4509190: Financial Decision Making

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Semester:SS 18
Scheduled in semester:4
Semester Hours per Week / Contact Hours:60.0 L / 45.0 h
Self-directed study time:135.0 h

Module coordination/Lecturers


Bachelor's degree programme in Business Administration (01.09.2012)


Corporate Finance:

  • Investment Decision Rules
  • Capital Budgeting
  • Capital Structure
  • Financial Distress and Payout Policy
  • Corporate Valuation
  • Long-Term Financing
  • Short-Term Financing

Decision Theory:
  • Expected utility theory
  • Mean-variance theory
  • Prospect theory.
  • Asymmetric information
  • Market efficiency
  • Behavioral Finance


    • Know the most prominent decision theories. They are aware of the important human biases in financial decision making.
    • Understand how rational solutions can be found by applying classical decision models and are aware of the differences between these model solutions and the solutions humans normally come up with.
    • Solve decision problems by using DT models and quantitative methods. They find the strategic aspect of a problem and transform it into a simplified game/problem.
    • Evaluate of Investments with EUT, MVT and PT.
    • Know the most prominent rules for Capital Budgeting and Structuring
    • Understand the consequences of changes in the capital structure
    • Know a variety of financing tools and their applicability
    • Know how to value a company
    • Know methods in decision theory.
    • Use theories, methods and models on unknown decision situations. Calculate optimal solutions and equilibria.
    • Compare different methods for measuring and controlling risk and uncertainty in decision processes.
    • Evaluate decision and analysis methods in mini cases and find appropriate models for solving typical problems.
    • Know how to use a range of instruments to control the capital structure of a corporation.
    • Choose suitable financing and investment tools
    • use methods and models on unknown decision situations. Calculate optimal solutions and interpret them.
    • Understand and critically discuss the arguments of fellow students.
    • Work on financial decision making problems and solve mini cases as well as examples in small groups and discuss them in front of class.
    • Evaluate the solutions of fellow students, explain carefully why they might be seen as right or wrong.
    • Understand the problems of fellow students, react on critical discussion without being offended.
    • React to other opinions and solutions and defend their own solution without being offended.
    • Listen carefully, read and repeat, practice until they understand the logic and mathematics the models are based upon.
    • Work together and motivate other students who tend to give up as a reaction to the difficulty of mathematical problems.
    • Take responsibility and organize/explain solutions to others

Admission Requirements

Knowledge prerequisites:

Modul Mikroökonomie

  • Preferences and Utility
  • Decisions under risk and uncertainty


Voraussetzung für die Anmeldung zum Modul:

  • erfolgreicher Abschluss von English I
  • erfolgreicher Abschluss von weiteren Modulen des 1. Regelstudienjahres im Umfang von weiteren 45 Credits