FIN301 Class Web Page, Fall ' 21
Instructor: Maggie Foley
Jacksonville University
Business
Finance Online, an interactive learning tool for the Corporate Finance
Student http://www.zenwealth.com/BusinessFinanceOnline/index.htm
Weekly SCHEDULE, LINKS, FILES and Questions
Chapter 
Coverage, HW, Supplements 
Required 
References 

Chapter
1, 2 
Discussion: How to pick stocks (finviz.com) How To Win The
MarketWatch Stock Market Game
Daily earning announcement: http://www.zacks.com/earnings/earningscalendar IPO schedule: http://www.marketwatch.com/tools/ipocalendar Chapter 1: Introduction Flow
of funds describes the financial assets flowing from various sectors through financial
intermediaries for the purpose of buying physical or financial assets. *** Household, nonfinancial business, and our government Financial
institutions facilitate exchanges of funds and financial products. ***
Building blocks of a financial system. Passing and transforming funds and
risks during transactions. ***
Buy and sell, receive and deliver, and create and underwrite financial
products. ***
The transferring of funds and risk is thus created. Capital utilization for
individual and for the whole economy is thus enhanced. The
factors that could cause the next financial crisis are (based on class
discussion) · Pandemic · Global warming · War · Inflation · QE · student loan · government debt · tax reform Chapter 2 Introduction of Financial Market 1.
What
are the six parts of the financial markets
Money: · To pay for purchases and store wealth (fiat money, fiat currency) Financial Instruments: · To transfer resources from savers to investors and to transfer risk to those best equipped to bear it. Financial
Markets: · Buy and sell financial instruments · Channel funds from savers to investors, thereby promoting economic efficiency · Affect personal wealth and behavior of business firms. Example? Financial Institutions. · Provide access to financial markets, collect information & provide services · Financial Intermediary: Helps get funds from savers to investors Central Banks · Monitor financial Institutions and stabilize the economy Regulatory Agencies · To provide oversight for financial system. 2.
What
are the five core principals of finance
Introduction
to Capital Markets  ION Open Courseware (Video) How the stock market works (video) No homework
for chapters 1, 2 
8/17 Class video:
syllabus and market watch game 8/19 class video:
chapters 1, and 2, discussion on factors for next financial crisis 8/24 Class video: TVM
Math and Excel, chapter 5 In class
exercise1 8/26 class video: chapter 5 In class exercise2 8/31 Class video: chapter 5 In class exercise3 9/2 class video:
chapter 5 homework review 9/7 Class video: chapter
5 homework; Chapter 3 – balance sheet, income statement 9/9 class video: chapter 3 – cash flow statement part 1 9/14 Class video:
chapter 3 – cash flow statement part
2, chapter 4 ratio analysis 9/16 class video: Chapter 3 – In class exercise 9/21 Class video · Chapter 3
homework · First midterm
exam Review – chapter 5 · Study guide posted 9/23 class video: · first midterm exam review – chapter 3 · ratio analysis (not covered in the exam) 9/28 Class video First midterm exam (in class) 9/30 class video · Chapter 6 Boeing, Apple, Dell Stock prices · Normal distribution · Mean, Standard Deviation 10/5 Class video · Correlation matrix · beta 10/7 class video Slope function to get beta · CAPM 10/12 Class video · Chapter 6 Homework 10/14 class video · Chapter 7 10/19 Class video: chapter 7 homework 10/21 class video: Review for exam 10/26 Class video Second midterm exam – in class
(chapters 6 and 7 only) 10/28 class video
Chapter 8 stock valuation, HW questions 12 11/2 Class video:
Chapter 8 HW questions, chapter 9 WACC 11/4 Class video: WACC,
and chapter 10 capital budgeting 11/9 Class video · chapter 10 capital budgeting · homework 11/11 Class video:
Third midterm exam review (chapters 8, 9, 10) 11/16 Class video Third midterm exam – in class
(chapters 8, 9, 10) 11/18 Class video Review for final 11/19, 122:30 PM, Final Exam – in class  Comprehensive Exam Comprehensive Final Exam Study
Guide Multiple
Choice Questions: 2.1 points each, total 100 points.) 1.
Given net income, depreciation, changes in AR, AP, and
inventory, calculate the company's change in cash from operation. 25 Concept about income statement, balance sheet 6.
Calculate ROE. ROE = NI/TE. So look for NI, and TE. Hint: TE = TA – TD 7.
Given EBIT,
interest, tax rate, EBIT, calculate NI 8.
Given CA, CL in two
continuous years, calculate changes in NWC 9.
Examples of use of cash 1011
. Given PV, r, nper, calculate
for FV 12. Given
PV, r, nper, calculate FV (hint: no pmt) 13. Given
FV, r, nper, calculate PV (hint: no pmt) 14. Given
PV, r, nper, calculate FV (hint: no pmt) 15. Given
FV, r, nper, pmt, calculate PV 16. Given
PV, FV, nper, no pmt, calculate for rate 17. Given
PV, rate (hint: if monthly, dividend by 12), pmt, calculate for nper (hint: FV=0) 1819:
What is systematic risk? Unsystematic risk? 20. How
to diversify to achieve the goal for diversification? 21.
