October 22, 2018 Chapter 9: Time Value of Money continued
- Read Chapter 9: Stocks and Their Valuation Chapter 9 PPT
- Legal Rights and Privileges of Common Stockholders
- Control of the Firm
- The Preemptive Right
- Types of Common Stock
- Stock Price versus Intrinsic Value
- The Discounted Dividend Model
- Definitions
- Expected Dividends as the Basis for Stock Values
- Constant Growth Stocks
- Valuing Nonconstant Growth Stocks
- Enterprise-Based Approach to Valuation (FCF)
October 24, 2018 Review and Finish Chapter 9: Stocks and Their Valuation
October 15, 2018 Chapter 8: Risk and Rates of Return
- Chapter 8: Risk and Rates of Return Chapter 8 PPT
- The Risk-Return Trade-off
- Stand Alone Risk
- Risk
- Probability Distributions
- Expected Rates of Return
- Past Realized Rates of Return
- Standard Deviation
- Coefficient of Variation
- Risk Aversion and Required Returns
- The CAPM
- Expected Portfolio Returns
- Portfolio Risk - correlations
- The Beta Coefficient - Risk in a Portfolio Context
- Risk versus Rates of Return
- Market Risk Premium
- Security Market Line Equation
- Impact of Expected Inflation
- Concerns about Beta and CAPM
October 17, 2018 Chapter 7: Bonds and Their Valuation
- Chapter 7: Bonds and Their Valuation Chapter 7 PPT
- Who Issues Bonds?
- 4 Key Characteristics of Bonds
- 1. Par Value
- 2. Coupon Interest Rate
- 3. Maturity Date
- 4. Call Provisions
- Also note: Sinking Funds and convertible bonds, TIPS
- Bond Valuation
- The Coupon is an annuity
- The Final Payment is a lump sum
- Bond Yields
- Yield to Maturity
- Yield to Call
- Changes in Bond Values over Time
- Bonds with Semiannual Coupons
- Assessing a Bond's Riskiness
- Price Risk
- Reinvestment Risk
- Default Risk
October 9, 2018 Chapter 5: Time Value of Money continued
- Read Chapter 5: Time Value of Money Chapter 5 PPT
- 5 buttons on your calculator: N I/YR PV PMT and FV
- Future Values
- Present Values and discounting
- Payments and number of compounding periods
October 11, 2018 Chapter 6: Interest Rates
- Read Chapter 6: Interest Rates Chapter 6 PPT
- The Cost of Money
- Interest Rate Levels
- Federal Funds (and the Fed Funds Rate) - LIBOR and short-term interest rates
- Determinants of Market Interest Rates
- The Real Risk-Free Rate of Interest, r*
- The Nominal (or Quoted), risk-free rate of interest, r(rf)= r* + IP
- Default Risk Premium (DRP)
- Liquidity Premium (LP)
- Maturity Risk Premium (MRP)
- The Term Structure of Interest Rates
- The Yield Curve
October 2, 2018 Wall Street Journal Assignment #2
- Review Exam #1: Be prepared to correct the exam with notes, the eText, your computer, etc.
- Read About Insurance Wall Street Journal Guides
- Part II of the Internet Assignments on Personal Finance http://online.wsj.com/ad/fin_plan4.html
- Overall: A Financial Plan (WSJ) Wall Street Journal Guide to Financial Planning
- 25 points (WSJ 2)
- Life, Health, and Auto Insurance
- Also Taxes - personal income taxes
- What are Tax Sheltered Investments (and Annuities)
October 4, 2018 Chapter 5: Time Value of Money
- Read Chapter 5: Time Value of Money Chapter 5 PPT
- Will you be able to retire?
- 5 buttons on your calculator: N I/YR PV PMT and FV
- Future Values
- Present Values and discounting
- Payments and number of compounding periods
September 25, 2018 Review of all material so far
September 27, 2018 Exam I: Chapters 1 - 4 & 16
September 18, 2018 Chapter 16: Financial Planning and Forecasting
- Read Chapter 16 - Chapter 16 PPT
- Strategic Planning
- Sales Forecast
- The AFN Equation - Additional Funds Needed
- Excess Capacity Adjustments
- Forecasted Financial Statements - Proforma Statements
September 20, 2018 Chapter 16: Continued
- Read Chapter 16 - Chapter 16 PPT
- Strategic Planning
- Sales Forecast
- The AFN Equation - Additional Funds Needed
- Excess Capacity Adjustments
- Forecasted Financial Statements - Proforma Statements
Problems worked on in class, September 20, 2018
September 11, 2018 Chapter 3: Financial Statements and Cash Flow
- Read Chapter 3 - Chapter 3 PPT
- Financial Statements
- Balance Sheet: Assets and Liabilities + Stockholder's Equity
- Income Statement: Revenues, Expenses, and Profits
- EBITDA
- EBIT or Operating Income
- Statement of Cash Flows: Operating, Long-Term Investing, and Financing Activities
- Statement of Stockholder's Equity
- FREE CASH FLOW
- MVA and EVA
- Save Individual Income Taxes for later
September 13, 2018 Chapter 4: Financial Ratios
- Read Chapter 4 - Chapter 4 PPT -
- Liquidity Ratios - Will the firm be able to pay off it's debts (ST)?
- Asset Management Ratios- Turnover ratios: Sales divided by an asset, DSO: Accounts Receivable - how many days of sales are tied up in receivables?
- Debt Management Ratios - How effectively a firm manages it's debt: more debt=more risk
- Profitability Ratios - Combined effects of the above on operating results
- Market Value Ratios - Stock price versus earnings and book value
September 4, 2018 Chapter 2: Financial Markets and Institutions
September 6, 2018 Credit, Borrowing, and Buying a Car