The risk of a security must be evaluated in relation to the fluctuations of other
investements in the economy (Berk & DeMarzo, 2014, p. 88, 4).
This sentence is significant because it describes the manner for which a security must be
When a firm repurchases a significant percentage of its outstanding shares in this way,
the transaction is called a leveraged recapitalization (Berk & DeMarzo, 2014, p. 486,
This sentence is significant because it describes leveraged recapitalization.
According to this theory, the total value of a levered firm equals the value of the firm
without leverage plus the present value of the tax savings from debt, less the present
value of financial distress costs (Berk & DeMarzo, 2014, p. 550, 2).
I chose th
From an accounting perspective, dividends reduce the firms current (or accumulated)
retained earnings (Berk & DeMarzo, 2014, p. 587, 1).
I chose this passage as a significant sentence because it describes a seemingly simple, yet
complex principle of busin
Of all the possible returns, the realized return is the return that actually occurs over a
particular time period (Berk & DeMarzo, 2014, p. 319, 3).
This sentence is significant because it describes the method for determining actual gain or
loss on an iss
Name of company and shortest maturity at what rate?
I chose Exxon Mobile (XOM). The bond with the shortest maturity date is:
XOM .921% Maturity date 3-15-2017.
Does that company have a number of bonds?
Yes, this organization has a number of different bond
It is important to remember that because the APR does not relect the true amount you
will earn over one year, we cannot use the APR itself as a discount rate (Berk &
DeMarzo, 2014, p. 144, 3).
This sentence is significant because it outlines a very import
The adjusted present value (APV) method is an alternative valuation method in which
we determine the levered value VL of an investment by first calculating its unlevered
value VU , which is its value without any leverage, and then adding the value of the
1. Yahoo Finance Beta .71
2. Google Fianance Beta .91
3. CNN Money Beta Non-existent
4. Value Line Beta 1.0
The text states beta measures the sensitivity of a security to market-wide risk factors
(text, 338). However, this is a broad an generalized statem
Investors tend to hold on to stocks that have lost value and sell stocks that have risen in
value since the time of purchase (Berk & DeMarzo, 2014, p. 445, 5).
This sentence is significant because it describes the disposition effect. The disposition
The difference between the firms assets and liabilities is the stockholders equity; it is
also called the book value of equity (Berk & DeMarzo, 2014, p. 27, 1).
This sentence is significant because it highlights a simple, and often misleading measure
Firms may need to maintain a minimum cash balance to meet unexpected expenditures,
and inventories of raw materials and finished product to accommodate production
uncertainties and demand fluctuations (Berk & DeMarzo, 2014, p. 242, 2).
This passage is sig
The difference in value between money today and money in the future represents the
time value of money, and it reflects the fact that by having money sooner, you can invest
it and have more money later as a result (Berk & DeMarzo, 2014, p. 99, 5).
XOM Exxon Mobil Corporation
Total Assets (2015): 336.76 billion
Total Liabilities (2015): 165.95 billion
Book value of Equity (2015): 170.81 billion
Shares Outstanding: 4.15 billion
Price per share: $85.89
Market Value of equity: 356.44 billion
The payback rule is not as reliable as the NPV rule because it (1) ignores the projects
cost of capital and the time value of money, (2) ignores cash flows after the payback
period, and (3) relies on an ad hoc decision criterion (what is the right number
What would you like to learn about Finance?
Post 2 goals/objectives you want to take away from this course at
least one paragraph per reason- and explain with Real World /or Real
Company/ or real job examples.
I would like an enhanced understanding of how
Many people claim that because of the separation of ownership and control in a
corporation, managers have little incentive to work in the interests of the shareholders
when this means working against their own self-interest. (Berk & DeMarzo, 2014, p. 11,
The yield to maturity of a bond is the discount rate that sets the present value of the
promised bond payments equal to the current market price of the bond (Berk &
DeMarzo, 2014, p. 171, 2).
This is a significant sentence in chapter 6 because it describe
Assignment #1: MBA Choices in Finance
Brandman University - FINU 706
May 29, 2016
Deciding on pursing a masters in business administration takes into account many
factors. If David goes back to school, after being away from that
New Frontiers in Finance
Bitcoin technology will change finance
Machine learning in securities
Global network of finance structures
Hints for how to complete Assignment #1
Question 1. How does Davids age affect his decision to get an MBA? Explain why?
This question is relatively easy. Age is the hint and time is the other hint.
Question 2. What other, perhaps non- quantifiable factor
Assignment #1 MBA Choices in Finance
Assigned Class 2 Due 11:55pm on Sunday Week 4
75 Points two page paper
David Jetter graduated from college six years ago with a finance undergraduate degree. Although
he is satisfied with his current job, his goal is t
FINU 607 Online- Summer 1-16
Introduction and Overview
of Finance & Statements
Tools and Basic Valuation
Basic Valuation cont.
Ch 1 The Corporation