1. What are the three types of business organizations? Define them


 Elinor Hancock
 4 years ago
 Views:
Transcription
1 Written Exam Ticket 1 1. What is Finance? What do financial managers try to maximize, and what is their second objective? 2. How do you compare cash flows at different points in time? 3. Write the formulas for calculating EAR when APR is given and vice versa. How the formulas change in the case of continuous compounding? 4. Define NPV and PI 5. What is equity stock? What types of stock exist and what is the difference between them? 6. Describe the concept of shortselling 7. What is Foreign Exchange Risk? 8. What happens to Bond price when time reaches its maturity? 9. Explain the limits to the use of debt 10. What is factoring in credit management? Ticket 2 1. What are the three types of business organizations? Define them 2. What is Future Value/Present Value of an investment? 3. What is effective annual rate (EAR)? What is the difference between EAR and APR quote? 4. Why financial analysts are interested in the cash flows and not in the accounting incomes? Why only incremental cash flows are considered in the valuation of investment projects? 5. State the criterion for accepting or rejecting independent projects under each rule: Payback Period, IRR, PI, NPV 6. What is the difference between a public and private corporation? 7. What is the required yield for bond? How can it be calculated? 8. How the changes in capital structure affect the overall value of a firm? Show on the pie diagram 9. Is it possible for a firm to have too much cash? Why would shareholder care if a firm accumulates large amounts of cash? What options are available to a firm if it believes it has too much cash? How about too little? 10. What are Derivative Instruments? Why are they called Derivatives? Ticket 3 1. List several examples of agency problem and the costs associated with them. What forms of managerial compensation do you know? 2. What is perpetuity? Give example and write a formula for present value of perpetuity 3. What is the risk/return tradeoff principle?
2 4. What is the difference between capital expenditures and current expenses? 5. Describe money market instruments 6. List Financial System Clients 7. What is the Market Risk? 8. How are the Coupon rate and Yield Related to each other? What influence does their relationship have on price of bond? 9. Graph the balance sheet model of the firm. What questions does corporate finance study? Define each of them 10. What is the opportunity cost of capital? How do you determine Cost of Equity in practice? Ticket 4 1. What is financial planning? 2. What are discount rates? Discount Factors? Write formula for Discount Factor 3. Define holding period return (HPR) 4. Define risk. How can risk be measured? 5. Define the Payback Period. Why it is and it is NOT recommended? Which method is superior: NPV or payback period? Why? 6. List the categories of financial assets 7. Explain why the bidask spread is a transaction cost 8. What are ZeroCoupon bonds? What is its Yield to Maturity? 9. Define MM Propositions I & II with and without Taxes. Show the results graphically 10. Explain the concept of Forward Contract Ticket 5 1. State the importance of accounting and statistics for financial managers 2. What is Annuity? What is Annuity Due? What is the difference between them? 3. What is measured by covariance and correlation? How do they differ? 4. How incremental cash flows are calculated? 5. Formulate Capital Asset Pricing Model? How can the Capital Asset Pricing Model be used in valuation methods? 6. Why does the value of a share of stock depend on dividends? Define dividend growth mode 7. What is the definition of investment? 8. What is Credit Risk? 9. What is bond? 10. How do firms interact with financial markets? Show on the graph how the cash is generated
3 Ticket 6 1. What are the advantages and disadvantages of organizing a business as a corporation? 2. What is time value of money? List and explain two main reasons why money changes itsvalue through time 3. What is diversification? Define market and firmspecific risks 4. List depreciation methods known to you. Write formulae 5. What information do you need to determine the value of the following assets? 6. Describe long term debt securities instruments 7. What is meant by short position and long position? 8. How can the yield on investment be calculated for single cash flow investment? Multiple cash flow investment? 9. Define the optimal capital structure for a firm 10. What are Future Contracts? What is the difference between Forwards and Futures Contracts? Ticket 7 1. Describe the triple tax of a corporation 2. How does the change in the number of compounding per year affect PV and FV calculations? 3. What is the future value and present values of ordinary annuity? Annuity Due? 4. What is meant under term Simple Interest and how it is calculated for fractional time periods? 5. Define IRR 6. Define the concept of inflation in capital budgeting 7. Write the general formula for bond valuation 8. What is the Yield to Maturity of a Bond? 9. Why P/E ratio is important? What does it measure? 10. What costs are associated with the financial distress? Ticket 8 1. List several examples of agency problem and the costs associated with them. What forms of managerial compensation do you know? 2. How do you calculate the present value of annuity, perpetuity, growing annuity, and growing perpetuity? 3. What is Arbitrage and Speculation? 4. What is the general definition of the value of an asset? List the steps of calculating value of an asset 5. What is the practice of capital budgeting? If NPV is the superior method of investment valuation, why are other methods still used?
