MPF_ACP1 The Security Analysis 1

Faculty of Economics and Administration
Autumn 2021
Extent and Intensity
2/2/0. 6 credit(s). Type of Completion: zk (examination).
Teacher(s)
Ing. Dagmar Vágnerová Linnertová, Ph.D. (lecturer)
Ing. Dagmar Vágnerová Linnertová, Ph.D. (seminar tutor)
Ing. Luděk Benada, Ph.D. (lecturer)
Ing. Luděk Benada, Ph.D. (seminar tutor)
prof. Ing. Štefan Lyócsa, PhD. (lecturer)
Guaranteed by
prof. Ing. Štefan Lyócsa, PhD.
Department of Finance – Faculty of Economics and Administration
Contact Person: Iva Havlíčková
Supplier department: Department of Finance – Faculty of Economics and Administration
Timetable
Mon 14:00–15:50 P303, except Mon 13. 9., except Mon 1. 11.
  • Timetable of Seminar Groups:
MPF_ACP1/01: Mon 16:00–17:50 VT204, except Mon 13. 9., except Mon 1. 11., D. Vágnerová Linnertová
Prerequisites (in Czech)
! MPF_ASAN Security Analysis
Course Enrolment Limitations
The course is also offered to the students of the fields other than those the course is directly associated with.
The capacity limit for the course is 72 student(s).
Current registration and enrolment status: enrolled: 0/72, only registered: 0/72, only registered with preference (fields directly associated with the programme): 0/72
fields of study / plans the course is directly associated with
Course objectives
The aim of the course is to understand the term value from a financial point of view, to orient oneself in methods and models for determining the fundamental value and to formulate investment recommendations. Methods and models for determining the fundamental value will be applied to debt and equity financial instruments while respecting the specifics of their cash flows.
Learning outcomes
After completing the course, the student will be able to:
- to orientate oneself in the issue of value from the point of view of financial theory;
- understand the issue of yield, resp. required rate of return in the valuation process;
- determine the sources of income for debt securities and value individual debt instruments, including convertible bonds;
- understand the relationship between return and risk for debt securities;
- characterize the individual models used to find the intrinsic value of a stock, including determining the criteria for selecting the appropriate model for a given stock and market;
- determine the value of private companies, the so-called Private Equity;
- determine the investment strategy, formulate investment decisions and determine market timing.
Syllabus
  • Thematic plan of lectures:
  • 1 Introduction to the analysis of securities - fundamentals, limits, concept of time value of money
  • 2 The concept of return and the issue of the cost of capital
  • 3 Debt securities: input variables in the valuation process, valuation of debt securities
  • 4 Valuation of debt securities and valuation of convertible bonds
  • 5 The relationship between return and risk in the valuation process of debt securities
  • 6 Fundamental analysis: industry analysis and company analysis
  • 7 Fundamental analysis: valuation based on dividend discount models
  • 8 Fundamental analysis: valuation based on free cash flow models
  • 9 Fundamental analysis: relative valuation techniques
  • 10 Fundamental analysis: valuation of stocks based on residual income valuation
  • 11 Valuation of private companies, share repurchases
  • 12 Code of ethics and standards of professional conduct, modern approaches in the valuation process

  • Seminar Structure:
  • 1 Introductory seminar, Time Value of Voney
  • 2 Problems of determining the discount rate
  • 3 Valuation of bonds I.
  • 4 Valuation of bonds II. and Convertible bonds Valuation
  • 5 Price sensitivity of bonds
  • 6 Progress test No. 1
  • 7 Discounted CF Valuation
  • 8 Discounted CF Valuation
  • 9 Market based Valuation
  • 10 Residual Income Valuation
  • valuation 12 Valuation of private companies and specifics of private companies valuation
  • 12 Progress test No. 2
Literature
    required literature
  • PETITT, Barbara S. Pécherot, Jerald E. PINTO and Wendy L. PIRIE. Fixed income analysis. Edited by Robin Grieves - Gregory M. Noronha. Third edition. Hoboken: Wiley, 2015, xxii, 714. ISBN 9781118999493. info
  • PINTO, Jerald E., Elaine HENRY, Thomas R. ROBINSON, John D. STOWE and Stephen E. WILCOX. Equity asset valuation. Third edition. Hoboken, New Jersey: Wiley, 2015, xix, 595. ISBN 9781119104261. info
  • MONKS, Robert A. G. and Alexandra Reed LAJOUX. Corporate valuation for portfolio investment : analyzing assets, earnings, cash flow, stock price, governance and special situations. Edited by Dean LeBaron. Hoboken: Bloomberg Press, 2011, xx, 556. ISBN 9781576603178. info
    recommended literature
  • DAMODARAN, Aswath. Damodaran on valuation : security analysis for investment and corporate finance. 2nd ed. Hoboken: Wiley, 2006, xi, 426. ISBN 0471751219. info
  • GRAHAM, Benjamin and David L. DODD. Security analysis : principles and technique. 2nd ed. New York: McGraw-Hill Book Company, 1940, xiii, 851. ISBN 007141228X. info
Teaching methods
Lectures dealing with selected issues. The seminars are in the form of applying knowledge from theory to individual examples for the purpose of valuing bonds, the bond price sensitivity, determining the required rate of return in the process of equity valuation and the fundamental value determination using a models or methods for the selected company (private companies, public companies, companies in the growth phase, companies in the mature). The knowledge are amended with outputs from the Bloomberg terminal.
Assessment methods
At the seminar, two tests are written according to the schedule. You can get 15 points for each test. To be admitted to the test, it is necessary to obtain in the sum for both tests min. 18 points (out of a total maximum of 30 points). Points from both continuous tests are added to the final evaluation of the course (ie a maximum of 30 points). There is only one attempt for each test and it is not possible to correct the test.
Short online tests in class, from each test it is possible to get 5 points, a total of 40 points from 8 tests (basic theoretical questions and calculations).
Activity in seminars is evaluated by individual points, max. 2 points per seminar (voluntary activity).
Summary of conditions for admission to the test:
at least 16 points in total for both continuous tests + at least 20 points from online tests per hour.
Final evaluation:
Maximum points for continuous tests and final exam: 100 points, (final written work 50 points, from continuous written works at the seminar max. 30 points, from continuous online tests in class 20 points) The final written work is in the form of "multiple choice", the content of theoretical foundations, basic calculations.
Taking into account individual points for seminars in the final evaluation.
The following classification scales apply to student evaluation: A min 92%, B 84 - 91%, C 76 - 83%, D 68 - 75%, E 60 - 67%, F less than 60%)
Any copying, recording or taking of tests, use of illicit aids as well as means of communication or other distortions of objectivity exam (credit) will be considered as failure to meet the conditions for completion of the course and for gross violation of study regulations. As a result, the teacher closes the exam (credit) evaluation in   IS with mark "F" and the dean will initiate disciplinary proceedings, which may result in the completion of studies.
Language of instruction
Czech
Further comments (probably available only in Czech)
Study Materials
The course is taught annually.
Credit evaluation note: k = 1.
Listed among pre-requisites of other courses
The course is also listed under the following terms Autumn 2009, Autumn 2010, Autumn 2011, Autumn 2012, Autumn 2013, Autumn 2014, Autumn 2015, Autumn 2016, Autumn 2017, Autumn 2018, Autumn 2019, Autumn 2020, Autumn 2022, Autumn 2023, Autumn 2024.
  • Enrolment Statistics (Autumn 2021, recent)
  • Permalink: https://is.muni.cz/course/econ/autumn2021/MPF_ACP1