All of the following are true of the Williams Act except for
a.
Consists of a series of amendments to the 1934 Securities Exchange Act
b.
Facilitates rapid takeovers over target companies
c.
Requires investors acquiring 5% or more of a public company to f
Assignment Print View
1.
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0.0
00
0 ppooiinnttss
All other things equal (YTM = 10%), which of the following has the longest duration?
A 30-year bond with a 10% coupon
A 20-year bond with a 9% coupon
A 20-
Bond valuation (a few more things)
Stock Valuation
FIN 3610
Lecture #12
1
Bond Valuation
A few more things left from our previous class
2
Determinants of Bond Yield (Required Return)
Real rate of interest
compensation investors demand for forgoing the use
Interest Rates and Bond Valuation
FIN 3610
Lecture #11
1
Recap
Bond Value = PV of coupons + PV of par
Yield to maturity (YTM) - the rate required in the market on a bond
Relationship between coupon and yield
Current yield vs. YTM
What factors determi
Project Analysis
FIN 3610
Lecture #22
1
Recap
Forecasting risk
Scenario analysis
Sensitivity analysis
2
Break-Even Analysis
Common tool for analyzing the relationship between sales volume
and profitability
There are three common break-even measures
Stock Valuation (finish up) &
NPV and Other Investment Criteria
FIN 3610
Lecture #14
1
Features of Common Stock (contd)
Staggered boards
Only a fraction of the directorships (1/3) are up for election at a particular
time.
Facebook, Groupon Inc, LinkedIn
Flotation Costs
The required return depends on the risk, not how the money is raised
However, the cost of issuing new securities should not just be ignored either
e.g. underwriting fees, legal fees and registration fees, etc.
What does it mean by the f
Stock Valuation
FIN 3610
Lecture #13
1
Nonconstant Growth
If the dividend grows steadily after t periods, then the price can be
written as:
1
2
0 =
+
+ +
+
2
1+
1+
1+
1+
where =
(1+)
2
Nonconstant Growth - Example
Suppose a firm is expected to increas
Cost of Capital
FIN 3610
Lecture #24
1
Teaching Evaluation
Course Section: FIN3610 - CMW
Evaluation Period: May 7 May 18
You can use the personal evaluation link provided in the invitation
email to complete the evaluation.
Or, you can go to http:/baru
Project Analysis
FIN 3610
Lecture #21
1
This Chapter
Chapter 10
Identify and organize relevant
cash flows for capex decisions
Preliminary estimate of the NPV
for a proposed project
Chapter 11
Reliability of cash flow estimates
Forecasting risk
Reliab
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.607247
R Square 0.368749
Adjusted R 0.210936
Standard E 0.139692
Observatio
6
ANOVA
df
Regression
Residual
Total
SS
MS
F
Significance F
1 0.045597 0.045597 2.336625 0.20109
4 0.078055 0.019514
5 0.123652
C
FORMULA SHEET - PART 1 (Chapter
2, 3, 5, 6)
Assets = Debt + Equity
Net Working Capital (NWC) = Current Assets Current Liabilities
EBIT = Net Sales Cost of Goods Sold Selling, Generaland & Administrative Expenses Depreciation
Taxable Income = EBIT Interest
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis Notes
LECTURE 1
Value
Risk/Economy
Chapter 1
DEFINITIONS:
Value Creation (Cost < Result) Investment
Return Vs Risk - Analysis
Real Assets Vs Financial Assets (Land/Building Vs
FORMULA SHEET - MIDTERM #2
1
1 - (1 r)t
Bond Value C
r
F
t
(1 r)
C = Coupon paid each period; r = Rate per period; t = Number of periods; F = Bonds face value
Coupon rate = annual coupon / face value
Current Yield = annual coupon / price
Yield to maturit
Making Capital Investment
Decisions
FIN 3610
Lecture #18
1
Todays Coverage
Identifying Relevant Project Cash Flows
Preparing Pro Forma (Projected) Financial Statements
Conversion to Free Cash Flow
Some Special Cases of DCF Analysis
Evaluating Cost-c
Making Capital Investment
Decisions
FIN 3610
Lecture #16
1
Numerical Exercise
Consider an investment that costs $100,000 and has a cash inflow of
$25,000 every year for 5 years. The required return is 9%, and required
payback is 4 years.
