Chapter 4
Financial Statement Analysis
In ACC 151, we talked about the basic financial statements which are responsible for
reporting the over operational results of a company.
In this chapter we are going to take the statements a step further, we are now
CHAPTER 7 & 8
1) Acme Corp. has preferred stock with an annual dividend of $3.13. If the required return o
a) What is its price?
Po= (3.13/0.085) = 36.82
b) Using the price, what is Acme's divided yield?
(3.13/36.82) = 8.5%
2) Acme Corp. has a dividend yi
Auto
(A)
Economy
Probability
Return (ri)
0.33
0.33
0.33
(A * B)
Expected Rate
of Return
Sum = (r
'hat')
(ri - r 'hat')
squared
(ri - r 'hat')
squared *
Probabilit
y
-8.00%
5.00%
18.00%
Recession
Average
Boom
Total
(B)
(ri - r 'hat')
r 'hat'
1.00
Average
V
Auto
(A)
Economy
Probability
Return (ri)
0.33
0.33
0.33
(A * B)
Expected Rate
of Return
Sum = (r
'hat')
(ri - r 'hat')
squared
(ri - r 'hat')
squared *
Probabilit
y
-8.00%
5.00%
18.00%
Recession
Average
Boom
Total
(B)
(ri - r 'hat')
r 'hat'
1.00
Average
V
For the problem below, use the following information about the Sky company.
$ 3.20
$ 55.00
$ 2.10
9%
$ 3.30
$ 30.00
Sky Company's earning per share last year was:
Sky Company's common stock sells for:
Sky Company's dividend last year was:
Sky Company's di
For the problem below, use the following information about the Sky company.
$ 3.20
$ 55.00
$ 2.10
9%
$ 3.30
$ 30.00
Sky Company's earning per share last year was:
Sky Company's common stock sells for:
Sky Company's dividend last year was:
Sky Company's di
Price of common stock:
Number of common shares outstanding:
Market value of common equity=
$51
5500000
$280,500,000
market value of debt
market value of preferred stock
Total market value of the firm=
$96,000,000
$18,000,000
$394,500,000
Weight of Debt fo
Professor Kenneth A. Kavajecz
Whitman School of Management
FIN 256: Corporation Finance
Module 2
Time Value of Money
Focus of Module
This module introduces the concept of Time Value of Money, one of the most fundamental
concepts in all of Finance and one
Syracuse University
Whitman School of Management
Professor Kenneth A. Kavajecz
Finance 256: Corporation Finance
Module 3 Problem Set
1. In Figure 1, the sloping straight line represents the opportunities for investment in the capital
market, and the solid
Diana Azizyan
FIN 256
M003
Professor G. Witt
Notes for 10/5/2016:
End of Chapter 7 for Exam:
Estimating Dividends in the Dividend-Discount Model
Value Drivers
Dividend-Discount Model
Includes an implicit forecast of the firms profitability
Discounted
Diana Azizyan
FIN 256
M003
G. Wit
Notes for 8/29/16 9/14/16
8/29/2016: NO NOTES, JUST WENT OVER SYLLABUS
8/31/2016:
4 Types of firms:
1.) Sole proprietorships: Owner has unlimited personal liability for any of the firms debts. Only one
owner so there a pr
Diana Azizyan
FIN 256
M003
Professor G. Witt
Notes for 9/28/2016:
Yield for Fixed Rate Bonds:
There is an inverse relationship between yield and price
Bonds are based on a promise of repayment. Interest rates change time but
there will always be a repay
Diana Azizyan
FIN 256
M003
Professor G. Witt
Notes for 9/26/2016:
Chapter 5 continued:
After the 2008 recession, the interbank interest rate has gone down to practically zero and
has stayed constant the past couple years. In December 2015, the FED raised
Diana Azizyan
FIN 256
M003
Professor G. Witt
Notes for 11/9/2016:
Systematic Risk & the Capital Asset Pricing Model (CAPM)
The Expected Return of a Portfolio
The Volatility of a Portfolio
Measuring Systematic Risk
Using The Capital Asset Pricing Model
Vol
Name:
Answer Key
FIN 256
SPRING 2012
EXAM #3
SECTION M006
VERSION A
This Exam consists of 17 questions on 13 pages. You are responsible to ensure that
all pages are attached to your exam. All multiple choice questions should be
answered on the scan-tron f
FUTURE VALUE
TABLE A-1
Interest Rate ( r )
Periods (t)
7.00%
7
Future Value Factor
1.6057814765
PRESENT VALUE
TABLE A-2
Interest Rate ( r )
Periods (t)
Present Value Factor
7.00%
7
0.6227497419
PRESENT VALUE ANNUITY FACTOR
TABLE A-3
Interest Rate ( r )
Pe
FUTURE VALUE
TABLE A-1
Interest Rate ( r )
Periods (t)
7.00%
7
Future Value Factor
1.6057814765
PRESENT VALUE
TABLE A-2
Interest Rate ( r )
Periods (t)
Present Value Factor
7.00%
7
0.6227497419
PRESENT VALUE ANNUITY FACTOR
TABLE A-3
Interest Rate ( r )
Pe