Question 1 (5 points) $100 today is worth the SAME as $100 tomorrow. Your Answer Score Explanation True False Correct 5.00 Correct. You understand time value Total 5.00 / 5.00 Question Explanation We have assumed that time value of money is positive. Question 2 (5 points) $100 invested for 10 years at 12% interest is worth more in FV terms than $200 invested for 10 years at 4% interest. Your Answer Score Explanation True Correct 5.00 Correct. You know the mechanics for calculating
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Aim of the report The aim of the report is to use different valuation techniques to see if the current share price of Tesco plc is fair‚ undervalued or overvalued. Some of the findings will be compared with other firms in the same industries and share holders will be informed on whether they should buy‚ hold or sell. Background information on Tesco Tesco is the largest supermarket retail chain in the United Kingdom with Sainsbury being their closest rival. It is also the third largest retail
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Ødegaard 2006 LECTURES ON CORPORATE FINANCE - (Second Edition) © World Scientific Publishing Co. Pte. Ltd. http://www.worldscibooks.com/economics/6188.html Contents 1 Finance 2 Axioms of modern corporate finance 3 On Value Additivity 4 On the Efficient Markets Hypothesis 5 Present Value 6 Capital Budgeting 7 Valuation Under Uncertainty: The CAPM 8 Valuing Risky Cash Flows 9 Introduction to derivatives. 10 Pricing Derivatives 11 Pricing of Multiperiod‚ Risky Investments 12 Where To Get State Price Probabilities
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1 Reading notes from Irving Fisher’s The Theory of Interest‚ 1930 Preface -- It was the misunderstanding of my theory of interest put forward in my 1907 book the Rate of Interest that led me to adopt the catchword “investment opportunity” as a substitute for the inadequate term “productivity” which had come into general use. This combined with my early “impatience theory” led to the impatience and opportunity theory which can be said to be distinct from all other theories of interest because
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This course covers fundamental concepts and techniques of financial forecasting and financial analysis including time value of money‚ cost of capital‚ capital investment decisions‚ product costing and lease-buy analysis. Course Outline I. Time Value of Money ....................................................................................4 A. Present Value and Future Value 1. Discrete Compounding 2. Compound Interest Tables 3. Continuous Compounding 4. Effective
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Money Money doesn’t buy happiness but it helps. Money has become one of the main things in our modern life. Some people live their lives to earn money. They work hard‚ trying to earn as much money as they can. Some of them become crazy about it and lose their dignity hunting money. They don’t appreciate such important things as family‚ friendship‚ love and other feelings. Such people become greedy‚ they spend their lives in loneliness. I don’t deny that money influences our life a lot. As W
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Chapter 9 # 17: Present values Jack Hammer invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also‚ he believes that at the end of the third year he will be able to sell the stock for $33. What is the present value of all future benefits if a discount rate of 11 percent is applied? (Round all values to two places to the right of the decimal point.) Answer: The following formula calculates
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Which one of the following statements is correct concerning annual percentages rates (APRs)? Answer: The APR is equal to the monthly interest rate multiplied by 12 Give an interest rate of zero percent‚ the future value of a lump sum invested today will always: Answer: remain constant Answer: II and IV A firm created as a separate and distinct legal entity that may be owned by one or more individuals or entities is called a: corporation The capital structure of a firm refers to the
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Chapter 6 The Time Value of Money-Annuities and Other Topics 6.1 Annuities 1) You wish to borrow $2‚000 to be repaid in 12 monthly installments of $189.12. The annual interest rate is: A) 24%. B) 8%. C) 18%. D) 12%. 2) If you have $20‚000 in an account earning 8% annually‚ what constant amount could you withdraw each year and have nothing remaining at the end of five years? A) $3‚525.62 B) $5‚008.76 C) $3‚408.88 D) $2‚465. 3) If you invest $750 every six months at 8% compounded semi-annually
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to evaluate the company’s stock and factors which affect company’s P/E ratio will be listed. Furthermore‚ discounted dividend valuation model will be demonstrated and fundamental factors which impact the share pricing will be analysed. Finally‚ the value of ICC at 30 June 2010 will be calculated using P/E ratio and DDM model. Meantime‚ the weakness of those two models will be illustrated‚ and alternative methodology will be applied to calculate the intrinsic valuation of ICC and then compare the result
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