4 6. List and describe the stock indexes known to you 7. What types of bond exist and why are the US Treasurybills special? 8. How do firms interact with financial markets? Show on the graph how the cash is generated 9. What advantage does a stock market provide to corporate investors? What stock markets do you know? 10. The book value of a company s assets usually does not equal the market value of those assets. What are some reasons for this difference? Ticket 9 1. What are the advantages and disadvantages of organizing a business as a corporation? 2. What is time value of money? List and explain two main reasons why money changes itsvalue through time 3. What is capital budgeting? What methods are used in Capital Budgeting? 4. In practice, how do you find the beta of a project? 5. What types of dividends do you know? Which type is more preferable? Why? 6. List the discount instruments that you know? Why are they called Discounts? 7. Define primary and secondary markets 8. What is a firm worth with outstanding stock issued and without it? 9. What is Current Yield? How is it calculated? What interdependence it has with Yield to Maturity and Coupon Rate? 10. Explain the concept of Call / Put Option. List their characteristics and draw graph for long and short positions. What is the difference between American and European Options? Ticket What are the three types of business organizations? Define them 2. What is Future Value/Present Value of an investment? 3. What is the practice of capital budgeting? If NPV is the superior method of investment valuation, why are other methods still used? 4. What is the difference between real assets and financial assets? 5. What main characteristics have municipal bonds? 6. Graph and explain the relationship between Bond Price and Required Yield 7. What is the Yield to Maturity of a Bond? 8. What is Beta of a security? 9. Define MM Propositions I & II with and without Taxes. Show the results graphically 10. What is Credit Risk?
5 Verbal Exam Ticket 1 What are the three types of business organizations? Define them Define risk. How can risk be measured? List and describe the stock indexes known to you Ticket 2 What is Future Value/Present Value of an investment? Define NPV and PI What types of bond exist and why are the US Treasurybills special? Ticket 3 What is Annuity? What is Annuity Due? What is the difference between them? Graph and explain the relationship between Bond Price and Required Yield How the changes in capital structure affect the overall value of a firm? Show on the pie diagram Ticket 4 What is effective annual rate (EAR)? What is the difference between EAR and APR quote? State the criterion for accepting or rejecting independent projects under each rule: Payback Period, IRR, PI, NPV Is it possible for a firm to have too much cash? Why would shareholder care if a firm accumulates large amounts of cash? What options are available to a firm if it believes it has too much cash? How about too little? Ticket 5 What is meant under term Simple Interest and how it is calculated for fractional time periods?
6 List Financial System Clients What is the opportunity cost of capital? Ticket 6 How does the change in the number of compounding per year affect PV and FV calculations? Formulate Capital Asset Pricing Model? How can the Capital Asset Pricing Model be used in valuation methods? What is Credit Risk? Ticket 7 Define holding period return (HPR) What is the difference between a public and private corporation? What are ZeroCoupon bonds? What is its Yield to Maturity? Ticket 8 List several examples of agency problem and the costs associated with them. What forms of managerial compensation do you know? What is capital budgeting? What methods are used in Capital Budgeting? Write the general formula for bond valuation Ticket 9 What is perpetuity? Give example and write a formula for present value of perpetuity Define the Payback Period. Why it is and it is NOT recommended? Which method is superior: NPV or payback period? Why? What are Derivative Instruments? Why are they called Derivatives? Ticket 10
7 What is time value of money? List and explain two main reasons why money changes itsvalue through time? What types of dividends do you know? Which type is more preferable? Why? Describe the concept of shortselling Ticket 11 What are discount rates? Discount Factors? Write formula for Discount Factor What is the difference between real assets and financial assets? Define MM Propositions I & II with and without Taxes. Show the results graphically Ticket 12 What is Arbitrage and Speculation? What is equity stock? What types of stock exist and what is the difference between them? What is the Market Risk? Ticket 13 Write the formulas for calculating EAR when APR is given and vice versa. How the formulas change in the case of continuous compounding? Why financial analysts are interested in the cash flows and not in the accounting incomes? Why only incremental cash flows are considered in the valuation of investment projects? Explain the concept of Forward Contract Ticket 14 What is Finance? What do financial managers try to maximize, and what is their second objective? Define IRR What happens to Bond price when time reaches its maturity?
8 Ticket 15 What is the risk/return tradeoff principle? Explain why the bidask spread is a transaction cost What costs are associated with the financial distress? Ticket 16 What is diversification? Define market and firmspecific risks Why are financial institutions important? How do firms interact with financial markets? Show on the graph how the cash is generated Ticket 17 What is the general definition of the value of an asset? List the steps of calculating value of an asset Describe money market instruments How are the Coupon rate and Yield Related to each other? What influence does their relationship have on price of bond? Ticket 18 What is the difference between capital expenditures and current expenses? What is the Yield to Maturity of a Bond? Graph the balance sheet model of the firm. What questions does corporate finance study? Define each of them. Ticket 19 In practice, how do you find the beta of a project? What is bond? What are Future Contracts? What is the difference between Forwards and Futures Contracts?
