Net Present Value and Other Other Investment Rules
- Chapter 9 Instructor: Yihui Wang
Net Present Value and Other Investment Rules
Main Issues
How to make investment decisions? Net Present Value (NPV) rule The Internal Rate of Return (IRR) Compare NPV to
Capital Structure
- Chapter 17 Yihui Wang
Capital Structure
Main Issues
The Effect of Leverage Capital Structure and Firm Value (MM Proposition I) Capital Structure and Cost of Capital (MM Proposition II) Add corporate taxes Add bankruptcy costs Optimal
Capital Market Efficiency
-Chapter 12 12
Yihui Wang
Capital Market Efficiency
Main Issues
Return, Risk and Financial Markets The Efficient Market Hypothesis
2
Capital Market Efficiency
Return
Dollar return
Dt + (P P1) t t
Percentage return
Dt + P P1 Dt
Project Evaluation
- Chapter 10&11 Yihui Wang
Project Evaluation
Main Issues
How to calculate cash flows of a proposed project? How reliable are our NPV estimates?
2
Project Evaluation
Pro Forma Statements and Cash Flows
Capital budgeting relies heavily
Stock Valuation
- Chapter 8 Yihui Wang
Stock Valuation
Main Issues
Stock valuation
Dividend discount model Comparables approach (market approach)
Important features of common stock The stock markets
2
Stock Valuation
What is Common Stock
Common stock:
Interest Rates and Bond Valuation Valuation
- Chapter 7 Yihui Wang
Interest Rates and Bond Valuation
Main Issues
Bond valuation Yield to maturity (YTM) Interest rate Credit (default) risk Bond classification and bond market
2
Interest Rates and Bond Valu
The Time Value of Money
- Chapter 5 Yihui Wang
The Time Value of Money
Main Issues
Understand money has time value Present value and future value Simple interest and compound interest Application of present value function in various problems
2
The Time V
Cash Flows and Fi Financial Analysis
- Chapter 2 & 3
Instructor: Yihui Wang
Cash Flows and Financial Analysis
Main Issues
Decipher financial statements
Book value vs. market value Accounting income vs. cash flows
Calculate cash flows Financial Ratio An
Introduction Introduction to Corporate Finance
- Chapter 1 Instructor: Yihui Wang
Introduction to Corporate Finance
What is Corporate Finance?
Corporate finance is mainly about the acquisition and distribution of the resources a company need for its oper
Cost of Capital and Firm Valuation Valuation
- Chapter 15 Yihui Wang
Cost of Capital and Firm Valuation
Main Issues
The cost of equity The cost of debt and preferred stock The weighted average cost of capital Basics of firm valuation Project cost of capi
The Capital Asset Pricing Model Model (CAPM)
- Chapter 13 13 Yihui Wang
The Capital Asset Pricing Model (CAPM)
Main Issues
Review on statistics and probability Expected return and volatility for securities Portfolios and diversification Risk: systematic
Financial Statements
Chapter 1 Accounting in Action (Lesson 3)
Companies prepare four financial statements from Companies prepare four financial statements from the summarized accounting data: the summarized accounting data:
Income Statement
Retained Earn
The Basic Accounting Equation
Chapter 1 Accounting in Action (Lesson 2)
Assets
=
Liabilities
+
Stockholders Stockholders Equity
Provides the underlying framework for recording and summarizing economic events. Assets are claimed by either creditors or owne
What is Accounting?
Chapter 1 Accounting in Action (Lesson 1)
The purpose of accounting is to: identify, record, and communicate the identify record economic events of an organization to interested users.
2009/9/6
1
2009/9/6
2
The accounting process
What
THE CHINESE UNIVERSITY OF HONG KONG SCHOOL OF ACCOUNTANCY ACY1111 INTRODUCTORY FINANCIAL ACCOUNTING () - M FIRST TERM, 2009-2010
INSTRUCTOR Dr. Joyce L. H. Wang () Office: Room 315, Teaching Complex at Western Campus (TCW) Phone: 2696 1692 [email protected]