MPF_FIIN Financial Investment

Faculty of Economics and Administration
Autumn 2024
Extent and Intensity
2/2/0. 6 credit(s). Type of Completion: zk (examination).
In-person direct teaching
Teacher(s)
Ing. Luděk Benada, Ph.D. (lecturer)
Ing. Dagmar Vágnerová Linnertová, Ph.D. (lecturer)
Ing. Luděk Benada, Ph.D. (seminar tutor)
Ing. Dagmar Vágnerová Linnertová, Ph.D. (seminar tutor)
Guaranteed by
Ing. Dagmar Vágnerová Linnertová, Ph.D.
Department of Finance – Faculty of Economics and Administration
Contact Person: Iva Havlíčková
Supplier department: Department of Finance – Faculty of Economics and Administration
Timetable
Mon 16:00–17:50 P102, except Mon 16. 9., except Mon 4. 11.
  • Timetable of Seminar Groups:
MPF_FIIN/01: Mon 18:00–19:50 VT204, except Mon 16. 9., except Mon 4. 11., L. Benada, D. Vágnerová Linnertová
Prerequisites (in Czech)
(! BPF_FIIN The Financial Investment )&& (! MPF_AFII Financial investments )&& !NOWANY( MPF_ACP1 The 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: 23/72, only registered: 1/72, 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 - essence, limits, issues of the time value of money
  • 2. Debt securities: input variables in the valuation process, valuation of debt securities
  • 3. Understanding the risk and return of bonds with a fixed coupon I
  • 4. Understanding the risk and yield of bonds with a fixed coupon II
  • 5. Duration and convexity of bonds
  • 6. Fixed income management
  • 7. Valuation of bonds with an embedded option
  • 8. Concept of yield
  • 9. Fundamental analysis: valuation based on dividend-discount models
  • 10. Fundamental analysis: valuation based on free cash flow models
  • 11. Fundamental analysis: relative valuation techniques
  • 12. Fundamental analysis: valuation of equity securities based on residual income valuation
  • Structure of seminars:
  • 1. Introductory seminar, time value of money
  • 2. Debt securities: input variables in the valuation process, valuation of debt securities
  • 3. Understanding the risk and return of bonds with a fixed coupon I
  • 4. Understanding the risk and yield of bonds with a fixed coupon II
  • 5. Duration and convexity of bonds
  • 6. Progress Test No. 1
  • 7. Fixed income management
  • 8. Valuation of bonds with an embedded option
  • 9. The concept of revenue
  • 10. Fundamental analysis: valuation based on dividend-discount models
  • 11. Fundamental analysis: valuation based on free cash flow models
  • 12. Progress Test No. 2
Literature
    required literature
  • ADAMS, James and Donald J. SMITH. Fixed income analysis. Fifth edition. Hoboken, New Jersey: Wiley, 2022, xx, 882. ISBN 9781119850540. info
  • PINTO, Jerald E., Elaine HENRY, Thomas R. ROBINSON, John D. STOWE and Stephen E. WILCOX. Equity asset valuation. Fourth edition. Hoboken, New Jersey: Wiley, 2020, xix, 688. ISBN 9781119628101. info
    recommended literature
  • 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
  • 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
    not specified
  • DAMODARAN, Aswath. Damodaran on valuation : security analysis for investment and corporate finance. 2nd ed. Hoboken: Wiley, 2006, xi, 426. ISBN 0471751219. 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, Yahoo Finance (or Refinitiv).
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.
In the case of a student going abroad, the student is required to write 2 intermediate tests and a final exam to pass the course. The grade will be based on the total number of points the student receives from all three compulsory parts. In the event of departure, the student is obliged to contact the guarantor before departure and agree on conditions for passing the course.
Language of instruction
Czech
Further comments (probably available only in Czech)
Study Materials
The course is taught annually.
General note: nezapisují si studenti, kteří absolvovali předmět PFFINV nebo PFFINVA nebo BPF_FIIN nebo MPF_FIIA nebo MPF_AFII.
Credit evaluation note: k = 1,00.
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 2021, Autumn 2022, Autumn 2023.
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