... goods and services now rather than in the future.
Time Value of Money and Investment Analysis:
Table of Contents
Part I.
Introduction 1
Basic Concepts and Terminology 3
Categories of Time Value of ... 3
Time Value of Money and Investment Analysis
Part I: BASIC CONCEPTS AND TERMS
Time value of money problems arise in many different forms and...
... ể ọ
CF CF CF FV
0 1 2 3 n
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1. Giá trị tương lai của tiền tệ
1. Giá trị tương lai của tiền tệ
2. Giá trị hiện tại của tiền tệ
2. Giá trị hiện tại của tiền ...
1 2 3
Lãi 10 11 12. 1
Giá trị 100 110 121 133.1
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1...
... dollar return and rate of return.
• Define risk and calculate the expected rate of return, standard
deviation, and coefficient of variation for a probability distribution.
• Specify how risk aversion ... THE MARKET RISK AND THE REQUIRED RETURN OF A 50-50
PORTFOLIO OF HIGH TECH AND COLLECTIONS? OF HIGH TECH AND U.S.
RUBBER?
ANSWER: [SHOW S5-45 AND S5-4...
... yrs.
Answers and Solutions: 6 - 1
Chapter 6
Time Value of Money
SOLUTIONS TO END -OF- CHAPTER PROBLEMS
10%
7%
6.5%
6-6 0 1 2 3 4 5
| | | | | |
300 300 300 300 300
FVA
5
= ?
With a financial calculator ... $100/0.14 = $714.29.
When the interest rate is doubled, the PV of the perpetuity is halved.
6-20 a. Begin with a time line:
Answers and Solutions: 6 - 3
i = ?
7%
followin...
... Change N = 1, PV = ? PV = $1,047.62.
Answers and Solutions: 7 - 2
SOLUTIONS TO END-OF-CHAPTER PROBLEMS
Answers and Solutions: 7 - 1
Chapter 7
Bonds and Their Valuation
... the going rate, and it is about
what the firm would have to pay on new bonds.
Answers and Solutions: 7 - 4
7-1 With your financial calculator, enter the following:
N = 10; I = YTM = 9%; PMT = ... d. Usi...
... of the EMH on
financial decisions; and discuss the results of empirical studies on
market efficiency and the implication of behavioral finance on those
results.
• Read and understand the stock ... useful information on common and preferred
stocks. Moreover, the valuation of stocks reinforces the concepts covered in
both Chapters 6 and 7, so Chapter 8 extends and reinforces tho...
... uses the rate of return concepts covered in previous chapters, along
with the concept of the weighted average cost of capital (WACC), to develop a
corporate cost of capital for use in capital ... independent, the firm should accept all
projects whose returns exceed their risk-adjusted costs of capital.
The appropriate costs of capital are summarized below...
... LEVEL OF INTEREST RATES. THIS IS
CALLED THE PROJECT COST OF CAPITAL IN CAPITAL BUDGETING.
4. FIND (A) THE PV OF THE EXPECTED CASH FLOWS AND/OR (B) THE ASSET’S
RATE OF RETURN.
5. IF THE PV OF THE ... VALUE OF THE TERMINAL VALUE OF THE INFLOWS,
COMPOUNDED AT THE COST OF CAPITAL, TO THE PRESENT VALUE OF THE COSTS.
HERE IS THE SETUP FOR CALCULATING PROJECT L’S MODIFIED IR...
... establishing its optimal capital
budget in practice.
Learning Objectives: 12 - 1
Chapter 12
Other Topics in Capital Budgeting
LEARNING OBJECTIVES
21st Century Educational Products
Other Topics in Capital ... Year t:
Using a financial calculator, input the following: CF
0
= -22500,
CF
1
= 23750, and I = 10 to solve for NPV
1
= -$909.09 ≈ -$909.
Using a financial c...
... “OPTIMAL CAPITAL STRUCTURE AND “TARGET
CAPITAL STRUCTURE. ”
ANSWER: [SHOW S13-16 HERE.] THE OPTIMAL CAPITAL STRUCTURE IS THE CAPITAL
STRUCTURE AT WHICH THE TAX-RELATED BENEFITS OF LEVERAGE ... optimal capital structure is that capital structure which
minimizes the firm’s WACC. Elliott’s WACC is minimized at a capital
structure consisting of 40% debt and 60% eq...
... stock price, and the firm’s capital structure.
Learning Objectives: 14 - 1
Chapter 14
Distributions to Shareholders:
Dividends and Share Repurchases
LEARNING OBJECTIVES
FUTURE PROSPECTS, AND (2) SINCE ... income/Number of shares
$2.25 = $1.08 million/Number of shares
Number of shares = 480,000.
With 480,000 shares outstanding, the total dividend that would be
paid would be $0.75...
... Moderate Relaxed
Current assets
(% of sales × Sales) $ 900,000 $1,000,000 $1,200,000
Fixed assets 1,000,000 1,000,000 1,000,000
Total assets $1,900,000 $2,000,000 $2,200,000
Debt (60% of assets) $1,140,000 ... firm's current assets equal
$148,750 ($35,750 + $47,000 + $66,000). Therefore, for its current
ratio to increase to 2.0, it must reduce accounts payable to a level...