What is the
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis Notes
LECTURE 2
Chapter 3
SECURITIES MARKETS
IPO Required Docs:
Amendment to the certificate of incorporation
Corporate Governance (Private are far less formal
responsibility)
Long-Term Financial Planning
and Growth
FIN 3610
Lecture #26
1
Road Map Revisit
Intro
Role of financial
manager
Goals of the
corporation
Corporate
governance
Financial
Statements
B/S, I/S, cash
flows
Dupont analysis
Ratio analysis
Valuation
Time val
Making Capital Investment
Decisions
FIN 3610
Lecture #17
1
How to derive CFs?
1. Starting point (take as given)
unit sales, price per unit
variable cost per unit, total fixed costs
total investment required (including any investment in NWC)
terminal CFs:
NPV and Other Investment Criteria
FIN 3610
Lecture #15
1
Decision Rules
Net present value (NPV)
Payback Period & Discounted Payback Period
Internal Rate of Return (IRR) & Modified IRR
Profitability Index (PI)
Need to answer:
1) Is a particular project
Chapter 7 - 10
Review
FIN 3610
Lecture #19
1
Chapter 7
Bond Valuation
2
Chapter 7
Bond Value = PV of coupons + PV of par
Yield to maturity (YTM) - the rate required in the market on a bond
Relationship between coupon and yield
Current yield vs. YTM
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis
LECTURE 3
Bond Portfolio (Chapter 11)
Interest Rate Sensitivity Calculating Duration and Convexity
N
DMac
CFt
1 i
t 1
1 i
t
VB
1
C
t
2
N
1 i
CFt
t
t 1
t t
2
VB
Duration: is
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis
LECTURE 2
Bond Prices, Yields and Portfolio Management (Chapters 10 & 11)
Money Terms:
Amount
o Face Value / Par Value ($1,000)
o Market Value quoted as a % of Face Value (price
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis
LECTURE 1
Risk/Economy
FIN 3710 REVIEW
DEFINITIONS:
Value Creation (Cost < Result) Investment
Return Vs Risk - Analysis
Managing /
Hedging
Real Assets Vs Financial Assets (Land
BARUCH COLLEGE DEPARTMENT OF ECONOMICS & FINANCE
Professor Chris Droussiotis
LECTURE 4
Chapter 13
Asset / Equity Valuation
Different Measurements of Valuation
Net Book Value
The main features, of net book value, include:
Net book value equals the total e
Adam Scharaga
[email protected]
516-477-8439
FIN 4710- CMWA
Term Project
Professor Francis
SCHARAGA Adam
Professor Francis
The Vanguard 500 Index Investor Fund, VFINX, is an index fund that gives investors the
opportunity to gain broad and
1. Calculate the following:
a. Inventory turnover ratio in 2015
Cost of Good s Sold
= Average Inventor ies
$ 2,850
= ( $ 490 + $ 480)/2
= 5.876
b. Debt to equity ratio in 2015
=
Debt
Equity
$ 3 ,34 0
= $ 960
= 3.479
c. Cash flow from operating activities
Chapter 21
1.
Inflation has an adverse effect on your savings because:
I. It erodes the purchasing power of the dollars you have saved. True
II. It increases the real rate of return on the dollars you save. False
III. Unless sheltered, it increases the ta
Chapter 18 From the Textbook
1
Finance committee of an endowment fund has decided to shift part of its investment in an index
fund to one of two professionally managed portfolios. Upon examination of past performance, a
committee member proposes to choose
Valuing Equity Shares
3 August 2017
Teaching Note Supplementing Chapter 13
LEARNING OBJECTIVES
1. What determines the value of a stock?
2. How are investors repaid and rewarded?
3. What determines the discount rate?
4. How can we forecast dividends accura