Given beta, r of stock A, beta and r of stock B, calculate market return 22.
Given beta, r of stock A, beta and r of stock B, calculate risk free rate 23.
Given beta, r of stock A, beta and r of stock B, and given stock C’s beta,
calculate its return 2425.
Definition of beta 2627.
Bond conceptual questions 28. Bond:
given nper, bond price, yield to maturity, calculate for coupon rate (hint: use
pmt function) 2930. Given
nper, bond price, coupon rate, calculate for yield to maturity, for semiannual
coupon bond and annual coupon bond . 31: given
D1, g, r, calculate for Po 32: given
Do, g, r, calculate for Po 33. Given
dividend yield, Po, calculate for D1. 34. Given
r, D0, g, calculate for dividend yield 35. Given
D0, g, calculate for D5 36. Given
Do, g, and r calculate for Po 3739. Calculate
for payback period, NPV, IRR, given CFo – CF4 and r. 4045. Similar
to third mid term exam, Amazon question, calculate weight of debt, weight of equity,
cost of equity, after tax cost of debt, WACC. 46. Zero
coupon bond: given nper, price, calculate for yield to maturity. 47. Calculate
return given probability of each state of economy, and return under each state
of economy Third
MidTerm Exam, Review
video, Review
video Examples Study Guide Multiple Choice Questions (30*3.3) For questions
111, please refer to information given in the following table. 111. Given two
projects’ cash flows, calculate NPV, IRR, payback period, crossover rate. 12: Given cash flows, calculate payback period. 1316.
True/false: payback period questions, IRR, and NPV, mutually exclusive vs.
independent projects 17. NPV
question, might be a hard question. Hint: choose projects based on ranking of
NPV, not ranking on IRR. 18. Calculate
stock price, given dividend growth rate, D0, and r. 19. Calculate
D2, given stock price, D0, and r (hint: calculate g first) 20. Given r,
D0, g, calculate dividend yield (hint: dividend yield = rg) 21. Given Po,
D0, g, calculate r 22. Given r,
D1, g, calculate Po. 23. Given Po,
D1, g, calculate r. 24. Given r,
D1, g, calculate D4 2530. Given
total capital requirements, capital raised in the bond market, coupon rate,
bond price, years to maturity, flotation rate, tax rate, dividend, dividend
growth rate, stock price, flotation rate. Calculate cost of debt, weight of
debt, cost of equity, weight of equity, WACC.


Chapter 5 Time value of Money The time value of money  German Nande (video)
Tutoring of Time Value of
Money calculation in Excel （video） Chapter 5 Homework (due with first
mid term) 1.
You
deposit $5,000 in a saving account at 10% compounded annually. How much is
your first year interest? How much is your second year interest? (500, 550) 2.
What
is the future value of $5,000 invested for 3 years at 10% compounded
annually? ( 6,655) 3.
You
just bought a TV for $518.4 on credit card. You plan to pay back of $50 a
month for this credit card debt. The credit card charges you 12% of interest
rate on the monthly basis. So how long does it take to pay back your credit
card debt? (11 months) 4.
You
are going to deposit certain amount in the next four years. Your saving
account offers 5% of annual interest rate. First year: $800 Second year: $900 Third year: $1000 Fourth year: $1200. How much you can withdraw four years later? (4168.35) 5.
You
are going to deposit certain amount in the next four years. Your saving
account offers 5% of annual interest rate. First year: $800 Second year: $900 Third year: $1000 Fourth year: $1200. How much is the lump sum value as of today (NPV)? (3429.31) 6.
Ten
years ago, you invested $1,000. Today it is worth $2,000. What rate of
interest did you earn? (7.18%) 7.
At
5 percent interest, how long would it take to triple your
money? (22.52) 8.
What
is the effective annual rate if a bank charges you 12 percent compounded
monthly? (12.68%) 9.
Your
father invested a lump sum 16 years ago at 8% interest for your education.
Today, that account worth $50,000.00. How much did your father deposit 16
years ago? ($14594.50) 10.
You
are borrowing $300,000 to buy a house. The terms of the mortgage call for
monthly payments for 30 years at 3% interest. What is the amount of each
payment? ($1264.81) 11.
You
deposit $200 at the beginning of each month into your saving account
every month. After two years (24 deposits total), your account value is
$6,000. Assuming monthly compounding, what is your monthly rate that the bank
provides? (1.74%) 12.
