Students understand the various reasons why businesses need capital. They are able to name and explain the different sources of capital and their respective advantages and disadvantages. They understand the connection between financing decisions and the legal form of a company. They can distinguish between liquidity and profit and understand why these two variables have to be managed independently.
Students gain a general understanding how financial markets are structured. They are able to name and explain the most commonly used financial instruments and how these work in reality. They are able to take rational decisions in financial markets by understanding the basic mechanisms of the pricing process.

Courses in the Module

• Financial Mathematics and Financial Instruments (2 SWS, Prof. Dr. Michael Feucht)
• Financial Markets and Institutions (2 SWS, Prof. Dr. Björn Steven Häckel)

Financial Mathematics and Financial Instruments

• Introduction: Why do businesses need capital?
• Capital requirement and sources of capital
• Leverage: Is there an optimal Debt-Equity-Ratio?
• Equity financing
• The fundamental value of a share
• Debt financing
• Amortization Schedules for long-term debt
• Mezzanine Financing
• Derivative Financial Instruments: "The Zoo"
• Cash flow /Cash Flow Statement/Cash Flow Planning

Financial Markets and Institutions

• Money Markets
• Bond Markets
• Securitisation
• Equity Markets
• Foreign Exchange Markets
• Derivative Markets
• Pricing of Financial Instruments

• Accompanying course material in Moodle (Learning Management System) 
• Recent newspaper articles

5 ECTS x 30 hours = 150 hours, combined out of the following:

• Course attendance: 60 hours
• Preparation / homework / self-study: 30 hours
• Time for exercises and group work: 30 hours
• Exam preparation: 30 hours
• Exam time: 90 minutes

Interactive lectures