9 Ticket 20 What is the practice of capital budgeting? If NPV is the superior method of investment valuation, why are other methods still used? What is Foreign Exchange Risk? What is a firm worth with outstanding stock issued and without it? Ticket 21 What advantage does a stock market provide to corporate investors? What stock markets do you know? Why does the value of a share of stock depend on dividends? Define dividend growth mode Define the concept of inflation in capital budgeting Ticket 22 How do you compare cash flows at different points in time? What is measured by covariance and correlation? How do they differ? How can the yield on investment be calculated for single cash flow investment? Multiple cash flow investment? Ticket 23 What information do you need to determine the value of the following assets? What is meant by short position and long position? Explain the concept of Call / Put Option. List their characteristics and draw graph for long and short positions. What is the difference between American and European Options? Ticket 24 How do you calculate the present value of annuity, perpetuity, growing annuity and growing perpetuity? What is meant by short position and long position?
10 Explain the limits to the use of debt Ticket 25 Define primary and secondary markets List the discount instruments that you know? Why are they called Discounts? Define the optimal capital structure for a firm
Review Solutions FV = 4000*(1+.08/4) 5 = $4416.32
Review Solutions 1. Planning to use the money to finish your last year in school, you deposit $4,000 into a savings account with a quoted annual interest rate (APR) of 8% and quarterly compounding. Fifteen
More informationUNIVERSITY OF WAH Department of Management Sciences
BBA330: FINANCIAL MANAGEMENT UNIVERSITY OF WAH COURSE DESCRIPTION/OBJECTIVES The module aims at building competence in corporate finance further by extending the coverage in Business Finance module to
More informationPrimary Market  Place where the sale of new stock first occurs. Initial Public Offering (IPO)  First offering of stock to the general public.
Stock Valuation Primary Market  Place where the sale of new stock first occurs. Initial Public Offering (IPO)  First offering of stock to the general public. Seasoned Issue  Sale of new shares by a
More informationHagerstown Community College OFFICIAL COURSE SYLLABUS DOCUMENT. COURSE: MGT 203 Finance SEMESTER/YEAR: Spring 2014
Hagerstown Community College OFFICIAL COURSE SYLLABUS DOCUMENT COURSE: MGT 203 Finance SEMESTER/YEAR: Spring 2014 INSTRUCTOR: Lori Spessard CONTACT INFORMATION: Email: ljspessard@hagerstowncc.edu Office:
More informationBF 6701 : Financial Management Comprehensive Examination Guideline
BF 6701 : Financial Management Comprehensive Examination Guideline 1) There will be 5 essay questions and 5 calculation questions to be completed in 1hour exam. 2) The topics included in those essay and
More informationTYLER JUNIOR COLLEGE School of Continuing Studies 1530 SSW Loop 323 Tyler, TX 75701 1.800.298.5226 www.tjc.edu/continuingstudies/mycaa
TYLER JUNIOR COLLEGE School of Continuing Studies 1530 SSW Loop 323 Tyler, TX 75701 1.800.298.5226 www.tjc.edu/continuingstudies/mycaa Education & Training Plan Finance Professional Program Student Full
More informationThe Lee Kong Chian School of Business Academic Year 2015 /16 Term 1
The Lee Kong Chian School of Business Academic Year 2015 /16 Term 1 FNCE101 FINANCE Instructor : Dr Chiraphol New Chiyachantana Tittle : Assistant Professor of Finance (Education) Tel : 6828 0776 Email
More informationMBA 8130 FOUNDATIONS OF CORPORATION FINANCE FINAL EXAM VERSION A
MBA 8130 FOUNDATIONS OF CORPORATION FINANCE FINAL EXAM VERSION A Fall Semester 2004 Name: Class: Day/Time/Instructor:. Read the following directions very carefully. Failure to follow these directions will
More information( ) ( )( ) ( ) 2 ( ) 3. n n = 100 000 1+ 0.10 = 100 000 1.331 = 133100
Mariusz Próchniak Chair of Economics II Warsaw School of Economics CAPITAL BUDGETING Managerial Economics 1 2 1 Future value (FV) r annual interest rate B the amount of money held today Interest is compounded
More informationEducation & Training Plan Finance Professional Certificate Program with Externship
Testing Services and Programs 1200 N. DuPont Highway Dover, DE 19901 https://www.desu.edu/academics/mycaa Contact: Amystique HarrisChurch 302.857.6143 achurch@desu.edu Student Full Name: Education & Training
More informationEssentials of Business Administration. Edited by T. Toronjadze
Essentials of Business Administration Edited by T. Toronjadze Tbilisi, Georgia, 2012 Authors: Finance: T. Toronjadze, Full Professor T. Uzunashvili, Associate Professor L. Gachechiladze, Assistant Professor
More informationTPPE17 Corporate Finance 1(5) SOLUTIONS REEXAMS 2014 II + III
TPPE17 Corporate Finance 1(5) SOLUTIONS REEXAMS 2014 II III Instructions 1. Only one problem should be treated on each sheet of paper and only one side of the sheet should be used. 2. The solutions folder
More informationFINANCIAL PLANNING ASSOCIATION OF MALAYSIA
FINANCIAL PLANNING ASSOCIATION OF MALAYSIA MODULE 4 INVESTMENT PLANNING Course Objectives To understand the concepts of risk and return, the financial markets and the various financial instruments available,
More informationEducation & Training Plan Finance Professional Certificate Program with Externship
Student Full Name: University of Texas at El Paso Professional and Public Programs 500 W. University Kelly Hall Ste. 212 & 214 El Paso, TX 79968 http://www.ppp.utep.edu/ Contact: Sylvia Monsisvais 9157477578
More informationMGT201 Solved MCQs(500) By
MGT201 Solved MCQs(500) By http://www.vustudents.net Why companies invest in projects with negative NPV? Because there is hidden value in each project Because there may be chance of rapid growth Because
More informationt = 1 2 3 1. Calculate the implied interest rates and graph the term structure of interest rates. t = 1 2 3 X t = 100 100 100 t = 1 2 3
MØA 155 PROBLEM SET: Summarizing Exercise 1. Present Value [3] You are given the following prices P t today for receiving risk free payments t periods from now. t = 1 2 3 P t = 0.95 0.9 0.85 1. Calculate
More informationYou just paid $350,000 for a policy that will pay you and your heirs $12,000 a year forever. What rate of return are you earning on this policy?
