Assignment 4 (Chapter 6 Bond Valuation)
Ch. 6
QP 8.
Here, we need to find the coupon rate of the bond. All we need to do is to set up the bond pricing
equation and solve for the coupon payment as foll
Assignment 7 (Chapters 10 & 11 Risk and Return)
Ch. 10
QP 20.
The arithmetic average return is the sum of the known returns divided by the number of returns, so:
Arithmetic average return = (.26 + .06
Assignment 6 (Chapters 8 & 9 NPV and Capital Budgeting)
Ch. 8
QP 17.
a.
The profitability index for each project is:
Y: PI = ($14,000/1.12 + $12,400/1.122 + $14,800/1.123 + $10,400/1.124) / $31,000
PI
FIN 2001 - Financial Management
1
Lecture 1
Introduction
2
Key Concepts and Skills
Know the basic types of financial
management decisions and the role of
the financial manager
Know the financial impli
18
p A n 1- 1 Overview of Financial Management
SUMMARY AND CONCLUSIONS
This chapter has introduced yen to some of the basic ideas in business nance. In it, we
saw that:
1. Business nance has three m
10 p A n 'r 7 Long-Term Financing
SUMMARY AND CONCLUSIONS
This chapter has discussed cost of capital. The most important concept is the weighted av-
erage co'st of capital, or WACC, which we interpret
FIN2001
FINANCIAL MANAGEMENT
Topic 1
1
Introduction
2
Key Concepts and Skills
Know
the
basic
types
of
financial
management decisions and the role of the
financial manager
Know the financial implicat
FIN2001
FINANCIAL MANAGEMENT
Topic 2
1
Financial
Statements, Taxes
and Cash Flows
2
Key Concepts and Skills
Know the difference between book
value and market value
Know
the
difference
between
accoun
FIN2001
FINANCIAL MANAGEMENT
Topic 3
1
Working with
Financial
Statements
2
Key Concepts and Skills
Know how to standardize financial
statements for comparison purposes
Know how to compute and interp
FIN2001
FINANCIAL
MANAGEMENT
Topic 9
1
Making Capital Investment
Decisions
2
Key Concepts and Skills
Understand how to determine the
relevant cash flows for a proposed
investment
Understand how to a
FIN2001
FINANCIAL MANAGEMENT
Topic 11
1
Cost of Capital
2
Key Concepts and Skills
Know how to determine a firms cost
of equity capital
Know how to determine a firms cost
of debt
Know how to determi
FIN2001
FINANCIAL
MANAGEMENT
Topic 7
1
Equity Markets and Stock
Valuation
2
Key Concepts and Skills
Understand how stock prices depend on
future dividends and dividend growth
Be able to compute stoc
FIN2001
FINANCIAL
MANAGEMENT
Topic 10
1
Risk and Return
2
Key Concepts and Skills
Know how to calculate expected returns
and total risk
Understand the impact of diversification
Understand the syste
FIN2001
FINANCIAL
MANAGEMENT
Topic 6
1
Interest Rates and Bond
Valuation
2
Key Concepts and Skills
Know the important bond features and
bond types
Understand bond values and why they
fluctuate
Unde
FIN2001
FINANCIAL
MANAGEMENT
Topic 8
1
Net Present Value and Other
Investment Criteria
2
Key Concepts and Skills
Understand the payback rule and its
shortcomings
Understand accounting rates of retur
Assignment 8 (Chapter 12 Cost of Capital)
Ch. 12
QP 14.
a.
Using the equation to calculate WACC, we find:
WACC = .081 = (1/1.55)(.11) + (.55/1.55)(1 .35)RD
RD = .0435, or 4.35%
b.
Using the equation t
Assignment 5 (Chapter 7 Stock Valuation)
Ch. 7
QP 10.
We need to find the growth rate of dividends. Using the constant growth model, we can solve the
equation for g. g is the growth rate of dividends
Assignment 2 (Chapter 4 Time Value of Money)
Ch. 4
QP 15.
The time line is:
0
7
$289,600
$242,300
To answer this question, we can use either the FV or the PV formula. Both will give the same answer
si
FIN 2001 Financial Management
1
Lecture 3
Working With Financial
Statements
2
Key Concepts and Skills
Know how to standardize financial
statements for comparison purposes
Know how to compute and inter
FIN 2001 Financial Management
1
Lecture 2
Financial Statements,
Taxes and Cash Flows
2
Key Concepts and Skills
Know the difference between book
value and market value
Know the difference between
accou
FIN 2001 Financial Management
1
Lecture 8
Net Present Value and Other
Investment Criteria
2
Key Concepts and Skills
Understand the payback rule and its
shortcomings
Understand accounting rates of
retu
t
p A at d- Valuing Stocks and Bonds
P5 = D5 x (1 + all/(R g)
= $2.938? x LOB/.08
7.2
:RITICAL THINKING AND CON
7.1 Stock Valuation.
7.2 Stock Valuation.
NYSE and the NASDAQ dont pay
willing to buy sh
98
CHAPTER REVIEW AND SELF-TEST PROBLEMS
6.1 Bond Values. A Microgates Industries bond has a 10 percent coupon
P A n 1- 4 Valuing Stocks and Bonds
7. Bond yields reect the effect of six different thin
Hang Seng Management College
ECO 1002 Business Economics 2
Second Semester 2016-17
Topic 03 Productivity and Growth
Problem Set
Multiple Choice Questions
1. In one day Portal Computer Company made 400
Ms Rosalie Woo
1
Key Concepts and Skills
a)
Know the basic types of financial
management decisions and the role of the
financial manager
b)
Know the financial implications of the
different forms of bu
FIN 2001 Financial Management
Topic 02 Financial Statements,
Taxes and Cash Flows
Ms Rosalie Woo
1
KEY CONCEPTS AND SKILLS
Know the difference between book
value and market value
Know the difference
FIN 2001 Financial Management
Topic 07
Equity Markets and Stock
Valuation
Ms Rosalie Woo
1
Key Concepts and Skills
Understand how stock prices depend on future
dividends and dividend growth
Be able
FIN 2001 FINANCIAL MANAGEMENT
NET PRESENT VALUE AND
OTHER INVESTMENT CRITERIA
Topic 08
Ms Rosalie Woo
KEY CONCEPTS AND SKILLS
Understand the payback rule and its
shortcomings
Understand accounting r