Principles of corporate finance valuing bonds

The answer is simple: You take the cash flows and discount them at the opportunity cost of capital.

Principles of corporate finance valuing bonds

Calculator This course requires considerable mathematical computation. Although much of it is relatively simple, access to an appropriate calculator is necessary. If you intend to purchase a calculator for this course, you will find it useful to purchase a financial calculator.

In addition to the lectures, 1 hour tutorial class will be offered from week 2 until week Tutorials Tutorial classes will be held weekly from week 2 to Membership of tutorial classes is to be finalised by the end of the second week of semester.

Students wishing to swap between tutorial classes after this time are required to present their case to the Lecturer-in-Charge, but should be aware that such a request may not be approved.

Tutorials are an important component of your learning in this course. The communication skills developed in tutorials by regularly and actively participating in discussions are considered to be most important by the School and are highly regarded by employers and professional bodies.

Workload The information below is provided as a guide to assist students in engaging appropriately with the course requirements. The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

The University expects full-time students i.

Principles of corporate finance valuing bonds

Learning Activities Summary The schedule of lecture topics for this course is as follows: Capital Budgeting — introduction to various capital budgeting criteria, application of criteria to investment proposals, advantages and disadvantages of each criteria.

Cash Flow Estimation and Analysis of Risk — determination of relevant cash flows for investment analysis, sources of risk in cash flow forecasting, assessment of forecasting risk, implications of management options in project evaluation.

Cost of Capital — determination of cost of equity, cost of preference share, cost of debt and weighted average cost of capital WACC. Capital Structure and Leverage — introduction to common types of long term capital, Modigliani and Miller capital structure decision, effects of corporate taxes and effects of financial distress.

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Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned. Assessment must maintain academic is a platform for academics to share research papers. Principles of Corporate Finance.

Read Chapter 3 (Valuing Bonds) Add to My Bookmarks Export citation. Type Book Author(s) Richard A.

Principles of corporate finance valuing bonds

Brealey, Stewart Myers, Franklin Allen Corporate Finance and Investment: Decisions an Previous: Fundamentals of Corporate Finance. Library availability.

Principles-of-corporate-financeth-edition | Kamiliya Tei -

No, low-coupon bonds have longer durations (unless there is only one period to maturity) and are therefore more volatile (e.g., if r falls from 10% to 5%, the value of a 2-year 10% bond rises from to (a rise of %). Questions and Problems Page 1 of 3 Corporate Finance eBook 9/e Content Chapter8: Interest Rates and Bond Valuation Questions and Problems 1.

Valuing Bonds What is the price of a year, zero coupon bond paying $1, at maturity if the YTM is: BASIC (Questions 1– 12) a. 5 percent? Corporate finance is an area of finance that deals with sources of funding, the capital structure of corporations, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources.

PRINCIPLES of CORPORATE FINANCE SIXTH EDITION RICHARD A. BREALEY SPECIAL ADVISER TO THE GOVERNOR, BANK OF ENGLAND Valuing Long-Lived Assets 35 Valuing Cash Flows in Several to Value Bonds 49 What Happens When Interest Rates Changel / .

Valuing Emerging Market Companies | Valuation Course | Redcliffe