Fin 221 web Lect1

Fin 221 web Lect1 - Managerial Finance Lecture 1 Course...

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1 Managerial Finance Lecture 1 Course Overview and and Time Value of Money Roadmap I. Course overview What is this class all about? Course roadmap Class preparation II. Using financial statements Basics III. Time value of money Present value Future value Net present value (NPV) 2
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2 What is Finance about? Finance is about decision making Corporate finance: invest, borrow, acquire, etc How to value a firm / investment? How do we enhance firm value through financial management? Are shareholders better off if a firm uses more debt financing? How does project flexibility (option to delay, expand, etc) affect investment decisions? Capital markets: buy or sell shares, bonds, options, etc How do investors compare risks across investment opportunities? 3 How do investors derive optimal investment portfolio choices? Firm value in the news… Tech H-P Board Weighing CEO Ouster By Ben Worthen And Joann S. Lublin 21 September 2011 The Wall Street Journal Online Hewlett-Packard Co.'s board was meeting Wednesday to consider ousting Leo Apotheker as chief executive, according to people briefed on the matter. The situation was still fluid by Wednesday afternoon. According to some of the people briefed, Meg Whitman, the former eBay Inc. chief who currently serves on H-P's board, is a candidate to be named interim CEO, though she may not be interested in the position 4 the position. H-P's share price has fallen more than 45% since Mr. Apotheker took over. It was up more than 10% following news of Mr. Apotheker's potential ouster.
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3 Capital structure in the news SEPTEMBER 12, 2011, 8:34 AM ET Jamie Dimon Wonders If Maybe Basel Bank Capital Rules Hate America By Mark Gonglof AP Somebody must have lit up the Dimon Signal: American hero Jamie Dimon is out defending American banks again, this time against villainous foreign capital requirements . Mr. Dimon, in an interview with foreign newspaper the Financial Times, takes a break from berating American regulators to berate foreign regulators, declaring that their bank-capital rules , with the foreign name “ Basel III ,” are anti-American and that America 5 should shun them. Value of flexibility Companies Shun Investment, Hoard Cash By Ben Casselman And Justin Lahart 17 September 2011 Corporations have a higher share of cash on their balance sheets than at any time in nearly half a century, as businesses build up buffers rather than invest in new plants or hiring. Nonfinancial companies held more than $2 trillion in cash and other liquid assets at the end of June, the Federal Reserve reported Friday, up more than $88 billion from the end of March. 6
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4 Capital markets REGION INDEX % CHANGE Americas USA DOW JONES INDUS. AVG -3.51% USA S&P 500INDEX -3.19% USA NASDAQ COMPOSITE INDEX -3.25% MEXICO MEXICO IPC INDEX -4.82% BRAZIL BRAZIL BOVESPA INDEX -4.83% Europe, Africa and Middle East U.K. FTSE 100INDEX -4.67% FRANCE CAC 40 INDEX -5.25% GERMANY DAX INDEX -4.96% SPAIN IBEX 35INDEX -4.62% NETHERLANDS AEX Index -4.44% SWEDEN OMX STOCKHOLM 30 INDEX -4.88% SWITZERLAND SWISS MARKET INDEX -3.41% 7 Source: Asia
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Fin 221 web Lect1 - Managerial Finance Lecture 1 Course...

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