MidtermReview

MidtermReview - 1) Discount bond 2) Coupon bond b. Yield to...

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MTMG 109 Midterm Text book chapters: 1, 5, 6, 7, 8, 9 Notes chapters: 1, 2, 3, 4 Main Topics Covered 1. Introduction a. What is finance b. What is corporate finance c. The advantages and disadvantages of a corporation d. The goal of financial management e. Agency costs f. Financial Markets
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2. Time Value of Money a. Future value of a single cash flow b. Present value of a single cash flow c. Future value and present value of a stream of cash flows d. Annuities - Using the calculator to solve for PV, FV, PMT, n, i e. Growing annuities f. Perpetuities g. Growing perpetuities h. Compounding intervals i. Stated versus effective rates j. Using a time line and putting everything together
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3. Bond Valuation a. Using PV relationships to solve for bond value
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Unformatted text preview: 1) Discount bond 2) Coupon bond b. Yield to maturity c. Compounding intervalssemi-annual d. Discount bond, par bond, premium bond e. Yield Curve f. Relation between bond prices and interest rates g. Interest rate risk h. Nominal vs. real rate 4. Stock Valuation a. Dividend discount models (DDMs) b. Constant dividends c. Constant growth dividends d. Different growth rate for different time periods 5. How to make investment decisions a. NPV (best) b. Payback (bad) c. Accounting rates of return (bad) d. IRR (problematicin certain limited circumstances, okay) e. Profitability Index (similar issues as IRR) f. Using calculator to find NPV and IRR for uneven cash flows...
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MidtermReview - 1) Discount bond 2) Coupon bond b. Yield to...

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