Finance 2
Dr. Betty (H.T.) Wu
University of Glasgow Adam Smith Business School
Lecture 3
Additional Materials
Spring 2016
Finance 2
1
What is Financial Distress?
Financial distress is a situation
where a firms operating cash
flows are not sufficient to sa
Finance 2
Dr. Betty (H.T.) Wu
University of Glasgow Adam Smith Business School
Lecture 1
Optimal Capital Structure
In a Perfect Market
Spring 2016
Finance 2
1
Todays Agenda
Capital Structure in a Perfect Market
1. Equity versus Debt Financing
2. Modiglia
Lecture 14
Costvolumeprofit Analysis
Lecture 14: Costvolumeprofit analysis
Objectives: After this lecture, you should be able
to:
Explain the term contribution
Undertake a costvolumeprofit analysis
Understand how such analysis is used to
make sho
Lecture 18
Foreign Exchange Risk II
Last week on Forex
Forex market and structure of exchange rates
Theories underlying international financial
market
Purchasing power parity theory
Interest rate parity theory
Expectations theory
This Week
Open Fish
Lecture 2
Introduction to Statistics
Lecture 2: Statistics
Objectives: After this lecture, you should be able
to:
Distinguish between different types of variables
Explain the difference between descriptive and
inferential statistics
Explain and calcula
Lecture 7
Introduction to Finance and
Accounting
Lecture 7: Introduction to Accounting
Objectives: After this lecture, you should be able to:
Define accounting and its uses in business
Define assets and liabilities and distinguish
between current and no
Lecture 13
Introduction to Management
Accounting & Costing
Financial Accounting Review
Financial Accounting what we studied
The basic financial statements
Structure and components of financial
statements
How financial accounting statements are put
toge
PM065 Seminar 2: Descriptive Statistics
Section A: Lecture Revision Questions Multiple
Choices
1) Distinguish between sample and
population
2) Explain what is meant by descriptive
statistics
3) Distinguish between measures of
dispersion and measures of lo
Lecture 20
Equity Valuation
Introduction
All businesses have to raise cash at the start of
their lives and at regular intervals as they
expand.
What sort of finance is raised by different
businesses?
Debt last week
Owners Capital This week
Owners capi
Lecture 5 Probability
distributions
Previous Lecture : Probability
Objectives:
Describe the concept of probability and
related terminologies
Explain different types of events
Apply probability rules to solve problems
Understand conditional probability
Lecture 9
Financial Statements
Lecture 9: The Financial Statements
Objectives: After this lecture, you should be able to:
Calculate depreciation and understand its
effects on the financial statements
Understand the difference between profit and
cash flo
Lecture 4  Probability
Lecture 4: Probability
Objectives: After this lecture, you should be able to:
Describe the concept of probability and related
terminologies
Explain different types of events
Apply probability rules to solve problems
Understand
Lecture 17
Foreign Exchange Risk
Learning Objectives
Understand the foreign exchange market
Understand the theories underlying the
operation of international financial markets
Understand the different types of risk exposures
Introduction
Forex risk can
Lecture 15
Budgeting
Lecture 15: Budgeting
Objectives: After this lecture, you should be able
to:
Understand the role of budgeting in planning
and controlling business organizations.
Discuss the budgeting process
Differentiate between different types of
Lecture 19
Bond Valuation
Introduction
All businesses have to raise cash at the start of
their lives and at regular intervals as they
expand.
What sort of finance is raised by different
businesses?
Owners Capital Next week
Debt This week
Debt Finance
Lecture 12
Capital Investment Appraisal 2
Lecture 12: Capital Investment Appraisal 2
Objectives: After this lecture, you should be able
to:
Explain and apply NonDCF methods of
investment appraisal to capital investment
decisions
Explain the advantages
PM065 Seminar 1: Financial Mathematics
Getting to know you Introduce yourselves

Get to introduce yourselves
Question to discuss among yourselves:
o You have concluded plans for a holiday to Greece by
the end of your course in a years time. You think
you
PM065 Accounting and Finance
Lecture 1: Course Introduction
Financial Mathematics
Welcome!
Aims of the Module
This module aims to help students to become familiar with
various financial and accounting concepts, models and
techniques so that they may be a
PM065 Seminar 2: Descriptive Statistics
Section A: Lecture Revision Questions Multiple
Choices
1) Distinguish between sample and
population
A sample is a subset of a population. A
population is a list of entities.
2) Explain what is meant by descriptive
s
xi
21 n
22 xi
23 Mean
23 Median
23
24
24
24 Mode
24
24
24
25
25
25
25
26
26
26
27
27
28
29
22
545
24.77
Position 11 and Position 12
Position 11 = 24
Position 12 = 25
Median: (24+25)/2 = 24.5
24
Weekly Pay ()
Less than 320
320330
330340
340350
350360
3
PM065 Seminar 3: Relationship between
variables
Section A: Lecture Revision Questions
1) A sales manager has collected data on
cars to include the following variables:
Car price, car internal volume, engine
capacity, maximum speed and fuel
consumption in
PM065 Seminar 3: Relationship between
variables
Section A: Lecture Revision Questions
1) A sales manager has collected data on
cars to include the following variables:
Car price, car internal volume, engine
capacity, maximum speed and fuel
consumption in
PM065 Seminar 1: Financial Mathematics
Getting to know you Introduce yourselves

Get to introduce yourselves
Question to discuss among yourselves:
o You have concluded plans for a holiday to Greece by
the end of your course in a years time. You think
you
Rank Rank
in
in
Bran Nort Sout
d
h
h
Difference (d)
A
1
2
1
B
4
6
2
C
8
8
0
D
3
1
2
E
6
5
1
F
2
4
2
G
5
7
2
H
7
3
4
d2
1
4
0
4
1
4
4
16
34
% of males
unemployed
Town
(x)
A
9.30
B
10.20
C
13.60
D
8.90
E
5.10
F
6.60
G
12.50
H
5.70
I
8.50
J
4.00
Total
84
Q1: Carlyle and Mullan have both announced IPOs at 40 per share. One is undervalued by
11 and one is overvalued by 6. You plan to buy 1,000 shares of each. In case of an
underpriced issue, there will be rationing and you will receive only half.
What is th
Target Firm Valuation
Dr. Evangelos VagenasNanos
Email: [email protected]
Office: Main Building, 359A
Office Hours: Tuesdays 12:0014:00
How much does firm cost?
How much would you pay to acquire a firm?
Not easy to answer, complic
Sources and Limits of Value
Creation in Horizontal, Vertical
and Conglomerate Acquisitions
Dr. Evangelos VagenasNanos
Email: [email protected]
Office: Main Building, 359A
Office Hours: Tuesdays 12:0014:00
HORIZONTAL MERGERS:
SOURCES
Question 1
In your opinion, which of the stages of the Five Stage
Model would you consider as the most crucial one?
Discuss.
STAGE 1: CORPORATE STRATEGY
DEVELOPMENT
Set targets
Business strategies
Competitive advantage in product markets
Suitable business
Financing the Acquisition
Dr. Evangelos VagenasNanos
Email: [email protected]
Office: Main Building, 359A
Office Hours: Tuesdays 12:0014:00
Main Methods of Payments for
Acquisitions
Cash
Share exchange
A number of bidders shares fo