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Fundamentals of Finance

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Fundamentals of Finance

Exam #2 Preview

Oct 29, 2012

- Power Point Slides
- Self test questions
- Past quizzes
- Homework problems
- Review questions

- Ch 7, p. 186 1, 2, 3, 8, 9, 10
- Ch 8, p. 2281, 3, 4, 5, 6, 8, 9
- Ch 9, p. 261 2, 3, 4, 7, 8

- Ch 7, p. 185 1, 2, 3, 6, 7
- Ch 8, p. 227All
- Ch 9, p. 261All

- Expected value (Mean) = u = E(VxP)
- Standard Deviation = square root of sum of P(V-u)2
- Coefficient of variation
(Standard Deviation / Mean)

- CAPM = K = Krf + B(Km – Krf)

- FV = n, i/y, pv, pmt=0,
- PV = n, i/y, pmt=0, fv
- FVa = n, i/y, pv=0, pmt
- PVa = n, i/y, pmt, fv=0
- FVad = n, i/y, pv=0, pmt, (1 + k)
- PVad = n, i/y, pmt, fv=0, (1 + k)
- PVp = Div/K

- ATKd = Kd(1 – T)
- Kps = Div/Net Price
- Kre = (D1/Price) + g (growth rate)
D1 = Do x (1 + g)

- Kcs(new) = (D1/Price – Float.) + g
- WACC = WTd x ATKd + WTp x Kps + WTcs x Kcs
- Breakpoint = Available debt or equity before cost of capital increases / Percent of debt or equity to total capital

- Scantron #882 – E
- Number 2 pencil (no pens)
- Financial Calculator
- No cell phones, lap tops
- Chapter 9 homework
- More tranquilizers/No roids

- List of formulas from the 3 chapters,
plus the math formulas

(see formula slides)

- Space on the exam for your calculations (no scratch paper allowed)

- Multiple choice – 21 (1.25 points each)
- Problems – 4 (4 parts each, 1.5 points each part)
- Multiple choice will include many calculations

- Fri10/26 9:00 – 11:00
- Mon10/29 9:00 – 11:00