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Chapter 8. Risk and Rates of Return
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The higher a security's risk, the higher its required return. Risk can be thought of in
two ways: (1) Stand-alone risk, where the security is considered in isolation, and (2)
portfolio risk, w
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Chapter 7. Bonds and Their Valuation
The value of any financial asset is the present value of the asset's expected future cash flows. The key
inputs are (1) the expected cash flows and (2) the approp
Table 12-1 Cash Flow Estimation and Analysis for Expansion Project S
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Investment Outlays at Time = 0
Equipment
Net WC
Net Cash Flows Over the Project's Life
Unit sales
Sales price
Variable cost per unit
Sales revenues = Units Price
Variable costs = Units
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Chapter 10. The Cost of Capital
The cost of capital is a vital element in the capital budgeting process. For a project to be
accepted, it must provide a return that exceeds its cost of capital, or hurdle r
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Chapter 4. Analysis of Financial Statements
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This model is STRICTLY OPTIONAL. Neither students nor instructors need to go through it. However, if
someone wants to practice with Excel, then the model can
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Chapter 3. Financial Statements, Cash Flows, and Taxes
This model is STRICTLY OPTIONAL. Neither students nor instructors need to go through it. However,
if someone wants to practice with Excel, then the model can be useful. Also,
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Chapter 9. Stocks and Their Valuation
This model is similar to the bond valuation models developed in Chapter 7 in that we employ
discounted cash flow analysis to find the value of a firm's stock.
COMMON STOCK VALUATION (Section
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Chapter 14. Capital Structure and Leverage
In this chapter, we introduce two new dimensions of risk, business risk and financial risk. Business risk
is the risk inherent in the firm's operations, and it would be there even if the firm use
Model for Chapter 11, Basics of Capital Budgeting
On tab #1 we go through the main calculations done in the chapter. We recommend that you see our Excel Tutorial
if you don't understand some of the Excel functions.
Table 11-1. Data on Projects S and L
WAC
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Chapter 5. The Time Value of Money
This model is STRICTLY OPTIONAL. Neither students nor instructors need to go through it. However, if
someone wants to practice with Excel, then the model can be useful. Also, on the tabs we show