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HFT 4464

HFT 4464. Final Exam Review. Final Exam is Cumulative. Chapter 1 through Chapter 10 50 Multiple Choice Questions Vocabulary oriented (16) Problems (34). Vocabulary. Advantages/disadvantages of a corporation Three factors that determine value of future dividends Bond ratings

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HFT 4464

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  1. HFT 4464 Final Exam Review

  2. Final Exam is Cumulative • Chapter 1 through Chapter 10 • 50 Multiple Choice Questions • Vocabulary oriented (16) • Problems (34)

  3. Vocabulary • Advantages/disadvantages of a corporation • Three factors that determine value of future dividends • Bond ratings • Stock trading – Primary / Secondary market • Debenture • Common stock features

  4. Vocabulary • Correlation of coefficient • Diversification • How to read a bond quotation • Issuance costs • Mortgage bonds • Debentures • Senior, junior, subordinated, unsubordinated • Which have seniority • Bonds • Preferred stock • Common stock

  5. Calculations • Holding period return • Bond market value / yield to maturity • Weighted average cost of capital • Present / future values – lump sum & annuity • Net cash flow on sold asset • Stock value based on dividend growth rates

  6. Calculations • Payback period • Discounted payback • Net Present Value • Profitability index • IRR • Ratios • ADR • REVPAR

  7. Chapter 5 • Time value of money • Future value of a lump sum investment • Table p. 91 • Present value of a lump sum payment • Table p. 93 • Future value of a series of payments made • Table p. 96 • Present value of a series of payments received • Table p. 102

  8. Chapter 6 • Yield to maturity of a bond (calculation) • Value of preferred stock • V = D/I • Other formats

  9. Chapter 6 • Bond Market Rate vs. Coupon Rate • Market Rate > Coupon Rate • Bond Value is ? Par value • Market Rate = Coupon Rate • Bond Value is ? Par Value • Market Rate < Coupon Rate • Bond Value is ? Par Value

  10. Chapter 8 • Cost of Capital • Cost of debt • Cost of preferred stock • Cost of external equity • Weighted Average Cost of Capital

  11. Chapter 9 • Capital Budgeting • Calculate Net Cash Flows for a project

  12. Chapter 10 • Capital Budgeting • Payback period • Discounted payback period • Net present value • Profitability index • Internal rate of return

  13. No need to review: • Standard deviation • Variance • Beta • MIRR • Ratios other than REVPAR & ADR

  14. Summary • Scantron required !!! • Bring a calculator !!! (And maybe a spare?) • Pencils • Scratch paper provided • Bring your book for the tables! • Exam time: • Tuesday 12/7/10 at 4:00 pm to 6:50 pm

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