Examples that show the calculation of future value using both the formula and the Excel function
Example using the formula
The formula uses the PV as the capital, and one plus the interest rate raised to the power of the
number of future periods as the mu
Characteristics of Bonds and Bond Valuation
I. A bond is a contract between an issuer (borrower) and an investor (lender or bondholder) to
make periodic payment of interest and the return of principal at specific dates.
1. Bonds carry a par or stated valu
The Valuation of Stocks
This chapter extends our analysis of valuation. Specifically, we look at methods to value the
common stock of a firm. As you go through this material think about why common stock
valuation is important and who would be interested i
FNCE 4000 Chapter 6 In-Class-Exercise (ICE)
Partner:
Partner:
Partner:
1) J. Harper Inc.'s stock has a 50% chance of producing a 30% return, a 30% chance of producing a 10% return, and
a 20% chance of producing a -20% return. What is Harper's expected ret
a. Use the data given to calculate annual returns for Goodman, Landry, and the Market Index, and then calculate
average returns over the five-year period. (Hint: Remember, returns are calculated by subtracting the beginning
price from the ending price to
A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
B
D
E
G
H
1/12/2015
Rework Problem 7-19. Taussig Technologies Corporation (TTC) has been growing at a rate of 20% per year in recent
years. This same growth rate is expected to last for another 2 years (g1 = g2 = 20%).
a
INPUTS USED IN THE MODEL
P0
$50.00
Net Ppf
$30.00
Dpf
$3.30
D0
$2.10
7%
g
B-T rd
10%
0.83
Gao's beta
Market risk premium, RPM
6.0%
Risk free rate, rRF
6.5%
45%
5%
50%
35%
10%
Target capital structure from debt
Target capital structure from preferred stock
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.6754722635
R Square
0.4562627787
Adjusted R Square
0.2750170383
Standard Error
0.2681211091
Observations
5
ANOVA
df
Regression
Residual
Total
Intercept
X Variable 1
1
3
4
SS
MS
F
Significance F
0.180971108
Chapter 5. Bonds, Bond Valuation, and Interest Rates
A 10-year, 6% semiannual coupon bond with a par value of $1,000 may be called in 3 years at a call price of $1,030. The bond sells
for $1,050. (Assume that the bond has just been issued.)
Basic Input Da
FNCE 6090
Chapter:
Problem:
12
10
Start with the partial model in the file Ch12 P10 Build a Model.xls on the textbooks Web site, which contains the 2013
financial statements of Zieber Corporation. Forecast Zeiber's 2014 income statement and balance sheets
A
1
2
3
4
5
6
7
8
9
10
11
12
B
FNCE 6090:
Chapter:
Problem:
C
D
E
F
H
9/14/2016
7
22
Hamilton Landscaping's dividend growth rate is expected to be 30% in the next year, drop to 15% from Year 1
to Year 2, and drop to a constant 5% for Year 2 and all subseq
FNCE 4000: Week #3
January 31, 2017
We are in the business of building successful futures.TM
1
Admin
Homework systemstill work in
process
Ch 5 Build-a-Model (BAM)
Assignment due Thurs, February 2
Slides and In-Class Exercises (ICEs)
will be posted
Ch 7 BA
FNCE 4000 Chapter 5 Class Exercises (part A)
Name: _
Partner(s):_
1)The Morrissey Company's bonds mature in 7 years, have a par value of
$1,000, and make an annual coupon payment of $70. The market interest
rate for the bonds is 8.5%. What is the bond's p
Time Value of Money Challenge Problems
1.) You have won the Florida state lottery. Lottery officials offer you the choice of two payout
plans. The first would pay you $10,000 one year from now. The second would pay you
$20,000 five years from now. Which a