Principles of Corporate Finance
Valuing Common Stocks Example Our company forecasts to pay a $5.00 dividend next year, which represents 100% of its earnings. Th ...
Valuing Common Stocks Example - continued If the company did not plowback some earnings, the stock price would remain at $41.67. ...
Valuing Common Stocks Present Value of Growth Opportunities (PVGO) Net present value of a firm’s future investments. Sustainab ...
FCF and PV w Free Cash Flows (FCF) should be the theoretical basis for all PV calculations. w FCF is a more accurate measurement ...
FCF and PV Valuing a Business The value of a business is usually computed as the discounted value of FCF out to a valuation hori ...
FCF and PV Valuing a Business HH rHH PV r FCF r FCF r PV FCF ( 1 ) ( 1 ) ... ( 1 ) ( 1 )^2 11 2 + + + + + + + + = PV (free cash ...
FCF and PV Example Given the cash flows for Concatenator Manufacturing Division, calculate the PV of near term cash flows, PV (h ...
FCF and PV Example - continued Given the cash flows for Concatenator Manufacturing Division, calculate the PV of near term cash ...
FCF and PV Example - continued Given the cash flows for Concatenator Manufacturing Division, calculate the PV of near term cash ...
u Why Net Present Value Leads to Better Investment Decisions than Other Criteria Principles of Corporate Finance Brealey and Mye ...
Topics Covered w NPV and its Competitors w The Payback Period w The Book Rate of Return w Internal Rate of Return w Capital Rati ...
NPV and Cash Transfers w Every possible method for evaluating projects impacts the flow of cash about the company as follows. Ca ...
Payback w The payback period of a project is the number of years it takes before the cumulative forecasted cash flow equals the ...
Payback Example Examine the three projects and note the mistake we would make if we insisted on only taking projects with a payb ...
Payback Example Examine the three projects and note the mistake we would make if we insisted on only taking projects with a payb ...
Book Rate of Return Book Rate of Return - Average income divided by average book value over project life. Also called accounting ...
Internal Rate of Return Example You can purchase a turbo powered machine tool gadget for $4,000. The investment will generate $2 ...
Internal Rate of Return Example You can purchase a turbo powered machine tool gadget for $4,000. The investment will generate $2 ...
Internal Rate of Return Example You can purchase a turbo powered machine tool gadget for $4,000. The investment will generate $2 ...
Internal Rate of Return -2000 -1500 -1000 -500 0 500 1000 1500 2000 2500 (^102030405060708090100) Discount rate (%) NPV (,000s) ...
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