INTRODUCTIONTOFINANCIALMANAGEMENT
(33:390:300:1)
Fall2013
MThNewBrunswick10:2011:40am
Professor: LauraMattia,CFP,MBA
OfficeHours:Byappointment
Email:[email protected]
WEBSITE:HTTP:/BLACKBOARD.RUTGERS.EDU
There is a class website, where the syllabus
Chapter 13 Homework Questions
1. You own a portfolio that has $3,900 invested in Stock A and $4,900 invested in Stock B. If the expected
returns on these stocks are 11 percent and 14 percent, respectively, what is the expected return on the
portfolio?
2.
Chapter 9 Homework Questions
1. A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has
the following cash flows:
Year
0
1
2
3
Cash Flow
$28,400
12,400
15,400
11,400
What is the NPV for the project if the
Chapter 3 Homework Questions
1. Perry, Inc., has a total debt ratio of 0.41. What is its debtequity ratio?
What is its equity multiplier?
2. You are given the following information for Shinoda Corp.:
Decrease in inventory
Decrease in accounts payable
Incr
Chapter 6 Homework Questions
1. You want to buy a new sports coupe for $91,500, and the finance office at the dealership has quoted
you a 7.3 percent APR loan for 72 months to buy the car.
What will your monthly payments be?
What is the effective annual r
Chapter 10 Homework Questions
1. Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset
investment of $2.85 million. The fixed asset will be depreciated straight-line to zero over its three-year tax
life, afte
Chapter 2 Homework Questions
1. The 2010 balance sheet of Marias Tennis Shop, Inc., showed long-term debt of $2.7 million, and the
2011 balance sheet showed long-term debt of $2.9 million. The 2011 income statement showed an
interest expense of $95,000.
W
Chapter 12 Homework Questions
1. Suppose a stock had an initial price of $86 per share, paid a dividend of $1.80 per share during the
year, and had an ending share price of $94.
Compute the total percentage return.
2. Suppose a stock had an initial price
Chapter 14 Homework Questions
1. The Zombie Corporations common stock has a beta of 1.9. If the risk-free rate is 5.9 percent and the
expected return on the market is 13 percent, what is the companys cost of equity capital?
2. Sixx AM Manufacturing has a
Future Value One Cash Flow
Present Value
Interest/Discount Rate
Number of Periods
Future Value
$1,000
0.05
5
1276.28 =B2*(1+B3)^B4
$1,276.28 =FV(B3,B4,-B2,1)
Example 2
Future Value One Cash Flow
Present Value
Interest/Discount Rate
Number of Periods
Futur
Financial
Management
LECTURE 11A: BASICS OF DERIVATIVES
FRANCIS NG
1
Definition of Derivative
A derivative instrument is not a security like a bond or a stock.
Rather, it is a contract or agreement between 2 parties.
One party sells the derivative cont
Financial
Management
LECTURE 10: STOCK VALUATION MODELS
FRANCIS NG
1
Stock Valuation Models
Unlike bonds, stocks are harder to evaluate because of the
uncertainty in a companys future earnings.
This chapter shows 3 fundamental models used to arrive at t
Financial
Management
LECTURE 11B: BASICS OF DERIVATIVES
FRANCIS NG
1
Derivatives with Insurance feature
Forward contract does not require an exchange of upfront cash
because the NPV to both parties is zero at initiation.
There are forward contracts that
Financial Management
Chapter 1 Introduction to Finance
This chapter gives a broad overview of how financial management is essential for any
successful business. In fact, the same principles that have been used by corporations for
generations can be transf
Financial Management
Chapter 9 Bond Valuation
This chapter first discusses the various features of a standard bond and how bond prices
are affected by market interest rates. It then show the application of the PV of Annuity
formula to bond pricing. An int
1
Original Situation
FEDERAL RESERVE
Assets
Reserves due to / owned by JPM Chase Bank 200
Reserves due to / owned by Pittsburgh Natl Bank 120
JPM CHASE
Customer Loans
5,000
Securities 10,000
Reserves at Fed
200
Cash
100
Demand Deposit due to Bloomingdales
INTRO TO FINANCE
Homework III
I
A company borrows $5 million from a bank for two weeks at 3%. How much interest is owed?
A company borrows $5 million from a bank for six months at 4% beginning February 5. How
much interest is owed?
II
Suppose the borrowin
Course Number: 33:390:300:B6
Course Title: Financial Management
Ron Richter Assistant Professor of
Professional Practice
Summer 2017
Rutgers School of Business 100 Rock
Room 5085
Tuesday and Thursday 6:00 pm - 10:00 pm
Rutgers Business School
732-672-6979
Chapter 4 - Time Value of Money: Valuing Cash Flow Streams
I.
Valuing a Stream of Cash Flows
A. Stream of Cash Flows - a series of cash flows lasting several periods
B. Applying the Rules of Valuing Cash Flows to a Cash Flow Stream
B.1.
Rule 1 - Only valu
Chapter 3 - Time Value of Money: An Introduction
I.
3.1 Cost-Benefit Analysis A. Role of the Financial Manager
A.1.
The financial manager should make decisions to increase the value of the firm to its investors - For
good decisions, the benefits exceed th
Chapter 2 - Introduction to Financial Statement Analysis
I.
2.1 Firms Disclosure of Financial Information
A. Financial Statements - accounting reports issued by a firm periodically that present past performance
information and a snapshot of the firms asse
Chapter 1 - Corporate Finance and the Financial Manager
I.
1.1 Why Study Finance?
A. All financial decisions in your personal life and inside a business are tied together by one powerful concept Valuation Principle.
B. Valuation Principle - shows how to m
Chapter 5 Homework Questions
1. Solve for the unknown number of years in each of the following:
Present Value
$
540
790
18,200
21,300
Years
Interest Rate Future Value
9%
$
1,317
10
1,743
17
277,707
15
414,506
2. Assume the total cost of a college educatio