FIN3403-Final Exam Review.pptx - FIN3403-Final Exam Review December 2017 Chapter Breakdown Chap 5 TVM Mortgages Chap 6 Beta/Expected Return of Portfolio

FIN3403-Final Exam Review.pptx - FIN3403-Final Exam Review...

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FIN3403-Final Exam Review December 2017
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Chapter Breakdown: Chap. 5- TVM, Mortgages Chap. 6- Beta/Expected Return of Portfolio Chap. 7- Bonds Chap. 8- Stocks Chap. 9- WACC, Cost of (debt, common equity-internal/external, preferred stock) Chap. 10- IRR, NPV, EAA, Profitability Index, MIRR Chap. 11- IO, ACF, TCF, NPV Chap. 12- DOL, DCL, DFL, Breakeven, EBIT level of indifference Chap. 13- Stock Splits
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Time Value of Money
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Time Value of Money You currently have $2,000.00 in an account and plan on depositing $1,000.00 into the account each month, starting in 1 month. If the account earns a nominal rate (monthly compounding) of 6.10%, how much will be in the account (what is the future value) in 8 years, just after making your final deposit? A. $72,754 B. $95,188 C. $117,810 D. $126,607 E. $140,526
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Time Value of Money You currently have $2,000 in an account and plan on depositing $1,000 into the account each month, starting in 1 month. If the account earns a nominal rate (monthly compounding) of 6.10%, how much will be in the account (what is the future value) in 8 years, just after making your final deposit? A. $72,754 B. $95,188 C. $117,810 D. $126,607 E. $140,526 PV = -2,000 PMT = -1,000 P/Yr = 12 I/Yr = 6.10 N = 96 (12 x 8) FV = ?
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Time Value of Money - Effective Annual Rate Estimate the effective annual rate (EAR) for a monthly compounded annual nominal rate of 10.00%. A. 10.2109% B. 10.4713% C. 10.5999% D. 10.7264% E. 11.328%
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Time Value of Money - Effective Annual Rate Estimate the effective annual rate (EAR) for a monthly compounded annual nominal rate of 10.00%. A. 10.2109% B. 10.4713% C. 10.5999% D. 10.7264% E. 11.328% P/Yr = 12 I = 10 [SHIFT] EFF % = ?
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Time Value of Money (TVM) - Uneven Cash Flows What is the NPV of a project with the following expected cash flows? Use a discount rate of 15%. Year Project Cash Flow 0 -$250,000 1 50,000 2 50,000 3 75,000 4 75,000 5 75,000 6 125,000 A. -$1,344 B. $9,108 C. $14,810 D. $27,043 E. $40,026
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Time Value of Money (TVM) - Uneven Cash Flows What is the NPV of a project with the following expected cash flows? Use a discount rate of 15%. Year Project Cash Flow 0 -$250,000 1 50,000 2 50,000 3 75,000 4 75,000 5 75,000 6 125,000 A. -$1,344 B. $9,108 C. $14,810 D. $27,043 E. $40,026 -250,000 CF0 50,000 CF1 2 SHIFT NJ 75,000 CF2 3 SHIFT NJ 125,000 CF3 15 I/Yr 1 P/Yr SHIFT NPV
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Bonds
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Bonds – Bond Valuation Microsoft issued a bond with a par value of $1,000, a coupon rate of 7.25% (semiannual coupon), and a yield to maturity of 6.60%. The bond has 12 years to maturity. What is the value of the bond? A. $985 B. $1,015 C. $1,035 D. $1,053 E. $1,135
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Bonds – Bond Valuation Microsoft issued a bond with a par value of $1,000, a coupon rate of 7.25% (semiannual coupon), and a yield to maturity of 6.60%. The bond has 12 years to maturity. What is the value of the bond?
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