TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 13: Capital Structure
Contents
Introduction
Capital structure
The Modigliani and Miller propositions I and II
with no tax
The effect of taxes
The effect of potential bankruptcy
The trade-off
BQC's Project starting from 2012
Cash flows based on straight line depreciation
Part 1. Input Data (in thousands of dollars)
Part 1. Input Data (in thousands of dollars)
Building cost
Equipment cost
Net operating WC
First year sales (in units)
Growth rate
+
TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 9: Cash Flow Estimation and Project Risk Analysis
Contents
Introduction
Identifying the relevant cash flows
The definition of free cash flow
The components of free cash flow
Incremental cash flo
TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 4: Risk and Return: Part II
Contents
Introduction
The assumptions of capital market theory
The market portfolio
The capital market line
Diversification
Diversifiable and non-diversifiable risk
The
TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 3: Risk and Return: Part I
Contents
Investment characteristics of assets
Return and risk in a portfolio context
Alternative measures of risk
The definition of a portfolio
The return, expected retu
TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 2: The Cost of Debt Capital: Valuing Bonds
Contents
Introduction
Bond valuation
The relationship between the coupon rate, discount rate and price relative to par
The relationship between bond matu
TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 1: An Introduction to Corporate Finance
Contents
What is finance?
What is corporate finance?
The balance-sheet model of the firm
Capital budgeting
Capital structure
The firm and the financial mark
+
TCHE321 CORPORATE FINANCE
Dr. Nguyen Thi Hoang Anh
Lecture 8: Capital Budgeting
Contents
The basics of capital budgeting
Payback period
Discounted payback period
Net present value
Profitability index
Internal rate of return
NPV and IRR compared
Multiple
T wo investment projects
Year
0
1
2
3
4
Cash flow
B
-$1,000.00 -$1,000.00
$500.00
$100.00
$400.00
$300.00
$300.00
$400.00
$100.00
$675.00
A
Payback period
Project A
0
-$1,000.00
-$1,000.00
2.33
Cash flow
Cumulative cash flow
Payback period
Year
2
$400.00
1/4
Please choose ONE answer for each question.
1.
A coupon bond that pays interest annually has a par value of $1,000, matures in 4 years, and has a
yield to maturity of 10%. What is the value of the bond today if the coupon rate is 8%?
A) $924.18.
B) $9
TCH321 CORPORATE FINANCE
MOCK EXAM
Time: 1 hour 30 minutes
The exam lasts 1 hour and 30 minutes and consists of 5 questions.
Approved calculators are permitted. You are not allowed to use Excel.
This is a closed book exam. You are NOT permitted to access