Topic 6: Interest Rate and Bond
Valuation
Chapter 6
Key Concepts and Skills
Know the important bond features and
bond types
Understand:
Bond values and why they fluctuate
Bond ratings and what they mean
The impact of inflation on interest rates
The
Chapter Outline
1.1 Finance: A Quick Look
1.2 Business Finance and The Financial
Manager
1.3 Forms of Business Organization
1.4 The Goal of Financial Management
1.5 The Agency Problem and Control of
the Corporation
1.6 Financial Markets and the Corporatio
Are you here today?
1. Yes
2. No
7-1
Topic Equity Markets and
Stock Valuation
Chapter 7
What are some possible ways
that firms can finance projects?
Loan or debt.
Debt financing- loans
Investors= stock holders or
equity financing- stocks and shares
Two ty
Topic 6: Interest Rate and Bond
Valuation 4/6/17
Chapter 6
Key Concepts and Skills
Know the important bond features and
bond types
Understand:
Bond values and why they fluctuate
Bond ratings and what they mean
The impact of inflation on interest rate
4-1
Key Concepts and Skills
Be able to compute:
The future value of an investment made today
The present value of cash to be received at some future
date
The return on an investment
The number of periods that equates a present value
and a future valu
2-1
Key Concepts and Skills
Know:
The difference between book value and
market value
The difference between accounting income
and cash flow
The difference between average and
marginal tax rates
How to determine a firms cash flow from
its financial sta
Study Guide for Exam 1
Chapter 1
The different types of business organizations and know the pros and cons of each type
The functions of treasurer as against the controller
Distinguish between working capital, capital budgeting, capital structure managemen
Topic 8 Making Capital
Investment Decisions
Chapter 9
Key Concepts and Skills
Understand how to:
Determine the relevant cash flows
for a proposed investment
Analyze a projects projected cash
flows
Evaluate an estimated NPV
9-2
Relevant Cash Flows
Inc
Lecture 8 - Net present Value & Other Analysis of
Investment Options
Chapter 8
Key Concepts and Skills
Understand:
The payback rule and its shortcomings
Accounting rates of return and their problems
The internal rate of return and its strengths and
we
Are you here today?
1. Yes
2. No
7-1
Topic Equity Markets and
Stock Valuation
Chapter 7
What are some possible ways
that firms can finance projects?
7-3
Firm Financing Options
_
bonds
bills
Notes
E_
stocks
7-4
Key Concepts and Skills
Understand how
Discounted Cash Flow Valuation
Chapter 5
Key Concepts and Skills
Be able to compute the future value of
multiple cash flows
Be able to compute the present value of
multiple cash flows
Be able to compute loan payments
Be able to find the interest rate
4-1
Key Concepts and Skills
Be able to compute:
The future value of an investment made today
The present value of cash to be received at some future
date
The return on an investment
The number of periods that equates a present value
and a future valu
3-1
Key Concepts and Skills
Know:
How to standardize financial statements for
comparison purposes
How to compute and interpret important
financial ratios
The determinants of a firms profitability and
growth
Understand the problems and pitfalls in
finan
2-1
Key Concepts and Skills
Know:
The difference between book value and
market value
The difference between accounting income
and cash flow
The difference between average and
marginal tax rates
How to determine a firms cash flow from
its financial sta
Lecture 8 - Net present Value & Other Analysis of
Investment Options
Chapter 8
Key Concepts and Skills
Understand:
The payback rule and its shortcomings
Accounting rates of return and their problems
The internal rate of return and its strengths and
we