1 You estimate that you will have $24,500 in student loans by the time you graduate. The interest rate is 6.5%. If you want to have this debt paid in full within five years, how much must you pay each
More informationM.I.T. Spring 1999 Sloan School of Management 15.415. First Half Summary
M.I.T. Spring 1999 Sloan School of Management 15.415 First Half Summary Present Values Basic Idea: We should discount future cash flows. The appropriate discount rate is the opportunity cost of capital.
More informationMODULE: PRINCIPLES OF FINANCE
Programme: BSc (Hons) Financial Services with Law BSc (Hons) Accounting with Finance BSc (Hons) Banking and International Finance BSc (Hons) Management Cohort: BFSL/13/FT Aug BACF/13/PT Aug BACF/13/FT
More informationChapter 6. Discounted Cash Flow Valuation. Key Concepts and Skills. Multiple Cash Flows Future Value Example 6.1. Answer 6.1
Chapter 6 Key Concepts and Skills Be able to compute: the future value of multiple cash flows the present value of multiple cash flows the future and present value of annuities Discounted Cash Flow Valuation
More informationTIP If you do not understand something,
Valuing common stocks Application of the DCF approach TIP If you do not understand something, ask me! The plan of the lecture Review what we have accomplished in the last lecture Some terms about stocks
More informationSAMPLE FACT EXAM (You must score 70% to successfully clear FACT)
SAMPLE FACT EXAM (You must score 70% to successfully clear FACT) 1. What is the present value (PV) of $100,000 received five years from now, assuming the interest rate is 8% per year? a. $600,000.00 b.
More informationChapter 5 Time Value of Money 2: Analyzing Annuity Cash Flows
1. Future Value of Multiple Cash Flows 2. Future Value of an Annuity 3. Present Value of an Annuity 4. Perpetuities 5. Other Compounding Periods 6. Effective Annual Rates (EAR) 7. Amortized Loans Chapter
More informationThe Lee Kong Chian School of Business Academic Year 2012/13 Term 1
The Lee Kong Chian School of Business Academic Year 2012/13 Term 1 FNCE101 FINANCE Instructor Name : Daniel A Stone Title : Adjunct Tel : Email Office : TBD : dstone@smu.edu.sg COURSE DESCRIPTION This
More informationProblem Set 1 Foundations of Financial Markets Instructor: Erin Smith Summer 2011 Due date: Beginning of class, May 31
Problem Set Foundations of Financial Markets Instructor: Erin Smith Summer 20 Due date: Beginning of class, May 3. Suppose the debt holders of a cosmetics firm hold debt with a face value of $500,000.
More informationCourse Title : Financial Management. Teaching Hours : 42 hours (3 hours per week)
Course Title : Financial Management Course Code : BUS201 / BUS2201 No of Credits/Term : 3 Mode of Tuition : Sectional Approach Teaching Hours : 42 hours (3 hours per week) Category in major Programme :
More informationNUS Business School. FIN2004 Finance. Semester II 2013/2014
NUS Business School FIN2004 Finance Semester II 2013/2014 COURSE DESCRIPTION This course provides students with the foundations to understand the key concepts and tools used in Finance. It offers a broad
More informationCHAPTER 8 INTEREST RATES AND BOND VALUATION
CHAPTER 8 INTEREST RATES AND BOND VALUATION Solutions to Questions and Problems 1. The price of a pure discount (zero coupon) bond is the present value of the par value. Remember, even though there are
More informationReview for Exam 1. Instructions: Please read carefully
Review for Exam 1 Instructions: Please read carefully The exam will have 20 multiple choice questions and 4 work problems. Questions in the multiple choice section will be either concept or calculation
More informationReview for Exam 1. Instructions: Please read carefully
Review for Exam 1 Instructions: Please read carefully The exam will have 21 multiple choice questions and 5 work problems. Questions in the multiple choice section will be either concept or calculation
More informationPBL: Financial Concepts. Competency: Financial Instruments and Institutions
Competency: Financial Instruments and Institutions 1. Describe the standard and unique features of the following securities: bills, notes, bonds, zeros, and muni s. 2. Demonstrate an understanding of negotiable
More informationCIS September 2012 Exam Diet. Examination Paper 2.2: Corporate Finance Equity Valuation and Analysis Fixed Income Valuation and Analysis
CIS September 2012 Exam Diet Examination Paper 2.2: Corporate Finance Equity Valuation and Analysis Fixed Income Valuation and Analysis Corporate Finance (1 13) 1. Assume a firm issues N1 billion in debt
More informationCHAPTER 5 HOW TO VALUE STOCKS AND BONDS
CHAPTER 5 HOW TO VALUE STOCKS AND BONDS Answers to Concepts Review and Critical Thinking Questions 1. Bond issuers look at outstanding bonds of similar maturity and risk. The yields on such bonds are used
More informationSpring 2012. True/False Indicate whether the statement is true or false.
