MKF_ACP1 The Security Analysis 1

Faculty of Economics and Administration
Autumn 2021
Extent and Intensity
26/0/0. 6 credit(s). Type of Completion: zk (examination).
Teacher(s)
Ing. Luděk Benada, Ph.D. (lecturer)
doc. Ing. Martin Svoboda, Ph.D. (lecturer)
Ing. Dagmar Vágnerová Linnertová, Ph.D. (lecturer)
Guaranteed by
doc. Ing. Martin Svoboda, 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
Fri 15. 10. 12:00–15:50 P104, Sat 6. 11. 8:00–11:50 P104, Sat 27. 11. 16:00–19:50 P104
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.
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
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
Individual lecture, reading, homework
Assessment methods
Lectures are scheduled in three blocks of four hours, according to thematic areas as follows:
Tutorial 1 - themes 1 - 4, calculation of sample examples
Tutorial 2 - themes 4 - 7, calculation of sample examples
Tutorial 3 - progress test, themes 8 - 9, calculation of sample examples
Schedule of thematic content of each tutorial according to schedule.
Conditions of course completion:
Writing a control test by the date of the last tutorial. The test will be focused on basic calculations and will correspond to the content of the course from   1. and the 2nd tutorial. Exercises stored in the interactive syllabus of the subject can be used for preparation. The condition for admission to the exam is to pass the test at least 60 percent, the test is 90 minutes. The term of the test is only one, an excuse is possible only in case of excuse not attending the tutorial in IS through the Study Department.
The final exam is only written - "multiple choice" - theoretical part.
The following grading scale applies to students' assessment, which reflects the points received by the student in the control test and points from the final examination: A 92 - 100%, B 84 - 91%, C 76 - 83%, D 68 - 75%, E 60-67%, F less than 60%)
Any copying, recording or leaking tests, use of unauthorized tools, aids and communication devices, or other disruptions of objectivity of exams (credit tests) will be considered non-compliance with the conditions for course completion as well as a severe violation of the study rules. Consequently, the teacher will finish the exam (credit test) by awarding grade "F" in the Information System, and the Dean will initiate disciplinary proceedings that may result in study termination.
Language of instruction
Czech
Further comments (probably available only in Czech)
Study Materials
The course is taught annually.
Information on the extent and intensity of the course: tutorial 12 hodin.
Credit evaluation note: k = 1.
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.
  • Enrolment Statistics (Autumn 2021, recent)
  • Permalink: https://is.muni.cz/course/econ/autumn2021/MKF_ACP1