Parkes' Financial Managment Assignments Page

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Section 1 Grades                Section 2 Grades

 Course Assignments:

Week 11

November 12, 2007 Chapter 4: Preferred and Common Stock Valuation

• Bring your calculators today!!
• Common Stock Valuation
• Free Cash Flow Revisited
  • Forecasting FCF
  • Using Income Statements for FCF
  • Calculating Stock Valuation from Expected FCF
• Return of the second draft of the Investment Project
• Discuss the Final Investment Proposal submission - Due Wednesday, November 14 for 30 points.

• Bring your calculators today!!
• The Final Investment Proposal submission is Due Saturday, November 17 by 7 pm for 30 points.
• Review for the Final Exam
• Problems on Bonds, Stocks and Capital Budgeting continued  
• Answers for the Bond Homework - discussed today in class
• MAKE SURE THE WORST CASE SCENARIO CONCLUDES - "DO the Project"!!

Week 12

November 19, 2007 Final Exam at 8 am

Week 10

November 5, 2007 Chapter 7: Financial Statements

• Bring your calculators today!!
• Chapter 7 PPT from the textbook author.
• Chapter 7 PPT The Basics of CASH FLOW - Available NOW!  
• Financial Statements: Balance Sheet and Income or Profit and Loss Statement (P & L)
• Financial Statements: Statement of Cash Flows
  • Operating Cash Flow
  • Investment Cash Flow
  • Financing Cash Flow
  • Connection to the Balance Sheet
• Return of the first draft of the Investment Project
• Discuss the next draft of the Investment Project - Due in my email box before class on Wednesday, November 7 for 10 points.

• Bring your calculators today!!
• Turn in the Second Draft of Investment Proposal for your company - 10 points.
• Financial Statements and Planning
• Chapter 7 PPT Planning  Available NOW!
• Projections or Proforma Analysis
• Expected FCF - looking at the Value of the company by Long term Expected Free Cash Flows
• Review Capital Budgeting Homework Problems - Answers - can be downloaded HERE
• Chapter 4 PPT from the textbook author.
• Stock Valuation - Finish Chapter PPT
• Work on Stock Valuation Problems - Available NOW

Week 9

October 29, 2007 Chapter 4: Valuation of Securities

• Bring your calculators today!!
• Begin Chapter 4: Bond Valuation in the first period.
• Chapter 4 PPT  
• Security Valuation
• Bond Valuation - 4 key points
  • Face Value (often $1,000 is used)
  • Coupon Payment = Face Value x Coupon Rate
  • Maturity Period (number of years until the bond matures)
  • Type of Bond (for example: U.S. Treasury, ATT Corporate, GMC Corporate, or Texas Utility bonds)
• The formula for Bond Valuation Calculation: An annuity plus a Lump Sum
• Bond Homework for practice - not assessed.
• The Consol Bond: Bond Perpetuity - it never matures, note how this bond is calculated
• On Wednesday, you will turn in the First Draft of Investment Proposal for your company - See Chapter 13 PPT Slide for the Assignment. (10 pts)
• Quiz on calculating IRR - the trial method - See Chapter 13 PPT from the book for this method. (click on Chapter 13)

• Bring your calculators today!!
• MIRR - Modified Internal Rate of Return
• Compound each cash flow forward
• Add the final year cash flow
• Use the Time Value of Money formula for Interest Rates to find MIRR
• Quiz - Calculating the MIRR
• Turn in the First Draft of Investment Proposal for your company - 10 points.

Week 8

October 22, 2007 Chapter 12: Capital Budgeting and Evaluating Cash Flows

• Bring your calculators!!
• Review the Midterm Test - Make Corrections to your exam during the first period.
• Our "Chapter 12 and 13" PPT for the week  
• Chapter 12: Some basics on cash flows and capital budgeting.
• Chapter 13: Decision Rules - the Tools of Capital Budgeting
  • Payback Period
  • Discounted Payback Period
• Capital Budgeting Problems

Week 7

October 15, 2007 Chapter 5: Risk and Return - continued

• Work with your calculators day!!
• Finish Chapter 5 and preview for the Midterm test on Monday.
• Chapter 5 (Beta) PPT  
• The Characteristic Line
• Beta
  • Unsystematic Risk
  • Required Rates of Return and the Security Market Line
  • CAPM and Challenges to CAPM
  • Returns and Stock Prices
• Time Value of Money Answers
• Annuity Answers - Homework #2
• Practice Test from Nov. 2005
• The Answers in Word
• The Answers in Excel
• The last section in Chapter 5 and in the PPT on Stock Valuation will not be on the test!
• Perpetuity - an infinite number of payments.
• EAR - Effective Annual Rate

