BUSS207- Financial Management
Problem Set #1, Due by Wednesday, April 14
Answer the following questions. Show all your work clearly.
1. [20 points] Use the following information for Old World, Inc., to answer the questions below. Assume
that the tax rate
KMB550 Final Exam, Fall 2013
1. Do NOT open the exam until told.
2. Make sure you are sitting on the assigned seat.
3. This examination is closed book and closed notes. Put all your belongings under your
How to value Bonds
Interest rate risk and default Risk
Effects of inflation on interest rates
7.1 Valuing Bonds
Par value (face value):
The principal amount of a bond that is repaid at the end of the ter
Practice Questions for Payout Policy
What are some theories that try to explain dividend policy?
Stock prices tend to go up when a company increases its dividend.
Why does this happen?
Does the above
Practice Questions for Capital Budgeting
1. Thomson Electric Systems is considering a project that has the following
cash flow and WACC data. What is the project's NPV?
WACC = 10%
2. Edison Electric Systems
PRACTICE QUESTIONS FOR the Analysis of Financial
*Question number starts at 10.
The balance sheet and income statement shown below are for Byrd Inc,
and the data are to be used for questions 10 through 23. (all numbers
are in millions unless ot
Practice Questions for The Cost of Capital
Assume that you are a consultant to Thornton Inc., and you have been
provided with the following data:
r RF = 5.5%; RPM (Market risk
premium)= 6.0%; and b = 0.8. What is the cost of equity based on the
PRACTICE QUESTIONS FOR Time Value of Money
1. What would the future value of $100 be after 5 years at 10% compound
2. Suppose a U.S. government bond promises to pay $2,249.73 three years
from now. If the going interest rate on 3-year government
Financial Statements and Cash Flow
Understanding the information in financial statements
Book value vs. market value
How to determine a firms cash flow
2.1 Balance Sheet
A snapshot of firms assets and liabilities at a specific point
Review Session for Financial Derivative Midterm
In the binomial problem below, price a call option on the stock with exercise price X =
Option exercise price
BUSS207 (06): Financial Management - Fall 2015
Na, Hyun Seung
Office: 528 Hyundai Motor Hall
Class venue: B306 Hyundai Motor Hall
Class time: 10:30 ~ 11:45 am on Mondays and Wednesdays
Office hours: 2:
Introduction to Financial Management
Basic questions in finance
Benefits and costs of corporations as a business organization
Roles of financial markets
1.1 Basic questions
What is Finance about?
Corporate finance: finance for co
Chapter 8: Stock Valuation
Computing stock prices using the dividend growth model
Features of common and preferred stocks
8.1 Valuing stock
Cash Flows to Stockholders
If you buy a share of stock, you can receive cash in two ways.
The company pays
Topic 5. Merger & Acquisition
Lecturer: Kang, Sang Koo
M&A and sources of synergies
market efficiency and M&A
reasons for inefficiencies
- free-rider problem (Grossman & Hart 80)
- misvaluation (Shleifer & Vishny 2003)
- hubris h
Practice Questions for Risk and Rates of Return
1. T. Martell Inc.'s stock has a 50% chance of producing a 30% return,
producing a -25% return.
What is Martell's expected return?
2. An investor ha
PRACTICE QUESTIONS FOR Interest Rates
1. Suppose the interest rate on a 1-year T-bond is 5.0% and that on a
2-year T-bill is 6.0%.
Assuming the pure expectations theory is
correct, what is the market's forecast for 1-year rates 1 year from
Corporate Growth Path Strategy
Prof. D. Kim, KUBS
Discussion and Learning Points
Dynamics of Corporate Growth
Principles of Corporate Growth
Path of Corporate Growth and Strategies
Critical Success Factors of Corporate Growth
Outsourcing has become strategic-yet many executives
remain unprepared. A new era of capability sourcing will
trigger organizational redesign and require a new set of
to the Core
by Mark G
(Due by September 13, 2016)
Please solve the following questions. You should work in a group in completing this assignment.
Each group will turn in one solution to the assignment and everyone in the group will rece
Introduction to Valuation:
The Time Value of Money
5.1 Future Value and Compounding
(FV: future value)
5.1 Future Value and Com
Net Present Value and
Other Investment Criteria
(NPV: net present vale)
(discounted payback period)
(AAR: average accounting return)
(IRR: internal ra
PRACTICE QUESTIONS FOR Financial Statements
1. Superior Medical System's 2005 balance sheet showed total common
equity of $2,050,000.
The company had 100,000 shares of stock
outstanding which sold at a price of $57.25 per share. By how much
did the firm's
PRACTICE QUESTIONS FOR Stocks and Their Valuation
1. If D0 = $2.00, g (which is constant) = 6%, and P 0 = $40, what is the
stocks expected dividend yield for next year?
2. A stock is expected to pay a dividend of $1 at the end of the year.
The required ra
PRACTICE QUESTIONS FOR Bonds and Their Valuation
1. The Carter Company's bonds mature in 2 years have a par value of
$1,000 and an annual coupon payment of $80.
The markets required
rate of return for the bonds is 9%.
What is the price of these
Practice Questions for Capital Structure
1. Brandi Co. has an unlevered beta of 1.10.
The firm currently has no
debt, but is considering changing its capital structure to be 30% debt
and 70% equity.
If its corporate tax rate is 40%, what is Brandi's
Making Investment Decisions
When we estimate cashflow, we have to
determine whether its relevant or irrelevant.
program income statement, balance sheet . etc
-> analyze projects projected cash flow.
Evaluating NPV Estimates -> next chapter
Two different methods to estimate the discount
Method 1: Risk/return of stock
Relationship between risk and return -> they
cash flow stream -> dividend payment
using the estimated risk level, find the return