Name: _
Chapters 7 Handout
Bond Valuation and Rates of Return
1.
If investors require 6% on a zero-coupon bond with a $1,000 face value and 6 years to
maturity, what is the price that this bond will sell for today in the marketplace?
Answer: $ 704.96
2.
I
Prof. Wagonner
Cheyenne Pitts
Concept Review Questions
Ch. 8: Risk and Rates of Return
1. A stocks risk can be considered in two ways: (a) on a stand alone basis, or (b)
in a portfolio context, where a number of stocks are combined and their
consolidated
Name: _
Date: _
BUS 301 - Concept Review Questions
Chapter 4: Analysis of Financial Statements
1. As described in the text, identify three groups that use ratio analysis and the purpose of analysis
for each.
a.
b.
Managers- to help analyze, control, and i
Name: _
Date: _
BUS 301 - Concept Review Questions
Chapter 2: Financial Markets and Institutions
1. What are the primary characteristics of well-functioning financial markets?
In a well-functioning economy, capital flows efficiently from those with surplu
Financial Management I (BUS 301) Study Guide - Exam 3
This outline is intended only as a study guide. It is not necessarily an all-inclusive depiction
of the exam content.
Chapter 5: Time Value of Money
o Calculation oriented problems: Be able to calculat
Concept Review Questions
Ch. 7: Bonds and Their Valuation
Key Terms
Par Value
Current Yield
Original Issue
Discount
Convertible Bonds
Coupon Rate
Capital Gains Yield
Price Risk
Discount Bond
Yield Spread
Reinvestment Risk
Premium Bond
Call Option
Interest
Chapters 9 Handout
Common & Preferred Stock Valuation and Required Return
1.
Twilight Companys preferred stock pays a dividend of $10 per year. If investors require an 8%
rate of return on this stock, its value is:
Answer: $ 125.00
2.
What is the markets
NAME: _
Concept Review Questions
Ch. 9: Stocks and Their Valuation
1. To determine whether a stock is fairly priced, an analyst must first estimate the
stocks true value, or its _ _.
2. A stock should be purchased if its current price is _ its estimated
i
Chapter 5 Handout
Time Value of Money
Supplemental Problems
1.
You estimate that a particular investment is expected to be worth $150,000 three years from
today. If the riskiness of the expected future value of this investment is such that you require a
5
Name: _
Date: _
BUS 301 - Concept Review Questions
Chapter 3: Financial Statements, Cash Flow and Taxes
1. Describe the importance of accurate financial reporting to suppliers of capital.
The importance of giving accurate financial reporting to suppliers