More information regarding the course

• Bachelor-degree

• faculaty business and economics

• recommend participation to the students from the 4th semester

• one semester

• 15 hours x 4 blocks

• When it comes to explaining investments decision making two different aspects need to be considered. On the one hand there are real investment projects and financial assets, on the other hand there are certainly analysis and uncertainty analysis. To be honest, currently there is no such thing as a certaity world. However, we need certainty analysis to study the aspects of time value of money. For sure, the most important decision problems are characterized by uncertainty. There is, however, one further classification required. We need to separate symmetric vs. asymmetric distribution of information. In a world with asymmetric information the most important aspects are related to signaling and incentive designing. To convey information from insiders to outsider there is signaling by picking strange investment projects, by choosing bizarre capital structures, by adopting fantastic ownership combinations. In addtion, managerial incentives differ from shareholder incentives or debtholder incentives. As a result, real asset and financial asset decision making are no longer seperated activities. If we want to understand what is going on in real life of corporate decision making, an interrelated approach is required. That is what we try to end up with.

• Final written exam (100%)