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FINANCE 100  Section 001-002

A. Craig MacKinlay                                                                                   Fall 2016

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Office Hours for Tuesday (Dec. 13) to Monday (Dec. 19):

(all TA hours will be at Desk C in the TA room)

Day                                Time                              TA              
Dec. 14 Wednesday      3 pm – 4:30 pm         Aastha Jain
Dec. 15 Thursday          9 am – 10:30 am       Matt Lessor
Dec. 15 Thursday          2 pm – 3:30 pm         Emily He  
Dec. 16 Friday               2 pm – 3:30 pm         Jaclyn Chu
Dec. 19 Monday            10 am – 11:30 am     Jason Zhang  
   
MacKinlay       3:45 pm – 5 pm      Tuesday Dec. 13       SHDH 3255

MacKinlay       4 pm – 5 pm           Friday Dec. 16   SHDH 3255

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Review Session:

Friday December 16 at 9am -- Room SHDH 351

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Final Exam Details:

Date: Monday December 19 at 6:00 pm

 

Permitted at exam:  -calculator

      -notes on one-half page (8.5 inch x 5.5 inch) one side only

 

Final Exam Rooms (6 pm - 8 pm):

Section 001 (10:30 am class)

JMHH G06 -- all students

 

Section 002 (12:00 pm class)

JMHH G06 -- Last Name: A-C

JMHH F85 -- Last Name: D-L

JMHH F95 -- Last Name: M-Z

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Syllabus

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Important Dates for Fall 2016:

Midterm Exam I:    Thursday, September 29 - in class

Midterm Exam II:    Thursday, November 3 - in class

Final Exam:   Monday, December 19, 2016 - 6:00 pm to 8:00 pm

 

Sample Exams (password required)

 

Readings:

Term Structure Appendix

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 Common Stock Valuation

  Solution

McKinsey Article on IRR (optional reading)

 

Practice Capital Budgeting Problem

 Solution

 

Statistics Review (For risk-return analysis)

         

EAC Practice Problem (Solution for in class extension)

         

Capital Budgeting Handout (Dec. 1 and 6)

 

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Assignments:

Assignment 1 - Each student must hand in her/his own solution. 

    However, you are allowed to work with a classmate

     solving this case. 

    Due date: Thursday, October 27, 2016

     This cover page must be used when handing in your

      assignment.

     (Solution is available in sample exams folder.)

 

Assignment 2 - Each student must hand in her/his own solution. 

    However, you are allowed to work with a classmate

     solving this assignment. 

    Due date: Thursday, December 1, 2016

    This cover page must be used when handing in your

      assignment.

    Data file:    f100-data-2016.xlsx

 

Suggested Problems: 

Below are suggested problems from the course text (RWJJ 11th edition). 

However, one need not limit themselves to these problems -- most

of the end-of-chapter problems in the "Questions and Problems" section are appropriate.

Chapter 4 - Discounted Cash Flow Valuation - 3, 4, 6, 12, 13, 15,

                            26, 27, 28, 30, 34, 41, 52, 56, 57, and 67.

Chapter 8 - Interest Rates and Bond Valuations - 3, 4, 14, 15, 16,

                            17, and 19.  Note that the textbook bond problems

                            with semi-annual payments give the YTM as an

                            annual rate compounded semi-annually (ra,2).                

Chapter 9 - Stock Valuation - 1, 9, 13, 14, 15, 22, and 24.

 End of material for Midterm I

Chapter 5 - Net Present Value and Other Investment Rules -

                            1, 5, 6, 8, 11, 13, 14, 17, 23, and 28.

 

Chapter 6 - Making Capital Investment Decisions - 1, 3, 4, 5,

                             12, 15, 19, 25, and 38a.

 

Chapter 10 - Risk and Return - 1, 2, 4, 7, 12, 17, and 20.

 

Chapter 11 - Return and Risk - 2, 3, 5, 6, 9, 10, 12, 16, 24, 26,

                              30, 31, and 34.

 End of material for Midterm II

  Chapter 13 - Risk, Cost of Capital, and Capital Budgeting -

                                1, 3, 5, 10, and 12.

 

Chapter 14 - Efficient Capital Markets and Behavioral Challenges

                            - concept questions - 2, 3, 5, 6, 9, and 11

                            - questions and problems - 2, 3, and 4.

Chapter 16 - Capital Structure: Basic Concepts  - 1, 2, 16,

                            18, and 22.

 

Chapter 17 - Capital Structure: Limits to the Use of Debt

                            - 1, 6, and 8.

 

Chapter 18 - Valuation and Capital Budgeting for the Levered Firm

                                             - 2, 3, 4, 8, and 10.

 

Chapter 19 - Dividends and Other Payouts - 11, 13, 15, and 18.

 

 

Final Exam Material:  The questions on the final exam will

draw on the content of class lectures. Background reading is in

chapters 13, 14, 16, 17, 18, and 19.

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Teaching Assistants Office Hours (begin Tuesday September 6)

 

 

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