www.swapnotes.com Schroeder Corporate Finance Spring 2003
Amitab Mukerjee
A. VALUATION
PRESENT (What's $10 in 2050 worth now?) - Reasoning: Discounting future returns to present value is the method to determine the value of X amount paid at some

Equity, Debt and Asset Betas
Ct
t
t =0 (1 + r )
T
NPV =
Ct is not known for certain. It is a random variable. It has a probability distribution with a
mean and standard deviation.
Ct = E(Ct) = expected cash flow
r is the appropriate cost of capital. It s

KEY - Exam 1, Version 1, BMGT 340 Spring 2016
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1)Suppose
that three friends of yours have decided to start producing films a few years
ago, and now thing

Chapter 6 Homework
1) Stock A has the following returns for various states of the economy:
State of
the Economy
Recession
Below Average
Average
Above Average
Boom
Probability
10%
20%
40%
20%
10%
Stock A's Return
-30%
-2%
10%
18%
40%
Stock A's expected ret

Unit 6:
1.
Question:Magee
Company's stock has a beta of 1.20, the risk-free rate is 4.50%,
and the market risk premium is 5.00%. What is Magee's required return?
Your Answer:
10.25%
10.50%
CORRECT
10.75%
11.00%
11.25%
InstructorRMagee
Explanation:
= RRF +