FINANCE 100 Section 001002
A. Craig MacKinlay Fall 2014
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Important Dates for Fall 2014:
Midterm Exam I: Thursday, October 2, 2014  in class
Midterm Exam II: Thursday, November 6, 2014  in class
Final Exam: Friday, December 12, 2014  6:00 pm to 8:00 pm
Sample Exams (password required)
Readings:
Interest Rate Exercises (not to be handed in)
Practice Capital Budgeting Problem
Statistics Review (For riskreturn analysis)
Example of Direct Costs of Financial Distress
Discussion of Indirect Costs of Financial Distress
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 30, 2014
This cover page must be used when handing in your
assignment.
Assignment 1: solution
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 4, 2014
This cover page must be used when handing in your
assignment.
Data file: f100data2012.xls
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Suggested Problems:
Below are suggested problems from the course text. However, one need
not limit themselves to these problems  most of the endofchapter
problems in the "Questions and Problems" section are appropriate.
Problems for 10th edition of text
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 semiannual payments give the YTM as an
annual rate compounded semiannually (r_{a,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 content of class lectures is the most
important material. Background reading is in
chapters 13, 14, 16, 17, 18, and 19.
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Teaching Assistants Office Hours (begin Tuesday September 8)

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