Corporation Finance Spring 2012 Sample Exam 2B True/False Indicate whether the statement is true or false. 1. The total return on a share of stock refers to the dividend yield less any commissions paid
More informationPrinciples of Financial Management. 3 3 Lecture/Laboratory Hours
COURSE OUTLINE BUS218 Course Number Principles of Financial Management Course Title Credits 3 3 Lecture/Laboratory Hours Course description: Principles of financial management as applied to the firm including
More informationKEY EQUATIONS APPENDIX CHAPTER 2 CHAPTER 3
KEY EQUATIONS B CHAPTER 2 1. The balance sheet identity or equation: Assets Liabilities Shareholders equity [2.1] 2. The income statement equation: Revenues Expenses Income [2.2] 3.The cash flow identity:
More information] (3.3) ] (1 + r)t (3.4)
Present value = future value after t periods (3.1) (1 + r) t PV of perpetuity = C = cash payment (3.2) r interest rate Present value of tyear annuity = C [ 1 1 ] (3.3) r r(1 + r) t Future value of annuity
More informationLevel 6 Advanced Diploma in Finance (531) 126 Credits
Level 6 Advanced Diploma in Finance (531) 126 Credits Unit: Finance Theory Guided Learning Hours: 210 Exam Paper No.: 4 Prerequisites: Knowledge of Finance. Number of Credits: 21 Corequisites: A pass or
More informationManagement Accounting Financial Strategy
PAPER P9 Management Accounting Financial Strategy The Examiner provides a short study guide, for all candidates revising for this paper, to some first principles of finance and financial management Based
More informationEquity Analysis and Capital Structure. A New Venture s Perspective
Equity Analysis and Capital Structure A New Venture s Perspective 1 Venture s Capital Structure ASSETS Short term Assets Cash A/R Inventories Long term Assets Plant and Equipment Intellectual Property
More informationCHAPTER 6 NET PRESENT VALUE AND OTHER INVESTMENT CRITERIA
CHAPTER 6 NET PRESENT VALUE AND OTHER INVESTMENT CRITERIA Answers to Concepts Review and Critical Thinking Questions 1. Assuming conventional cash flows, a payback period less than the project s life means
More informationBUSINESS FINANCE (FIN 312) Spring 2009
BUSINESS FINANCE (FIN 31) Spring 009 Assignment Instructions: please read carefully You can either do the assignment by yourself or work in a group of no more than two. You should show your work how to
More informationFundamentals of Corporate Finance
Fundamentals of Corporate Finance Lamar Savings Centennial Professor of Finance University of Texas at Austin David 8. Kidwell Professor of Finance and Dean Emeritus Universityof Minnesota WILEY John Wiley
More informationFinance for Management and Organizational Studies MOS3310A COURSE DESCRIPTION TEACHING MATERIALS INSTRUCTOR CLASSROOM OFFICE HOURS EVALUATION TOPICS
Finance for MOS3310A Course Outline: Summer 2011 COURSE DESCRIPTION The concepts developed in MOS3310 form the foundation for all elective finance courses. The main topics include: 1) an overview of managerial
More informationIng. Lenka Strýčková, Ph.D.
Ing. Lenka Strýčková, Ph.D. 1. Introduction to Business Financial Management (introduction to the course, basic terminology) 2. Capital Budgeting: LongTerm Decisions (capital budgeting, shortterm and
More informationCHAPTER 8 STOCK VALUATION
CHAPTER 8 STOCK VALUATION Answers to Concepts Review and Critical Thinking Questions 5. The common stock probably has a higher price because the dividend can grow, whereas it is fixed on the preferred.
More informationExecutive Summary of Finance 430 Professor VissingJørgensen Finance 43062/63/64, Winter 2011
Executive Summary of Finance 430 Professor VissingJørgensen Finance 43062/63/64, Winter 2011 Weekly Topics: 1. Present and Future Values, Annuities and Perpetuities 2. More on NPV 3. Capital Budgeting
More informationChapter 11. Bond Pricing  1. Bond Valuation: Part I. Several Assumptions: To simplify the analysis, we make the following assumptions.
