# FNAN 307 E2

### Card Set Information

 Author: jessenliz2010 ID: 311066 Filename: FNAN 307 E2 Updated: 2015-11-07 15:11:00 Tags: FNAN 307 Folders: FNAN 307 Description: exam 2 Show Answers:

Home > Flashcards > Print Preview

The flashcards below were created by user jessenliz2010 on FreezingBlue Flashcards. What would you like to do?

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
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

What would you like to do?

Home > Flashcards > Print Preview