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"Stock Valuation 2 208 97 Basic Corporate Finance"


Stock Valuation 2-208-97 Basic Corporate Finance

Stock Valuation 2-208-97 Basic Corporate Finance Albert Lee Chun Lecture 4 Overview of Corporate Finance (Ch.1) Time Value of Money and Discounting (Ch 5, Ch 6) Interest Rates and Bond Valuation (Ch..
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pages: 63   size: 779KB    md5: 510ac41f1b89a368b66bb6ec8191c9ca    
to Corporate Finance What is finance?
.. financing should be used? If a firm has $200 million of cash flow, but needs reinvest $120 million, what should be done with the remaining $80 million of cash. Pay it out as a dividend or repurch..
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pages: 27   size: 190KB    md5: 2c9627656989ed04cdaa43a5948f1aa3    
Fundamentals of Valuation P.V. Viswanath Partly based on ..
.. in the future cash flows (Higher Risk =>Higher Discount Rate) Rate Terminology Interest rate exchange rate between earlier money and later money (normally the later money is certain). Discount Ra..
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pages: 46   size: 1.1MB    md5: dd6e1ad9b103d2bf8578fff2122ad256    
Learning Objectives - The basic features of different ..
.. Supply periodic financial statements Maintain certain ratios Negative covenants not to do Restricts the amount of debt the firm can take on Prevents the firm from acquiring or disposing of assets..
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to Corporate Finance Every decision that a business makes ..
to Corporate Finance Every decision that a business makes has financial implications, and any decision which affects the finances of a business is a corporate finance decision. Defined broadly, ever..
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pages: 15   size: 80KB    md5: 910243843a12791d86850ad293c8db84    
Financial Statements, Taxes & Cash Flow
.. of the firm. Assets are listed at historical costs less accumulated depreciation this may bear little resemblance to what they could actually be sold for today. The balance sheet also does not in..
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pages: 30   size: 123KB    md5: ed359ee0c1a4f443d8b28a9b7b130d50    
Interest Rates and Bond Valuation
.. Basis) Settlement and maturity need to be actual dates The redemption and Pr need to given as % of par value Click on the Excel icon for an example Differences Between Debt and Equity Debt Not an..
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pages: 78   size: 1.4MB    md5: 4b3a50b4b132a69ac8e727f078f7a4e8    
Stock & Bond Valuation
.. to Maturity (YTM) is the rate of return investors earn if they buy the bond at and hold it until maturity. The YTM on a bond selling at par ( Par ) will always equal the coupon interest rate. Whe..
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pages: 42   size: 1.6MB    md5: 411f6a0208fd7364e19408f4ff83cb7e    
Discounted Cash Flow Valuation: The Inputs
.. end? When will the equity risk premium stop climbing? Notice The effect of 9/11 on implied premiums The corrosive effect of accounting scandals at Enron, Global Crossing and Worldcom on equity ri..
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pages: 29   size: 173KB    md5: 013a36115f02f809056a95ae0447b7d6    
The Investment Principle: Risk and Return Models
.. dominant investment, with a higher expected return and a lower standard deviation. The variance of a portfolio As you combine Disney and Aracruz in a portfolio, the variance declines (because the..
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pages: 26   size: 1.3MB    md5: eedc30c8afd7ef3fb0a3d780f72227b5    
FINANCE 1. Professor Andr Farber
.. creation if M/B > 1 2. Compare return on equity to the opportunity cost of equity Value creation if ROE > Opportunity Cost of Equity M/B vs ROE Simplifying assumptions: Expected net income income..
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pages: 18   size: 147KB    md5: 4c66c7d328f4d31e4bb33965583f2ebe    
Interest Rates and Bond Valuation
.. with principal and interest in arrears Treasury Securities Federal government debt T-bills pure discount securities with original maturity of one year or less T-notes coupon debt with original ma..
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pages: 43   size: 1.3MB    md5: bdb87b42b25a6c4706af60da071f888e    
.. on a quoted rate of 6 percent. The effective monthly interest rate is: To calculate the monthly payment, we take the $200,000 borrowed as the present value of the annuity of payments required to ..
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pages: 33   size: 1.1MB    md5: 0652b48226bee4e1e5bc73fd4909c0ca    
Corporate Finance Everything ..
.. Time Mutually exclusive projects: Different lives same risk Use NPV-assumes replacement projects have zero NPV. OK for projects with long lives Use NPV-with specific replacements that make projec..
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pages: 18   size: 34KB    md5: b8549509044ad4bb30223d7413242863    
Finding the Right Financing Mix: The Capital Structure ..
.. long-term survival 3. Maintain Predictable Source of Funds 4.05 4. Maximize Stock Price 3.99 5. Maintain financial independence 3.88 6. Maintain high debt rating 3.56 7. Maintain comparability wi..
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pages: 41   size: 246KB    md5: 6e7fb7e607991edf30cecc5e5eca1d1f    
to Bonds Description and Pricing P.V. Viswanath
.. discretion payment priority at liquidation is below all bonds. It resembles debt because: Dividend amounts are fixed, and potentially adjustable like coupon payments. Credit Risk Corporate bonds ..
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pages: 41   size: 1.1MB    md5: 602ffec6666a17a413059a2549556053    
Project Finance - Professor Pierre Hillion
.. 100, the debt is worth its face value of 30 and the equity is worth 70. There is no possibility of default. Corporate financed investment Assets are reduced by 5 in both states of the world. The ..
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Lecture 5 & 6 Security Valuation Corporate Finance
.. as a percentage of earnings. is th Return on Equity (ROE) note that: in the special case that Change in Working Capital is zero: EPS = Would be Free Cash Flow to equity if Net Investment were zer..
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pages: 25   size: 174KB    md5: 721685ea7a61d6db88b290dcac2b62b8    
Valuation of Alcoa
.. 0.71 0.39 Most aggressive growth strategy in the industry (builds on high competency and technology) In alumina low-cost brownfield projects (refining projects will increase the existing base wit..
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pages: 28   size: 265KB    md5: c5e853c7eba95eb140721a0dc5b88963    
Bond valuation Zero coupon bond valuation and to interest ..
.. = 6.00/(0.14 0.07) = $85.7143 Step 2: V = V /(1+k) = 85.7143/(1+0.14) $9.24 The stock is forecasted to be worth $85.71 per share exactly 17 years from today (t=17). Today's PV of this year 17 val..
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pages: 43   size: 278KB    md5: 9f5f58501fdab3978313877628778cfd    
Finance Theory II (15.402) CORPORATE FINANCE
.. assume the firm raises cash through debt or equity offerings (in Wilson, assume if is from the Bank) Pro Forma Statements Use financial ratios to help inform project Look at trends through time t..
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pages: 26   size: 979KB    md5: ed213baf9c5c43bd97e1f5eb0554280f