Bond Pricing  1 Chapter 11 Several Assumptions: To simplify the analysis, we make the following assumptions. 1. The coupon payments are made every six months. 2. The next coupon payment for the bond is
More informationSTUDENT CAN HAVE ONE LETTER SIZE FORMULA SHEET PREPARED BY STUDENT HIM/HERSELF. FINANCIAL CALCULATOR/TI83 OR THEIR EQUIVALENCES ARE ALLOWED.
Test IIIFINN3120090 Fall 2009 (2.5 PTS PER QUESTION. MAX 100 PTS) Type A Name ID PRINT YOUR NAME AND ID ON THE TEST, ANSWER SHEET AND FORMULA SHEET. TURN IN THE TEST, OPSCAN ANSWER SHEET AND FORMULA
More informationCHAPTER 4 DISCOUNTED CASH FLOW VALUATION
CHAPTER 4 DISCOUNTED CASH FLOW VALUATION Solutions to Questions and Problems NOTE: Allendof chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and readability
More informationReview for Exam 1. Instructions: Please read carefully
Review for Exam 1 Instructions: Please read carefully The exam will have 20 multiple choice questions and 5 work problems. Questions in the multiple choice section will be either concept or calculation
More informationNet Present Value (NPV)
Investment Criteria 208 Net Present Value (NPV) What: NPV is a measure of how much value is created or added today by undertaking an investment (the difference between the investment s market value and
More informationPaper F9. Financial Management. Friday 6 June 2014. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants.
Fundamentals Level Skills Module Financial Management Friday 6 June 2014 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae
More informationChapter 9 Net Present Value and Other Investment Criteria Chapter Organization
T9.1 Chapter Outline Chapter 9 Net Present Value and Other Investment Criteria Chapter Organization! 9.1 Net Present Value! 9.2 The Payback Rule! 9.3 The Average Accounting Return! 9.4 The Internal Rate
More informationCHAPTER 9 Stocks and Their Valuation
CHAPTER 9 Stocks and Their Valuation Preferred stock Features of common stock etermining common stock values Efficient markets 1 Preferred Stock Hybrid security. Similar to bonds in that preferred stockholders
More informationTime Value of Money. 2014 Level I Quantitative Methods. IFT Notes for the CFA exam
Time Value of Money 2014 Level I Quantitative Methods IFT Notes for the CFA exam Contents 1. Introduction...2 2. Interest Rates: Interpretation...2 3. The Future Value of a Single Cash Flow...4 4. The
More informationNASAA Investment Adviser Competency Exam (Series 65) Exam Specifications and Outline (Effective 1/1/2010)
NASAA Investment Adviser Competency Exam (Series 65) Exam Specifications and Outline (Effective 1/1/2010) CONTENT AREA # of Items 1. Economic Factors and Business Information 19 (14%) A. Basic economic
More informationFinal Exam MØA 155 Financial Economics Fall 2009 Permitted Material: Calculator
University of Stavanger (UiS) Stavanger Masters Program Final Exam MØA 155 Financial Economics Fall 2009 Permitted Material: Calculator The number in brackets is the weight for each problem. The weights
More informationCHAPTER 12 RISK, COST OF CAPITAL, AND CAPITAL BUDGETING
CHAPTER 12 RISK, COST OF CAPITAL, AND CAPITAL BUDGETING Answers to Concepts Review and Critical Thinking Questions 1. No. The cost of capital depends on the risk of the project, not the source of the money.
More informationDiscounted Cash Flow Valuation
6 Formulas Discounted Cash Flow Valuation McGrawHill/Irwin Copyright 2008 by The McGrawHill Companies, Inc. All rights reserved. Chapter Outline Future and Present Values of Multiple Cash Flows Valuing
More informationMBA (3rd Sem) 201314 MBA/29/FM302/T/ODD/1314
Full Marks : 70 MBA/29/FM302/T/ODD/1314 201314 MBA (3rd Sem) Paper Name : Corporate Finance Paper Code : FM302 Time : 3 Hours The figures in the righthand margin indicate marks. Candidates are required
More informationENTREPRENEURIAL FINANCE: Strategy Valuation and Deal Structure
ENTREPRENEURIAL FINANCE: Strategy Valuation and Deal Structure Chapter 9 Valuation Questions and Problems 1. You are considering purchasing shares of DeltaCad Inc. for $40/share. Your analysis of the company
More informationQuantitative Methods for Finance
Quantitative Methods for Finance Module 1: The Time Value of Money 1 Learning how to interpret interest rates as required rates of return, discount rates, or opportunity costs. 2 Learning how to explain