• PPT Assignment 2e is due today.
• Our Class PPT   PowerPoint from the Book's Authors - Ch. 3
• The Time Value of Money
  • The Interest Rate
  • Simple interest
  • Compound Interest
  • Future Value
  • Present Value
  • Calculating n - Doubling (See p. 47 for the "Rule of 72")
  • Calculating the interest rate
• Time Value of Money Problems
• China Construction Bank raises huge amount of capital!
• What is the Federal Reserve System?
  • Functions:
    • Control inflation
    • In U.S.: Maintain Economic Growth
    • Bank Safety
  • Tools:
    • Increase/Decrease the Money Supply: See the Structure of the FOMC (second paragraph).
      Also called Open Market Operations: See the Fed's explanation here.
    • Increase/Decrease the Discount Rate: See the Fed's explanation here.
    • Increase/Decrease the Required Reserve Ratio: See the Fed's explanation here.
  • The U.S. Central Bank  Also see my website for Macroeconomics click "Fed."
    
  • The People's Bank of China  China's central bank raised rates again: Bloomberg article. (Word doc)
  • Other Central Banks  The website is the Bank of International Settlements website.
    Another good website: site-by-site.

Week 2

September 10, 2007     Chapter 2: Continue Financial Statements/p>

• PowerPoint for Week 2
• The Tax Structure
  • Calculating a corporation's taxes:
  • Total Taxes
  • Average Tax Rate
  • Marginal Tax Rate
  • For Monday: Assignment 2a: Calculate the tax rates for the company you chose for years 2002-2006
    as well as the average tax rate and the variance.
• The Financial Environment
  • Financial Markets
  • Financial Intermediaries - Banks, Brokers and Mutual Funds, for example
  • Secondary Markets - The NYSE, the NASDAQ, Mortgage Markest, for example
  • Allocation of Funds and Interest Rates
    • Default Risk
    • Market and Liquidity Risk
    • Maturity Risk
    • Inflation Risk
  • The Term Structure of Interest Rates: The Yield Curve
  • For Wednesday: Assignment 2b: In Excel, graph the U.S. Treasury Yield Curve. (5 pts) Each Student MUST
    bring a copy to class with a sentence explaining what you believe will happen to short term rates in the future.
    Click on the following to find the current daily U.S. Treasury rates (use Sept. 10 or 11, 2007).

September 12, 2007    Value Creation/Destruction

• Financial Statements - A Comprehensive Look
  • The Balance Sheet
  • The Income Statement
  • The Cash Flow Statement
• For Tutorial on Monday: Assignments 2c and 2d: Annual Reports - See the PowerPoint slides for full analysis.
• For Monday, see the PowerPoint slides, your group is to present your results of the Annual Reports
  for the company you are analyzing. Summarize your results in a 5 or 6 slide PowerPoint presentation.

Week 1

September 3, 2007     Introduction and Overview

• PowerPoint for Week 1
• Three types of Business Organizations
  • Sole Proprietorship
  • Partnership
  • Corporation
• Financial Goal of a Business: Shareholder wealth maximization
• An Introduction to Free Cash Flow and Weighted Average Cost of Capital

September 5, 2007    Value Creation/Destruction

• For Monday, see the PowerPoint slides, your group is to present your results of value for your company.
  Summarize your results in a 5 or 6 slide PowerPoint presentation.
• PowerPoint Slides for FCF and WACC
• Work on Microsoft's Value in class.
  • Here is the Report Financial Statments from Microsoft.
  • Here is a PowerPoint with the calculations we did in class.
    (I did not copy the calculations my calculations may be different.)
• The book that I discussed in class is by Benjamin Graham, The Intelligent Investor,
  New York, NY: Harper-Collins Publishers, Revised Edition, 2006. This is the book Warren Buffett claims
  to be "by far the best book on investing ever written."

[Andrew's SILC Home Page, Shanghai, China] - [Drew's Home Page, United States]

email: andrew at andrewparkes.com
Last Update: September 4, 2007
By Andrew L. H. Parkes, Ph. D.