Group-7
Project Part I: Analysis of Market Reaction to Oracle Corp. and PeopleSoft Merger
Group Members: Jeswin John, Irina Nedelcu, Erik Springer, Leila CushinQINIc'KZm/vroc
Background
Oracle Corp. (ORCL) listed on the NYSE and PeopleSoft (PSFT) listed o
FIN 325: Financial Institutions and Markets
Practice Midterm Exam with Suggested Answers
Professor Greg Nini
Rules
Do not start the exam until instructed to do so.
You are not allowed to use any notes, books, or any other material. Calculators are allowed
FIN 325: Financial Institutions and Markets
Practice Quiz #1 with answers
Professor Greg Nini
Rules
Do not start the exam until instructed to do so.
You are not allowed to use any notes, books, or any other material. Calculators are allowed.
You will have
Financial Institutions and Markets
Practice Problems Without Answers
Interest Rates
Professor Greg Nini
1. Suppose that Bill Jobs creates a new use for the internet that leads to a business cycle
expansion. Accordingly, firms increase production as they h
CHAPTER10
CONCHREPUBLICELECTRONICS,
PART1
This is an in-depth capital budgeting problem. The initial cash outlay at Time 0 is the cost of the new
equipment, $40,500,000. The sales each year are a combination of the sales of the new smart phone,
the lost s
Time Value of
Money
(TVM)Practicum
Understanding the Basics
1
2
The Basics
Present
Value earlier money on a time line
Future Value later money on a time line
Interest rate exchange rate between
earlier money and later money
Discount
rate [determines w
Capital Budgeting #4
The Loose Ends
1
Cash FlowsThey change everything
CFs are the RELEVANT INPUTS
The STAND ALONE PRINCIPLE
Project Incremental CFs
2
Whats In & Whats Out
IN
Opportunity Costswhat do you give up?
Side-Effectswhat else changes?
EROSION of
Stock Values and
Market Issues
What is a share worth?
Are we (and does the market) look at the right stuff?
Key Concepts and Goals
Understand
how stock prices depend
on future dividends and dividend
growth
Be able to compute stock prices
using the dividen
What in it for me?
Ratio Analysis
Putting all that
Accounting Data
to Use
1
2
Common Sizing
Creating Equal Footing
Compare
Look
Track
companies of Different Sizes
for trends in one company
growth/look for warning signs
Balance
Income
Sheet (Assets an
Finance and
Accounting
Shall the twain ever meet?
Viva la Difference!
1
2
The Basics-Again
Time Value of Money
Get now/Pay later
Investment Opportunities
Present Value/Future Value relationship
Inflation (?)
Risk-Return Trade Off
Maximize Return at a give
MORE CAPITAL
BUDGETING BASICS
Beyond NPV, IRR & PB
1
Review All Methodologies
Payback (PB)
Discounted Payback (DPB)
Net Present Value (NPV)
Internal Rate of Return (IRR)
Modified Internal Rate of Return (MIRR)
Profitability Index (PI)
Average Accounting R
More TVM
Concepts and Applications Keep
Coming
Discounted Cash Flows (DCFs)
Annuities & Uneven Cash Flows
1
2
Multiple Cash Flows
GET
OUT THAT CALCULATOR!
Now
we include more than a single input
(CF) in the TVM calculation
This
modification has applica
CAPITAL BUDGETING
RULES & PROBLEMS
The Basics
1
Review - the Methods
Payback (PB)
Discounted Payback (DPB)
Net Present Value (NPV)
Internal Rate of Return (IRR)
Modified Internal Rate of Return (MIRR)
Profitability Index (PI)
Average Accounting Return (AA
5/18/2015
Slides #12:
Agency Problems
Fin 302: Prof Lowry
Outline
1.
Shareholders would like firm to maximize
shareholder value
2.
take all positive NPV projects
Do managers try to take all positive NPV
projects?
Why wouldnt they?
What can we do to align
Notes #10:
Raising Capital
FIN 302: Professor Lowry
Outline
Raising debt financing
Public debt
Private debt
Raising equity financing
Venture capital
Initial Public Offering (IPO)
Seasoned Equity Offering (SEO)
Public issues of Long-term debt
Bonds
4/27/2015
Notes #8:
Real Options
Fin 302: Professor Lowry
17-1
ChapterOutline
1. Motivation
2. An overview of options in the case of stocks
3. Real Options the idea
4. Introducing Real Options into the examples from prior
handout
17-2
Motivation
1. Motiva
4/24/2015
Notes #6:
Capital Budgeting cash flows
Fin 302: Professor Lowry
17-1
ChapterOutline
1. Motivation: Why is capital budgeting important?
2. Formula for computing free cash flows (FCFs)
Identify Incremental Cash Flows
EBIT
Depreciation, Deprecia
4/27/2015
Notes #7:
Capital Budgeting Part 2
Sensitivity Analysis, and
Incorporating uncertainty
Fin 302: Professor Lowry
17-1
ChapterOutline
1. Sensitivity Analysis
2. Incorporating Uncertainty: What if we are unsure about
future state of the world?
A c
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1
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2
3
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4
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Chapter 5
Question 1
You manage an equity fund with an expected risk premium of 13.2% and a standard
deviation of 46%. The rate on Treasury bills is 4.6%. Your client chooses to invest $105,000
of her portfolio in your equity fund and $45,000 in a T-bill
Chapter
13
Equity Valuation
Bodie,Kane,andMarcus
EssentialsofInvestments
TenthEdition
13.1 Equity Valuation
Book Value
Net worth of common equity according to a
firms balance sheet
Limitations of Book Value
Liquidation value: Net amount realized by se
6/8/2015
Review: FIN302
Fin 302: Professor Lowry
17-1
OutlineofFirstThird
Review of present value
Review of Beta, CAPM, WACC
Relation between risk and leverage
What types of companies choose higher leverage
If a single company increases its leverage, how
FIN 321 Investment Securities and Markets
Summer 2016
Instructor:
Eric Steager
E-mail:
els95@drexel.edu
Office hours: by appointment only
Class:
Section 001: 6:00 to 9:50pm, Tuesday, Gerri C LeBow Hall 409
I. Overview of the Course: This course provides a
Chapter 5
Question 1
You manage an equity fund with an expected risk premium of 13.2% and a standard
deviation of 46%. The rate on Treasury bills is 4.6%. Your client chooses to invest $105,000
of her portfolio in your equity fund and $45,000 in a T-bill
Rewind
Financial markets spread consumption habits,
reallocate capital and provide information.
Greater the risk the greater the return
Risk-free rate: Rate of return that can be earned with certainty
Risk premium: Expected return in excess of that on
Syllabus for FIN302: Intermediate Corporate Finance
Revised 3/18/2016
Department of Finance, LeBow College of Business
FIN 302 (Sections 2 and 3), Spring 2016
Intermediate Corporate Finance
1.
Prof. Michelle Lowry
E-mail: michelle.lowry@drexel.edu
Phone: