Dear students,
I have provided additional learning material for our “Financing & Investment” module here. This material is designed to help you better understand the content and successfully master the exam performance in our module. However, the main sources of information are the lectures and our script or the notes that I make available to you after each event.
Exam Performance
In our module, the exam performance consists of an exam and a seminar paper. Both exam performances can be completed independently of each other. However, postponing an exam performance always leads to stress at a later point in your studies. The seminar paper should be prepared in a group, as you can check each other in this way.
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Information about the exam
Basic information about the exam can be found in the module documents. I also provide my “lecturer’s notes” for each course. This contains extensive information on topics discussed in the course. Student questions are also answered in the FAQ on the exam.
Information about the seminar paper
In addition to the exam, a seminar paper must also be written in our module. The choice of topic is basically free for me. The topic only has to fit into the curriculum of Financing & Investment. It is best to take a topic that concerns you professionally or privately! It is important that you integrate a practical reference in the seminar paper. A lot of information about the seminar paper is in the script and is available in the lecture. You can also find helpful information about the seminar paper here. Take a look at these posts for the seminar paper by clicking on the buttons ⬇️:
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If you should ever get stuck, it is best to coordinate with us at the next event. If that takes too long, book a meeting with me by clicking on the button ⬇️:
Learning Material “Financing & Investment”
Below you will find further information on individual topics of our event. These are intended to help you take another look at the topics and improve your understanding of the individual topics:
Basics of Financial Management
Banks play a central role in the economic cycle. They manage deposits, grant loans and promote investments. In this way, they support growth, create liquidity and influence the money supply. Their functions are crucial for stable economic developments and consumer confidence. However, banking systems also harbor risks. Shadow banks, often less regulated, can exacerbate financial crises. Through speculative transactions and a lack of transparency, they can destabilize the financial system. In addition, the granting of risky loans can lead to bubbles and ultimately to economic slumps. For deeper insights, read the book “The End of Banks*” (alternatively at Blinkist*).
External Financing
External equity financing – start-up financing
A business plan is essential for new start-ups and consists mainly of tables and a presentation. The assumptions overview lists all unknown variables, from website visits to profit margins. Important components are the cost and employee plan, which contribute to the profit and loss statement. A management summary summarizes findings and projects business forecasts for five years. A detailed business plan leads to more precise forecasts, with each plan based only on current knowledge. This plan in combination with the presentation is called “Deck”. This is often decisive for investors as to whether or not they invest in the company.
If you are interested in online business, I recommend the book “My Children Will Be Born Rich”* (alternatively at Blinkist*). This book entertainingly explains how a problem becomes a business idea and how this is then seen as an entrepreneurial opportunity. Above all, online it is often only about solving problems and not really about innovation. If you are not interested online, you can read something similar with “No Big Deal”* about the founding of a coffee house chain.
Successful start-ups in online business – from idea to implementation
Source: “My Children Will Be Born Rich”* on Amazon.de
For repetition and deepening: If I want to involve investors in my company, the easiest way to do this is with corporations. If you feel unsure here, I recommend the podcast episode “Corporations in Corporate Law”.
Subscription Rights
The topic of “subscription rights in the case of a capital increase” is an essential aspect of stock corporation law, which ensures that the interests of existing shareholders are not diluted when new shares are issued. Subscription rights allow shareholders to maintain their percentage share in the company or actively decide on their investment. For a more in-depth practical application, it is recommended to do practice exercises in order to fully understand the concept and its effects.
Investment calculation
What Do Index Rents Have to Do with Investment Calculation and the Growth Factor?
Index rents, investment calculation and the growth factor are concepts that are used in economic or financial contexts, but they have different specific meanings and applications. To understand their relationship to each other, we must first consider each term individually:
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- Index rents: With an index rent, the amount of the rent is linked to the development of a price index, usually the consumer price index. If the index rises, so does the rent, and vice versa. This model offers landlords and tenants a certain degree of security, as it protects against unforeseen rent increases and keeps the rent in line with general price developments.
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- Investment calculation: Investment calculations are methods for evaluating and selecting investment projects. They are used to analyze the economic viability of investments. Common methods include static and dynamic investment calculation, with dynamic methods such as the internal rate of return, the annuity method or the capital value taking into account that money has a time value.
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- Growth factor: The growth factor indicates by what factor a quantity grows over a certain period of time. For example, an annual growth factor of 1.03 could mean that a quantity grows by 3% each year.
In our Financing & Investment event, we focus on dynamic methods in investment calculation and, in particular, on the internal rate of return (Internal Rate of Return) and the chapter value (Net Present Value).
Context:
These concepts can come together when considering investments in real estate. For example, an investor might want to estimate the future rental income of a property that is rented out with index rents. Here, the growth factor, based on historical data from the consumer price index or other relevant indices, could be included in the investment calculation in order to estimate the expected cash flow from the rent over the years. The growth factor would then reflect the annual increase in rent due to the index adjustment.
In short, although the concepts are used in different contexts, they can be linked in certain investment scenarios, particularly in real estate investments.
Why Index Rents are Criticized
… more on this in a podcast by Panajotis Gavrilis for Deutschlandfunk (click on the picture 👇)
Source: imago images / blickwinkel / McPHOTO, via www.imago-images.de
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