Things to know about weighted
average cost of capital,
Determine the inputs of the firms cost of capital.
Measure cost of debt, preferred and common stock.
Compute a firms market weighted average cost of ca
Things to know about
systematic risk (Ch 12).
Calculate the expected return and volatility (standard deviation) of a
Explain in your own words the relationship between systematic risk
and the market portfolio.
Stock Valuation: A
What you need to know
about stock valuation,
a/k/a Ch 10.
Calculate the value of a stock as the present value of the companys
free cash flows and by applying relative valuation models.
Explain in your own wo
WHAT YOU SHOULD
KNOW ABOUT CHAPTER
1. Calculate net present value (NPV), internal rate of return
(IRR), modified IRR, payback period.
2. Make investment decisions using all decision rules.
3. Explain in your own words how to
CORPORATE FINANCE AND
THE FINANCIAL MANAGER
1. Explain in your own words the role and reason for
the role of all corporate management.
2. Explain why management serves stockholders not
stakeholders and the ethi
Risk and Return In
about risk and return, a/k/a
1. Differentiate between high
risk securities and low risk
2. Compute the average
return and volatility of
returns from a set of
historical asset prices.
WHAT YOU NEED TO
KNOW ABOUT CH 9.
1. Identify, calculate and forecast net incremental cash
flows from an investment/project.
2. Recognize common pitfalls that arise in identifying a
projects incremental free cas
Answer all questions. Each question is worth one point.
1. James Surowiecki s book claims that _
(a) under the right circumstances, groups are remarkably intelligent, and are often
smarter than the smartest people in them
(b) stock prices typically exhibi
INFORMATION IN CH 18.
1. Explain in your own words the goals of long-term financial planning.
2. Create pro forma income statements and balance sheets using the
percent of sales method.
Note: Were igno