Interest Rates and Inflation
APR vs. EAR, and changing interest rate periods
Converting rates to different time periods
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
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