# FNAN 307 E2

 Common Stock Valuation: The formula to find the price is ______ Common Stock Valuation: The formula to find the RRR is _____ fixed income securities bonds ____ debt has no collarteral Debenture In long-term bonds: Price tag = ____ Par Value = ____ Yield to Maturity = ____ Coupon Rate = ____ Years to Maturity = _____ -PVFVI/YrPMT (decimal must be multiplied by par)N To find the current yield on bonds ______ What is working capital? current assets - current liabilities On callable bonds, interest rates are ____ than current interest rates. higher The elements of callable bonds: Years to Call = ____ Yield to Call = ____ Price Tag = ____ Coupon Rate = ___ Call Price = ____ NI/YrPVPMT (coupon rate * par)FV (par + call premium) Beta Calculation: What is the holding period return? (Resale Price - Purchase Price) + Price total, dividends received, income received, cash receipts / purchase price What is the capital asset pricing model? RRR = Risk Free Rate (Rf) + [Beta(Return in Market - Risk free rate)] ____ is the benchmark for Beta 1 How to find beta: 2nd 82nd 7 and enter the x's and y's2nd 8 ↓ look for b What are the three main ways to value stock? zero growth (preferred)constant growth (common stock)variable growth (only measures the price tag) In stock valuation: How do you find the dividend yield? dividen yield = dividend (DPS)/price What % interest is a controlling interest in stockholder's rights? 5% For zero growth: how do you find return? how do you find the price? return = div/priceprice= div/return For constant growth: how do you find return? how do you find price? return = next div/price + growth rateprice = next div/RRR - growth For variable growth: How do you find the price? Price = next div/RRR - growth For Free Cash Flow: What is the return on stock? what is the expected dividend? return on stock = (next yrs div/price of stock) + growthexpected div = Last div paid * (1 + growth rate of divs) In FCF what is the price of the company? price = next yrs anticipated FCF/ RRR - G How do you find FCF? NOPAT (+depreciation/amortization)(-Inv in capital) What kind of FCF do we work with? Levered (management efficiency) How do you find NOPAT? EBIT * (1.0 - Tax Rate) What are paybacks? how fast recover initial investment What does the Internal Rate of Return tell you when determining best project? % it takes to get to 0 NPV When determining best project, if the NPV > 0 the project is ____ acceptable Authorjessenliz2010 ID311066 Card SetFNAN 307 E2 Descriptionexam 2 Updated2015-11-07T20:11:00Z Show Answers