More informationCHAPTER 5. Interest Rates. Chapter Synopsis
CHAPTER 5 Interest Rates Chapter Synopsis 5.1 Interest Rate Quotes and Adjustments Interest rates can compound more than once per year, such as monthly or semiannually. An annual percentage rate (APR)
More information380.760: Corporate Finance. Financial Decision Making
380.760: Corporate Finance Lecture 2: Time Value of Money and Net Present Value Gordon Bodnar, 2009 Professor Gordon Bodnar 2009 Financial Decision Making Finance decision making is about evaluating costs
More informationTime Value of Money. Reading 5. IFT Notes for the 2015 Level 1 CFA exam
Time Value of Money Reading 5 IFT Notes for the 2015 Level 1 CFA exam Contents 1. Introduction... 2 2. Interest Rates: Interpretation... 2 3. The Future Value of a Single Cash Flow... 4 4. The Future Value
More informationGESTÃO FINANCEIRA II PROBLEM SET 2  SOLUTIONS
GESTÃO FINANCEIRA II PROBLEM SET  SOLUTIONS (FROM BERK AND DEMARZO S CORPORATE FINANCE ) LICENCIATURA UNDERGRADUATE COURSE 1 ST SEMESTER 010011 Yield to Maturity Chapter 8 Valuing Bonds 83. The following
More information6. Debt Valuation and the Cost of Capital
6. Debt Valuation and the Cost of Capital Introduction Firms rarely finance capital projects by equity alone. They utilise long and short term funds from a variety of sources at a variety of costs. No
More informationFinance 3130 Sample Exam 1B Spring 2012
Finance 3130 Sample Exam 1B Spring 2012 True/False Indicate whether the statement is true or false. 1. A firm s income statement provides information as of a point in time, and represents how management
More informationCost of Capital, Valuation and Strategic Financial Decision Making
Cost of Capital, Valuation and Strategic Financial Decision Making By Dr. Valerio Poti,  Examiner in Professional 2 Stage Strategic Corporate Finance The financial crisis that hit financial markets in
More informationRelationship of Course to Rest of Curriculum This course maybe viewed as an introductory and preparatory course for graduate work
Stevens Institute of Technology Howe School of Technology Management Syllabus Financial Decision Making: MGT (615) Semester: Spring 2012 Instructor name and contact information Jan Klein 201.216.5612 Day
More informationFIN 301 SYLLABUS Corporate Finance Spring 2012
FIN 301 SYLLABUS Corporate Finance Spring 2012 Professor: Hunter M. Holzhauer, Ph.D. Office Number: REDC 291 Office Phone: (814) 8986326 Email: hmh14@psu.edu Office Hours: MTW 3:154:30pm (and by appointment)
More informationCFS. Syllabus. Certified Finance Specialist. International benchmark in Finance profession
CFS Certified Finance Specialist Syllabus International benchmark in Finance profession Certified Finance Specialist Summary: This award will provide candidates the opportunity to gain advanced level knowledge
More informationChapter 8. 48 Financial Planning Handbook PDP
Chapter 8 48 Financial Planning Handbook PDP The Financial Planner's Toolkit As a financial planner, you will be doing a lot of mathematical calculations for your clients. Doing these calculations for
More informationChapter 02 How to Calculate Present Values
Chapter 02 How to Calculate Present Values Multiple Choice Questions 1. The present value of $100 expected in two years from today at a discount rate of 6% is: A. $116.64 B. $108.00 C. $100.00 D. $89.00
More informationEXAM 2 OVERVIEW. Binay Adhikari
EXAM 2 OVERVIEW Binay Adhikari FEDERAL RESERVE & MARKET ACTIVITY (BS38) Definition 4.1 Discount Rate The discount rate is the periodic percentage return subtracted from the future cash flow for computing
More informationFinance 3130 Corporate Finiance Sample Final Exam Spring 2012
Finance 3130 Corporate Finiance Sample Final Exam Spring 2012 True/False Indicate whether the statement is true or falsewith A for true and B for false. 1. Interest paid by a corporation is a tax deduction
More informationPaper F9. Financial Management. Friday 7 June 2013. Fundamentals Level Skills Module. The Association of Chartered Certified Accountants.
Fundamentals Level Skills Module Financial Management Friday 7 June 2013 Time allowed Reading and planning: Writing: 15 minutes 3 hours ALL FOUR questions are compulsory and MUST be attempted. Formulae
More information1. If the opportunity cost of capital is 14 percent, what is the net present value of the factory?
