Tutorial Questions from Week 3 Lecture
Question 1
Superstar Enterprises has bonds on the market making annual payments, with 16
years to maturity, and selling for $87. At this price, the bonds yield 6.8%. What must
the coupon rate be on Superstar bonds? A
2201AFE Corporate Finance
Week 6
Project Analysis and Evaluation
Mid Semester Exam Revision
Reading
Chapter 9
Agenda
Last Two Weeks
Project Analysis and Evaluation
Key Concepts and Skills
Revision for Mid Semester Exam
Next Week EXAM!
Last Week
Capi
2201AFE Corporate Finance
Week 12
Dividends and Dividend Policy
Reading
Chapter 18
Agenda
Last Week
Dividends and Dividend Policy
Key Concepts and Skills
Last Week
Capital Structure
Effect of Financial Leverage
M&M propositions I and II
Case 1 No C
2201AFE Corporate Finance
Week 2
First Principles of Valuation: The Time Value for Money
Reading
Chapter 5
Agenda
Last Week
Time Value of Money
Key Concepts and Skills
Real World Application
Your First Million is the Toughest
Next Week
Last Lecture.
2201AFE Corporate Finance
Week 9
Cost of Capital
Reading
Chapter 17
Agenda
Last Week
Cost of Capital
Key Concepts and Skills
Real World Application
Investors Need A Good WACC
Next Week
Last Week
Expected Returns and Variances
Single asset & Portfo
Answers to the Tutorial Questions from Week 1 Lecture
Question 1
What are the three main issues that corporate finance deals with?
Corporate finance deals with three major issues:
- What long term investments should the firm take on?
In particular decide
Answers for Tutorial Questions from Week 4 Lecture
Question 1
An investment project costs $10000 and has annual cash flows of $2100 for six years.
What is the discounted payback period if the discount rate is zero percent? What if the
discount rate is 5%?
Tutorial Answers from Week 9 Lecture
Question 1
Stock in Parrot Industries has a beta of 1.12. The market risk premium is 7.5% and T-bills are
currently yielding 4%. The companys most recent dividend was $1.50 per share, and
dividends are expected to grow
Answers to Tutorial Questions from Lecture 8
Question 1
Suppose a stock had an initial price of $64 per share, paid a dividend of $1.75 per
share during the year, and had an ending share price of $72. Compute the percentage
total return. What was the divi
2201AFE Corporate Finance Practice Questions for Final Exam
Question 1
The risk-free rate of return is 4% and the market risk premium is 8%. What is the expected
rate of return on a stock with a beta of 1.28?
Answer: 14.24%
Question 2
Assume that Diamond
Answers for Tutorial Questions from Week 12 Lecture
Question 1
On Thursday, 16 July, Patens board of directors declares a dividend of 45 cents per
share payable on Thursday, 20 August, to shareholders of record as of Tuesday 4
August. When is the ex-divid
Tutorial Questions from Lecture 2
Question 1
What happens to the future value of annuity if you increase the rate r? What happens to the
present value?
Question 2
What is the relationship between the present value, interest rate and discount period?
Quest
2201AFE Corporate Finance
Week 7
Some Lessons from Capital Market History
Reading
Chapter 10
Agenda
Last Lecture
Some Lessons from Capital Market History
Key Concepts and Skills
Real World Application
The Non-Normal Fidelity Magellan Fund
Last Lectur