Running head: BE ETHICAL
Ethic always as a measurable criteria to determine peoples character. In my eyes, ethic does not
have clearly limitation, it depends on situation where you are located. Ethic is really important
part in our life because it can con
Solutions to Mid-term Examination 1, winter 2009
FNCE 3P96: Financial Theory
Instructor: Unyong Pyo
Problem 1:(25 marks)
a. Graphically demonstrate the Fisher separation theorem for the case where an individual ends
up lending in the financial markets. La
FNCE 3P96 Mid-term Exam 2, Winter 2009 Section 1
1. (25 marks) You have estimated the following probabilities for earnings per share of
companies A and B:
Probability A B
0.1
0.5 1.0
0.2
1.5 1.5
0.4
2.0 2.5
0.3
2.5 3.0
(a) Calculate the mean and variance
CHAPTER16
FINANCIAL LEVERAGE AND CAPITAL STRUCTURE
POLICY
Learning Objectives
LO1 The effect of financial leverage on firm value and cost of capital.
LO2 The impact of taxes and bankruptcy on capital structure choice.
LO3 The essentials of the bankruptcy
Chapter 18
Short-term Financing and Planning
Lecture Agenda
Cash and Net Working Capital
Operating Cycle and Cash Cycle
Short-term Financial Policy
Short-term Borrowing
Short-term Finance
Primarily concerned with the analysis of decisions affecting curren
Chapter 24
Enterprise Risk Management
Enterprise Risk Management
Process of identifying and assessing risks and then seeking to mitigate
potential damage where financially sensible.
Types of risk include:
Hazard (e.g. natural disasters, fire, theft)
Fin
GOODMAN SCHOOL OF BUSINESS
BROCK UNIVERSITY
Department of Finance, Operations, and Information Systems (FOIS)
FNCE 3P93, Corporate Finance II
Fall 2017 Duration 2
Section 6 Mon/Thu 3:30p to 4:50p
Geoff Hoover [email protected]
TA307
TA366
Course Descrip
Question 9. (20 marks)
A.
Use Figure 1 that shows the net present value profile of two projects W and Y to answer the
following questions:
1. What is the internal rate of return on project Y? (2 marks)
2. Determine the approximate discount rate at which y
Net Present Value (NPV) and
Other Investment Criteria
2016 - Mohamed A. Ayadi
Learning Objectives
Describe the capital budgeting decision
Explain and compute the various capital
budgeting investment criteria such as the
NPV, PB, DPB, AAR, IRR, and PI
Des
Risk and Return III:
Efficient Portfolios & CAPM
2016 - Mohamed A. Ayadi
Learning Objectives
Describe and construct the efficient frontier
Construct the efficient frontier with one risk-free asset
Define and use the Capital Market Line (CML)
Describe diff
Interest Rates
2016 - Mohamed A. Ayadi
Lecture Outline
Interest Rates
Compounding
APR vs. EARs
2016 - Mohamed A. Ayadi
2
Simple Interest
Interest is only paid on the initial balance
Example: Invest $100 for two years, at 10% simple
interest
Interest in y
Project Analysis and
Evaluation
2016 - Mohamed A. Ayadi
Learning Objectives
Understand the basic problem associated with the
NPV estimates
Conduct a scenario analysis
Perform a sensitivity analysis
Understand a simulation analysis
2016 - Mohamed A. Ayadi
Bond Valuation & Analysis
2016 - Mohamed A. Ayadi
Learning Objectives
Describe the typical features of bonds
Compute fair prices of zero-coupon and coupon
bonds
Calculate yields given bond prices, coupons, and
face value
Explain difference between real an
Analyzing and Valuing
Common & Preferred Stocks
2016 - Mohamed A. Ayadi
Learning Objectives
Describe the typical features of common stocks
Understand how stock prices depend on future
dividends and dividend growth
Calculate stock prices using the constant
Introduction to Risk & Return
2016 - Mohamed A. Ayadi
Learning Objectives
Defining and calculating returns
Defining and measuring financial risk
Describe and understand the risk-return
relationship
Understand the concept of capital market
efficiency
2016
Introduction to Corporate
Finance
2016 - Mohamed A. Ayadi
Learning Objectives
Know the basic types of financial management
decisions and the role of the financial manager
Know the financial implications of the different forms
of business organization
Know
Cost of Capital
2016 - Mohamed A. Ayadi
Learning Objectives
Explain why the cost of capital is an opportunity
cost and not the historical cost of funds
Distinguish among the cost of capital, and the
required returns to equity and debt, and identify
the ma
Making Capital Investment
Decisions: Estimating Cash
Flows I
2016 - Mohamed A. Ayadi
Learning Objectives
Understand how to determine the relevant cash
flows for various types of proposed
investments
Understand the various methods for computing
operating
Making Capital Investment
Decisions: Estimating Cash
Flows III
2016 - Mohamed A. Ayadi
Choosing between Projects with
Different Lives
Often a firm will consider installing different types of
equipments that accomplish the same task
Part of the decision m
Risk and Return II:
Portfolio Theory &
Diversification
2016 - Mohamed A. Ayadi
Learning Objectives
Calculate the return of a portfolio
Compute the portfolio risk of two stock
portfolio
Explain how individual securities affect
portfolio risk
2016 - Mohame
Mortgages & Loans
2016 - Mohamed A. Ayadi
Introduction
Loans and mortgages often involve blended payments, where
each payment is a combination of interest and principal so that
the loan is amortized, or paid off in full, in an orderly fashion
with equal p
Project Evaluation Example
A steel company is considering adding a new blast furnace
A $1M feasibility study just completed has found the following:
Adding the new blast furnace will result in $50M in new sales per year
and will save $100M per year in exp
Example 1
On January 1, you are considering purchasing the Bank of Montreal (BMO)
BMO pays a dividend of 50 cents per share every quarter
You expect to sell BMO after you collect the 4th quarter dividend in December
for a price of $45
The annual required
5. CAPITAL BUDGETING UNDER UNCERTAINTY
Objectives: After reading this chapter, you should
1. Understand the basic ideas of discrete and continuous probability distributions.
2. Apply the concepts of probability to the problems of financial decision-making
1. Analytical Tools
Objectives: After reading this chapter, you will be able to
1. Solve linear and quadratic equations, system of linear equations
2. Use geometric series in financial calculations
3. Understand the basic concepts of statistics
4. Use Wol
4. CAPITAL ASSET PRICING MODEL
Objectives: After reading this chapter, you should
1. Understand the use of beta as a measure of risk for a stock.
2. Understand and be able to apply the capital asset pricing model in financial modeling.
4.1
Beta
In the sec
2. VALUATION OF Debt and Equity
Objectives: After reading this chapter, you should be able to:
1. Understand the role of stocks and bonds in the financial markets.
2. Calculate value of a bond and a share of stock using proper formulas.
2.1
Acquisition of
3. BASICS OF CAPITAL BUDGETING
Objectives: After reading this chapter, you should be able to
1. Apply the Net Present Value rule to determine acceptable projects for a corporation.
2. Calculate the impact of depreciation and taxes on the NPV of a project.
3. VALUATION OF Bonds AND Stock
Objectives: After reading this chapter, you will
1. Understand the role of bonds in financial markets.
2. Distinguish between different types of bonds, such as zero-coupon, perpetual, discount,
convertible, and junk bonds a
1. Finance and Analytical Tools
Objectives: After reading this chapter, you will be able to
1. Get an overview of finance and basic algebra.
2. Use geometric series in financial calculations.
3. Understand the basic concepts of statistics.
4. Use Excel, M