FIN2014/BMB 2207/BAB2203 : Financial Management
Tutorial 7 Ch 11
1. What is an efficient portfolio?
2. You are considering how to invest part of your retirement savings. You have decided to
put $200,000 into three stocks: 50% of the money in GoldFinger (c
Lecture 5 - Ch 8 Fundamentals of Capital Budgeting
Learning Objectives
1. Given a set of facts, identify relevant cash flows for a capital budgeting problem.
2. Explain why opportunity costs must be included in cash flows, while sunk costs and interest ex
Lecture 11 - Ch17 Payout Policy
Learning Objectives
List two ways a company can distribute cash to its shareholders.
Describe the dividend payment process and the open-market repurchase process.
Define stock split, reverse stock split, and stock dividend;
Lecture 10 Ch 24 Debt Financing
Learning Objectives
1. Understand the advantages and disadvantages of debt financing
2. Identify typical sources of debt for corporations.
3. Define the following terms: notes, debentures, mortgage bonds, and asset-backed b
Lecture 5 - Ch 9 & 13 Share Valuation
Learning Objectives
1. Calculate the total return of a stock, given the dividend payment, the current price, and the previous
price.
2. Use the dividend-discount model to compute the value of a dividend-paying company
Lecture 2 - Ch 3 & 7 Arbitrage and financial decision making
Learning Objectives
1. Define net present value, payback period, internal rate of return, profitability index, and incremental
IRR.
2. Describe decision rules for each of the tools in objective
Lecture 7 - Ch 12 Estimating the Cost of Capital
Learning Objectives
1. Estimate a companys cost of capital using the CAPM equation for the Security Market Line.
2. Describe the market portfolio and how it is constructed in practice.
3. Discuss the attrib
Chapter 11 Optimal Portfolio Choice and The Capital Asset Pricing Model
Intro
In particular, we will demonstrate how to find the optimal the optimal portfolio for an
investor who wants to earn the highest possible return given the level of volatility he/s
FIN2014 / BMB 2207 / BAB2203: Financial Management
Tutorial 1
1. Compare and contrast the goals of profit maximisation and maximisation of shareholder
wealth.
2. The president of Southern Semiconductor Corporation (SSC) made this statement in the
companys
FIN2014 / BMB 2207 /BAB2203 : Financial Management
Tutorial 4
1. Crane Sporting Goods expects to have earnings per share of $6 in the coming year. Rather
than reinvest these earnings and grow, the firm plans to pay out all of its earnings as a
dividend. W
Lecture 3 Ch 6 Bond Valuation
Learning Objectives
1. Identify the cash flows for both coupon bonds and zero-coupon bonds, and calculate the value for each
type of bond.
2. Calculate the yield to maturity for both coupon and zero-coupon bonds, and interpre
FIN2014/BMB 2207/BAB2203 : Financial Management
Tutorial 6
1. Suppose the risk-free return is 4% and the market portfolio has an expected return of
10% and a volatility of 16%. Johnson and Johnson Corporation (Ticker: JNJ) stock has a
20% volatility and a
Lecture 1 - Ch 1 & 2 Introduction and Financial Analysis
Learning Objectives
1. Discuss the division of corporate ownership into shares of stock; evaluate the implications of
that division for corporate decision making.
2. Discuss the difference between b
Lecture 9 Ch 23 Raising Equity Capital
Learning Objectives
1. Describe four ways in which a private company can raise outside capital.
2. Identify the two main exit strategies used by equity investors in private companies.
3. Define an initial public offe
FIN2014/BMB 2207/BAB2203: Financial Management
Tutorial 8 Ch 12
1.
Suppose Pepsicos stock has a beta of 0.57. If the risk-free rate is 3% and the expected
return of the market portfolio is 8%, what is Pepsicos equity cost of capital?
2.
Bernama Bhd is an
FIN2014/BMB 2207 /BAB2203: Financial Management
Tutorial 3 Ch 6
1. Suppose that General Motors Acceptance Corporation issued a bond with 10 years
until maturity, a face value of $1000, and a coupon rate of 7% (annual payments).
The yield to maturity on th
FIN2014/BMB 2207/BAB2203 : Financial Management
Tutorial 2 Chapter 7
1. Your brother wants to borrow $10,000 from you. He has offered to pay you back
$12,000 in a year. If the cost of capital of this investment opportunity is 10%,
what is its NPV? Should