What are takeovers?
Why do they happen?
How much should you pay to acquire a company?
Mergers and Acquisitions
When one firm or group of individuals (acquirer) buys another
Merger: when two firms form
Efficient Markets & Behavioral Finance
Text: Chapter 10
Stocks tend to go up. So if you pick randomly, or invest
in the entire market (S&P 500), you will tend to win.
The Cost of Capital
Weighted Average Cost of Capital (WACC)
Text: Chapter 13
Where are we?
Weve been learning how to make good financial
Figure out 1) when and 2) how much cash you
are paying and receiving; discount those ca
What are bonds?
How do you price bonds?
Whats yield to maturity?
What is the yield curve?
How do interest rates affect bond prices?
What is a bond?
A bond is an IOU (I owe you), usually issued by
Beta and required return
The market portfolio (our best risky alternative)
Capital Asset Pricing Model (CAPM)
Text: Chapter 12
What does it mean to require a return?
An investor requires at least as much as he can
Financial Statement Analysis
Learn what financial statements are and how to interpret
Investment Decision Rules (Topic 6)
Decision Rules: NPV vs. IRR vs. Payback Rule
Goal: How to decide whether to invest in a
project. Or in general, how do we make any
Net Present Value (NPV)
We know w
Interest Rates and Inflation
APR vs. EAR, and changing interest rate periods
Converting rates to different time periods
THE UNIVERSITY OF OREGON
CHARLES H. LUNDQUIST COLLEGE OF BUSINESS
Office Hours: Weds 1:00 pm 3:00 pm
and by appointment
Professor Xiaoding Liu
383 Lillis, 542-346-3824
Course website: https:/blac