MØA 155  Fall 2011 PROBLEM SET: Hand in 1 Exercise 1. An investor buys a share for $100 and sells it five years later, at the end of the year, at the price of $120.23. Each year the stock pays dividends
More informationStock and Bond Valuation: Annuities and Perpetuities
Stock and Bond Valuation: Annuities and Perpetuities Lecture 3, slides 3.1 Brais Alvarez Pereira LdM, BUS 332 F: Principles of Finance, Spring 2016 February 23, 2016 Important Shortcut Formulas Present
More informationCHAPTER 8 INTEREST RATES AND BOND VALUATION
CHAPTER 8 INTEREST RATES AND BOND VALUATION Answers to Concept Questions 1. No. As interest rates fluctuate, the value of a Treasury security will fluctuate. Longterm Treasury securities have substantial
More informationChapter 4: Time Value of Money
FIN 301 Homework Solution Ch4 Chapter 4: Time Value of Money 1. a. 10,000/(1.10) 10 = 3,855.43 b. 10,000/(1.10) 20 = 1,486.44 c. 10,000/(1.05) 10 = 6,139.13 d. 10,000/(1.05) 20 = 3,768.89 2. a. $100 (1.10)
More informationPowerPoint. to accompany. Chapter 5. Interest Rates
PowerPoint to accompany Chapter 5 Interest Rates 5.1 Interest Rate Quotes and Adjustments To understand interest rates, it s important to think of interest rates as a price the price of using money. When
More informationPractice Questions for Midterm II
Finance 333 Investments Practice Questions for Midterm II Winter 2004 Professor Yan 1. The market portfolio has a beta of a. 0. *b. 1. c. 1. d. 0.5. By definition, the beta of the market portfolio is
More informationThe City University of New York, College of Technology
The City University of New York, College of Technology Department of Business Managerial Finance (BUS 23402048) Prof. A. Zissu, Chairperson Prof. L. Bernard Spring 2013 Class Meets: Thursdays (6:00 PM
More informationNUS Business School. FIN2004X Finance. Semester I 2013/2014
NUS Business School FIN2004X Finance Semester I 2013/2014 COURSE INSTRUCTOR: Dr. Jumana Zahalka COURSE TUTORS: Name of Tutor Ms Irene Yap Mr Chong Lock Kuah NUS Email Account fnbv24@nus.edu.sg fnbv27@nus.edu.sg
More informationFNCE 301, Financial Management H Guy Williams, 2006
REVIEW We ve used the DCF method to find present value. We also know shortcut methods to solve these problems such as perpetuity present value = C/r. These tools allow us to value any cash flow including
More informationWORKBOOK ON PROJECT FINANCE. Prepared by Professor William J. Kretlow University of Houston
WORKBOOK ON PROJECT FINANCE Prepared by Professor William J. Kretlow University of Houston 2002 by Institute for Energy, Law & Enterprise, University of Houston Law Center. All rights reserved. TABLE
More informationTime Value of Money. 2014 Level I Quantitative Methods. IFT Notes for the CFA exam
Time Value of Money 2014 Level I Quantitative Methods IFT Notes for the CFA exam Contents 1. Introduction... 2 2. Interest Rates: Interpretation... 2 3. The Future Value of a Single Cash Flow... 4 4. The
More informationFinancial Management (F9)
Financial Management (F9) This syllabus and study guide is designed to help with planning study and to provide detailed information on what could be assessed in any examination session. THE STRUCTURE OF
More informationDISCOUNTED CASH FLOW VALUATION and MULTIPLE CASH FLOWS
Chapter 5 DISCOUNTED CASH FLOW VALUATION and MULTIPLE CASH FLOWS The basic PV and FV techniques can be extended to handle any number of cash flows. PV with multiple cash flows: Suppose you need $500 one
More informationFinance 331 Corporate Financial Management Week 1 Week 3 Note: For formulas, a Texas Instruments BAII Plus calculator was used.
Chapter 1 Finance 331 What is finance?  Finance has to do with decisions about money and/or cash flows. These decisions have to do with money being raised or used. General parts of finance include: 
More informationBond Valuation. What is a bond?
Lecture: III 1 What is a bond? Bond Valuation When a corporation wishes to borrow money from the public on a longterm basis, it usually does so by issuing or selling debt securities called bonds. A bond
More informationPrepared by: Dalia A. Marafi Version 2.0
Kuwait University College of Business Administration Department of Finance and Financial Institutions Using )Casio FC200V( for Fundamentals of Financial Management (220) Prepared by: Dalia A. Marafi Version
More informationFinal Exam Practice Set and Solutions
FIN469 Investments Analysis Professor Michel A. Robe Final Exam Practice Set and Solutions What to do with this practice set? To help students prepare for the final exam, three practice sets with solutions
More informationFundamentals Level Skills Module, Paper F9. Section A. Monetary value of return = $3 10 x 1 197 = $3 71 Current share price = $3 71 $0 21 = $3 50
Answers Fundamentals Level Skills Module, Paper F9 Financial Management December 2014 Answers Section A 1 A Monetary value of return = $3 10 x 1 197 = $3 71 Current share price = $3 71 $0 21 = $3 50 2
More informationFoundations in Financial Management (FFM) September 2016 to June 2017
Foundations in Financial Management (FFM) September 2016 to June 2017 This syllabus and study guide is designed to help with teaching and learning and is intended to provide detailed information on what
More information5. Time value of money
1 Simple interest 2 5. Time value of money With simple interest, the amount earned each period is always the same: i = rp o We will review some tools for discounting cash flows. where i = interest earned
More informationChapter 2 Present Value
Chapter 2 Present Value Road Map Part A Introduction to finance. Financial decisions and financial markets. Present value. Part B Valuation of assets, given discount rates. Part C Determination of riskadjusted
More informationCorporate Finance: Final Exam
Corporate Finance: Final Exam Answer all questions and show necessary work. Please be brief. This is an open books, open notes exam. For partial credit, when discounting, please show the discount rate
More information