vergangenheit Herr Dr. Jörg Krämer, Chefvolkswirt der Commerzbank für einen solchen Vortrag zum Thema „Weltwirtschaft: Absturz oder weiche Landung“ gewonnen werden.

Literature (compulsory reading, recommended literature):
Damodaran, A., Damodaran on Valuation – Security Analysis for Investment and Corporate Finance, 2nd Ed., Wiley, New York, 2006.

Further information:
Web page "Active Portfolio Management"