FNAN 307 E2

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Author:
jessenliz2010
ID:
311066
Filename:
FNAN 307 E2
Updated:
2015-11-07 15:11:00
Tags:
FNAN 307
Folders:
FNAN 307
Description:
exam 2
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  1. Common Stock Valuation:
    The formula to find the price is ______
  2. Common Stock Valuation:
    The formula to find the RRR is _____
  3. fixed income securities
    bonds
  4. ____ debt has no collarteral
    Debenture
  5. In long-term bonds:
    Price tag = ____
    Par Value = ____
    Yield to Maturity = ____
    Coupon Rate = ____
    Years to Maturity = _____
    • -PV
    • FV
    • I/Yr
    • PMT (decimal must be multiplied by par)
    • N
  6. To find the current yield on bonds ______
  7. What is working capital?
    current assets - current liabilities
  8. On callable bonds, interest rates are ____ than current interest rates.
    higher
  9. The elements of callable bonds:
    Years to Call = ____
    Yield to Call = ____
    Price Tag = ____
    Coupon Rate = ___
    Call Price = ____
    • N
    • I/Yr
    • PV
    • PMT (coupon rate * par)
    • FV (par + call premium)
  10. Beta Calculation:
    What is the holding period return?
    (Resale Price - Purchase Price) + Price total, dividends received, income received, cash receipts / purchase price
  11. What is the capital asset pricing model?
    RRR = Risk Free Rate (Rf) + [Beta(Return in Market - Risk free rate)]
  12. ____ is the benchmark for Beta
    1
  13. How to find beta:
    • 2nd 8
    • 2nd 7 and enter the x's and y's
    • 2nd 8 ↓ look for b
  14. What are the three main ways to value stock?
    • zero growth (preferred)
    • constant growth (common stock)
    • variable growth (only measures the price tag)
  15. In stock valuation:
    How do you find the dividend yield?
    dividen yield = dividend (DPS)/price
  16. What % interest is a controlling interest in stockholder's rights?
    5%
  17. For zero growth:
    how do you find return?
    how do you find the price?
    • return = div/price
    • price= div/return
  18. For constant growth:
    how do you find return?
    how do you find price?
    • return = next div/price + growth rate
    • price = next div/RRR - growth
  19. For variable growth:
    How do you find the price?
    Price = next div/RRR - growth
  20. For Free Cash Flow:
    What is the return on stock?
    what is the expected dividend?
    • return on stock = (next yrs div/price of stock) + growth
    • expected div = Last div paid * (1 + growth rate of divs)
  21. In FCF what is the price of the company?
    price = next yrs anticipated FCF/ RRR - G
  22. How do you find FCF?
    NOPAT (+depreciation/amortization)(-Inv in capital)
  23. What kind of FCF do we work with?
    Levered (management efficiency)
  24. How do you find NOPAT?
    EBIT * (1.0 - Tax Rate)
  25. What are paybacks?
    how fast recover initial investment
  26. What does the Internal Rate of Return tell you when determining best project?
    % it takes to get to 0 NPV
  27. When determining best project, if the NPV > 0 the project is ____
    acceptable

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