Vocabulary
1. Coupon Bonds 2. Zero Coupon Bonds 3. Return n Current Yield n Capital Gain/Loss 4. Yield to Maturity vs. Yield to Call
1
Let's look at cash flows
n N
I
PV
PMT
FV
2
Bonds
n 2 fundamental concepts we want in finance n Bond valuation techniques
Introduction
WHAT IS FINANCE?
Financial Management decisions about
assets/capital (investments, financing)
Capital Markets interest rates, stocks and
bonds, bring together savers and demanders
Investments security analysis, portfolio
analysis
Forms of Org
homework 10:
Question 1 of 10
1.0 Points
Suppose you are analyzing two firms in the same industry. Firm A has a profit margin of 10% versus
a margin of 8% for Firm B. Firm A's debt ratio is 70% versus one of 20% for Firm B. Based only on
these two facts,
homework 5:
Question 1 of 10
1.0 Points
1. The future earnings, dividends, and common stock price of Carpetto Tech Inc. are expected to
grow by 7% next year. Carpettos common stock currently sells for $23.00 per share; its last dividend
was $2.00, and it
QuestionSingleCorrectpoint
Youhaveabondwitha$10,000parvalue,9.2%couponrate,17yearmaturity,amarketrateofinterestof
11.1%,andPVof$8,549.92. What is(are) the compounding period(s) associated with this bond?
Note: Your answer needs to be EXACT (to the penny
FIN 301
Practice Questions for Midterm 4
1. Wayward Inc. has a beta of 1.42. The expected return on the S&P 500 index for the next year is
11.87% and a one-year T-bill that pays $1,000 at maturity is currently selling for $945 (there are no
coupon interes
Part 1 of 10 - HW1NEWQ1
1.0 Points
Question 1 of 10
1.0 Points
You deposit $1150.00 into a savings account
earning 8%, compounded quarterly. How long
does it take you to have an amount of $3,417.49
in the account?
A.15 years
B.55 periods
C.25 periods
D.11
Homework 4:
Write out a formula that can be used to value any stock (P0), regardless of its dividend pattern.
A. D/ks
B. Dt/(1+ks)t
Summation from t to
infinity of Dt divided
by (1 + ks) raised to the
t power
C. D0 * (1 + g)/(ks g)
D. D1/ (ks g)
E. There
homework 6:
Question 1 of 10
1.0 Points
A firm's CFO wants to estimate the firm's WACC, and has compiled the following information:
The firm's capital structure consists of 60% equity and 40% debt.
The firm has bonds outstanding yield 8.75%.
The real-risk
homework 9:
Question 1 of 10
1.0 Points
Your firm is currently 100% equity financed. The CFO is considering a recapitalization plan under
which the firm would issue long-term debt with an after-tax yield of 9% and use the proceeds to
repurchase some of it
Key Vocabulary
Time Value of Money (TVM)
Time Lines
Compound Interest
Compounding
Discounting
Interest rates
Nominal, quoted, stated rate
Periodic rate
Effective annual rate (EAR)
Finance is a 2-Trick Poney
1 760
FINA
Corporate
Finance
Farmer
School
T
Essentials of Corporate Finance Ross 8th Edition Test Bank
Click here to download the test bank INSTANTLY!
http:/www.solutionsmanualtestbank.com/products/2013/03/07/essentials-of-corporatefinance-ross-8th-edition-test-bank
Name: Essentials of Corporate Fi
Bond Valuation Worksheet
ASSUMPTION TABLE
Years to Maturity
Nominal Mkt Interest Rate
# Periods in a Year
Nom. Coupon Rate
Par Value of the Bond
CALLABLE BOND
Years to Call
Call Premium
Nominal Yield to Call
Period
Coupon CF
Disc. Payment
VALUATION RESULT
Bond Valuation Worksheet
ASSUMPTION TABLE
Years to Maturity
Nominal Mkt Interest Rate
# Periods in a Year
Nom. Coupon Rate
Par Value of the Bond
CALLABLE BOND
Years to Call
Call Premium
Nominal Yield to Call
Period
Coupon CF
Disc. Payment
VALUATION RESULT
FINA 363 Introduction to Finance
Exam #2
Dr. David Chappell
Version A
Name _
1. You have extra money to invest for exactly one year, after which you will need to sell the
investment to pay for college. You decide you want to buy Intel stock, which is curr
FIN 401 Investments
Farmer School of Business, Miami University
Spring 2016 Group Project
A Practical Application of Portfolio Theory
Due Thursday, May 3, 2016
Lets say you have a $1million dollar to invest and your objective is to form a well-diversified
homework 8:
Question 1 of 10
1.0 Points
The primary advantage to using accelerated rather than straight-line depreciation is that with
accelerated depreciation the total amount of depreciation that can be taken, assuming the asset is
used for its full tax
homework 7:
Question 1 of 10
1.0 Points
You have two capital projects projected below. Projects X and Y have the following costs and
projected cash flows. The required rate of return for both projects is 12%.
Year Project X Project Y
0 ($10,000) ($10,000)
Fall 2016
FIN 301
INTRODUCTION TO FINANCE
Professor:
Office:
Phone:
Email:
Dr. David Chappell, Ph.D.
FSB 2022
513-529-1503
[email protected]
Office Hrs:
Dr. Chappell
(I prefer contact via email; please include your name and section
number in the header
Bond Valuation
BOND COMPONENTS
MARKET INTEREST RATES CHANGE
Yield to Maturity (Nominal)
Years
Yield
to to
Maturity
Maturity (Nominal)
Present
Years Value
to Maturity
Coupon
Present
(Nominal)
Value
ParCoupon
value (Nominal)
Compounding/Yr
Par Value
9.000%
Fall 2014
FIN 301
INTRODUCTION TO FINANCE
Professor:
Office:
Phone:
Email:
Dr. David Chappell, Ph.D.
FSB 2022
513-529-1503
[email protected]
Office Hrs:
FSB 2022
Dr. Chappell
Anna Furmanava
Grace Simms
(I prefer contact via email; please include your n
Fin 301 Day 1 notes
Discount rate rate banks loan money to each other
Securitization - the process of taking an illiquid asset, or group of assets, and
through financial engineering, transforming them into a security
Mortgages, student loans, buildings,
STA 301 Homework 2 (14 pts)
Zewen Ru
Due: In class, Friday, February 19th
1. The table below lists accidental deaths by age and certain specific types for the United States in
2002.
a. A randomly selected person from the U.S. was known to have an accident
Formula Sheet
Total Return =
Income
+
Beginning Value
[Ending Value Beginning Value]
Beginning Value
Stated, Quoted, Simple Rate = Annualized rate with no consideration of compounding
Periodic Rate = Per. Rate = Simple Rate / # Compounding Periods in a Ye
STA 301 Homework 1 (30 pts)
Zewen Ru
Due: In class, Friday, January 12th
1. A consumer magazine article titled How safe is the Air in Airplanes reports the air quality, as
quantied by the degree of staleness, measured on 175 domestic ights.
(a) Assuming a