Question 1
1.
Both New York Stock Exchange and NASDAQ are examples of primary markets.
Answer True False 1 points
Question 2
1.
Free cash flow hypothesis states that an increase in dividend should benefit the
shareholders by reducing the ability of manage
On January 1, 2006, Drexler Company issued a 10-year bond with a 9% coupon, payable annually. The
required rate of return, rd, on this bond at the time of issue was 9%. What is the selling price of the
bond? Assume the par value = $1,000.
coupon PMT
$90.0
FINA 51.521 - SESSION 1 - INTRODUCTION
Three Areas in Finance
A. Corporate Financial Management deals with financial management of non-financial
institutions
FINA6301, FINA6351
B. Investments
FINA6331, FINA6332
1. Securities Analysis involves estimating c
FINA 51.521 - SESSION 3 - FINANCIAL MARKETS AND
INSTITUTIONS
Financial Markets - Definition and Role
financial assets
Financial markets are the market place where _
are traded.
claims
Financial assets are _
on real assets.
Common Stock
Human Capital
- Fin
FINANCIAL MANAGEMENT- SESSION 7 - BOND
VALUATION
Basic Terminology and Notations
A bond is a long-term debt contract issued by a business or
government unit. Under the bond contract a borrower agrees to
make payments of interest and principal on specific
FINA 3301 Session 5 Time Value of Money
1. Future Value and Present Value
Example 1: Future Value of Money
Suppose you had $100 that you deposited in a bank savings account
that paid 5% interest compounded annually. How much would you
have at the end of 1
Chapter 3 Homework
Carolina Eler de Carvalho de Souza
ST 1 Define each of the following terms:
a. Informational Efficiency; economic efficiency
Informational Efficiency: The prices of investments reflect already existing information
and adjust quickly whe
Sample Problems for Exams FINA 51.521 Professor Park
For the next 9 questions suppose the following data:
Cash & M/S
Receivables
Inventories
Fixed Assets
Balance Sheet
30,000
Accruals
80,000
Accounts Payable
90,000
Notes Payable
400,000
L-T Liabilities
Co
Name: Carolina Eler de Carvalho de Souza - ID 754763
Problem 2.4
Coastal Last Year ROE
New Year
Total Debt Ratio
Interest
EBIT
Sales Revenue
Total Assets Turnover
Average Tax Rate
ROE
ROA
3%
60%
$
300.00
$ 1,000.00
$ 10,000.00
2.00
30%
24.50%
9.80%
Soluti
FINA 3301 - Session 8 - COMMON STOCK VALUATION:
Dividend Discount Model (DDM)
Dividend Discount Model (DDM)
Common stock represents an ownership interest in a corporation. If you are a
shareholder who owns a share, then you are entitled to receive dividen
Chapter 4 - Homework
Carolina Eler de Carvalho de Souza
4.5
PV:
$
1,000.00
Rate:
0.14
Nper:
6
Nper:
5
The amount that is worth more at 14% interest is $1,000.00 in hand today.
4.6
PV:
$ 6,000,000.00
FV:
$ 12,000,000.00
The rate of growth was 14.87%
4.11
P
Hints for 8-9 and 8-23
Here, I used similar but slightly different examples to show how to solve 8-9 and 8-23.
8-9
In this problem I used Excel as a calculator.
probability
0.1
0.2
0.4
0.3
r(M)
21
-6
33
22
r(J)
33
-12
38
25
Exp Ret
SD
CV
20.7
14.27
0.69
2
Hints for Chapter 6 - Bond - HW
6-6
This problem is slightly different from the example in the lecture note because in this problem,
we have the semiannual coupon interest payments. You don't have to change the P/YR into 2
Instead, the payments and the in
Hints for HW - Common Stock - Chapter 7 Problems 9, 12, and 19
7-9
This problem is about the use of the constant growth rate DDM.
In using the formula for the constant growth rate DDM, P(0) = D(1)/ cfw_r s - g = D(0)*(1+g) / cfw_rs - g,
make sure that you
Market Review for Interest Rates and the Stock Market
9/15/00 through 11/9/00
Summary
Tracking the stock market and the credit markets has truly been a worthwhile exercise for
me as I continue to learn more about what triggers changes in the marketplace,
CORPORATE FINANCE:
AN INTRODUCTORY COURSE
DISCUSSION NOTES
MODULE #81
SECURITY VALUATION
I. Security Valuation:
Security prices are simply the present value of their (expected) future cash flows discounted at a
rate appropriate for the risk of these cash
An Eight Week Study of the Stock Market and Interest Rates
Purpose
The purpose of this paper is to track the Dow Jones Industrial Average, the NASDAQ, 10-Year bond rates
and 3-Month T-Bill rates over an eight-week period and to draw conclusions on what wa
Question 1
1.
Both New York Stock Exchange and NASDAQ are
examples of primary markets.
Answer
True
False
1 points
Question 2
1.
Free cash flow hypothesis states that an increase in
dividend should benefit the shareholders by reducing
the ability of manage
Question 1
Since the prices of common stock are determined in the financial markets, firms'
managers can make their decisions to maximize the share prices regardless of the
preferences of different holders of these securities.
Selected
Tru
Answer:
e
Corre
FINA 6301 - Prof Park - Answers to Midterm II
1
12
23
34
45
56
T
F
c
b
d
d
2
13
24
35
46
57
T
T
b
c
c
d
3
14
25
36
47
58
T
F
b
b
c
d
4
15
26
37
48
59
T
T
b
b
c
c
5
16
27
38
49
60
F
a
b
c
e
b
6
17
28
39
50
61
F
b
c
b
c
b
7
18
29
40
51
62
T
b
b
c
e
c
8
19
3
Scenario
Base
Best
Worst
Unit sales
300
Variable cost
$14,000
Fixed costs
$200,000
10% more than Base
10% less than Base
10% less than Base
10% less than Base
10% more than Base
10% more than Base
Scenario
Base
Best
Worst
Unit sales
300
330
270
Variable c
8-13
Scenario
Base
Best
Worst
Scenario
Base
Best
Worst
Price
Unit sales
190
Variable cost
$15,000
Fixed costs
$225,000
10% more than Base
10% less than Base
10% less than Base
10% less than Base
10% more than Base
10% more than Base
Unit sales
190
209
171