You want to buy a fancy car. For this goal,
you plan to save $5,500 per year, beginning immediately. You will make 4 deposits in an account that
pays 8% interest. Under these
assumptions, how much will you have 4 years from today? ($26,766) 13. Your girlfriend just won the Florida
lottery. She has the choice of
$40,000,000 today or a 20year annuity of $2,850,000, with the first payment
coming one year from today. If the mutual fund of hers provides 4% of return
each year for the next 20 years, which payment option is more attractive to
her? ($40million) 14. The Thailand Co. is considering the
purchase of some new equipment. The quote consists of a quarterly payment of
$4,740 for 10 years at 6.5 percent interest. What is the purchase price of
the equipment? ($138,617.88) 15. Today, you are purchasing a 15year, 8 percent
annuity at a cost of $70,000. The annuity will pay annual payments. What is
the amount of each payment? ($8,178.07) 16. Shannon wants to have $10,000 in an
investment account three years from now. The account will pay 0.4 percent interest
per month. If Shannon saves money every month, starting one month from now,
how much will she have to save each month? ($258.81) 17. Trevor's Tires is offering a set of 4
premium tires on sale for $450. The credit terms are 24 months at $20 per
month. What is the interest rate on this offer? (6.27 percent) 18. Top Quality Investments will pay you
$2,000 a year for 25 years in exchange for $19,000 today. What interest rate
are you earning on this annuity? (9.42 percent) 19. You have just won the lottery! You can
receive $10,000 a year for 8 years or $57,000 as a lump sum payment today.
What is the interest rate on the annuity? (8.22 percent) 20. Around Town Movers recently purchased a
new truck costing $97,000. The firm financed this purchase at 8.25 percent
interest with monthly payments of $2,379.45. How many years will it take the
firm to pay off this debt? (4.0 years) 21. You just received a credit offer in an
email. The company is offering you $6,000 at 12.8 percent interest. The
monthly payment is only $110. If you accept this offer, how long will it take
you to pay off the loan? (82.17 months) 22. What is the future value of weekly
payments of $25 for six years at 10 percent? ($10,673.90) 23. At the end of this month, Bryan will
start saving $80 a month for retirement through his company's retirement
plan. His employer will contribute an additional $.25 for every $1.00 that
Bryan saves. If he is employed by this firm for 25 more years and earns an
average of 11 percent on his retirement savings, how much will Bryan have in his
retirement account 25 years from now? ($157,613.33) 
Summary of math and excel equations Math
Equations FV
= PV *(1+r)^n PV
= FV / ((1+r)^n) N
= ln(FV/PV) / ln(1+r) Rate
= (FV/PV)^{1/n} 1 Annuity:
N = ln(FV/C*r+1)/(ln(1+r)) Or
N = ln(1/(1(PV/C)*r)))/ (ln(1+r)) EAR
= (1+APR/m)^m1 APR
= (1+EAR)^(1/m)*m Excel
Formulas To get FV, use FV function. =abs(fv(rate, nper,
pmt, pv)) To get PV, use PV
function = abs(pv(rate, nper,
pmt, fv)) To get r, use rate
function =
rate(nper, pmt, pv, fv) To get number of years,
use nper function = nper(rate, pmt, pv,
fv) To
get annuity payment, use PMT function = pmt(rate, nper, pv,
fv) To
get Effective rate (EAR), use Effect function =
effect(nominal_rate, npery) To
get annual percentage rate (APR), use nominal function =
nominal(effective rate, npery) NPV NFV calculator(FYI, might be
helpful) Time Value of Money
Calculator 

Chapter 3 Financial Statement Analysis Experts Explain: Financial Statements (well
explained, video) *************
Introduction *************** Let’s
compare Nike with GoPro based on 10K (www.nasdaq.com) https://www.nasdaq.com/marketactivity/stocks/nke/financials Income Statement  Nike
Balance sheet  Nike
Cash flow statement  Nike
For discussion: Which company is
better? Let’s
find it out by comparing stock performance between the two firms. Nike Stock Performance (google.com) What
is your conclusion? Financial Ratios of Nike
(finviz.com) ******* Part I: Balance Sheet and
Income Statement ************** Home Depot (Ticker in the
market: HD) reported the following information for the year ended January 30^{th},
2011 (expressed in millions). Sales: $67,977 Cost of goods sold: $44,693 Marketing, general and
administrative expenses: $15,885 Depreciation expenses:
$1,616 Interest expense: $530 Tax rate: 36.70% Number of shares
outstanding: 1,623 Dividends paid to stockholders:
$1,569. Use the above information
to try to prepare the income statement of Home Depot
for the year ended January 30^{th}, 2011 Home Depot (Ticker in the
market: HD) reported the following information for the year ended January 30^{th},
2011 (expressed in millions). Cash: $545 Accounts receivables:
$1,085 Inventories: $10625 Other current assets:
$1,224 Gross fixed assets: $38,471 Accumulated depreciation:
$13,411 Other fixed assets: $1,586 Accounts payable: $9,080 Short term notes payable:
$1,042 Long term debt: $11,114 Total common stock: $3,894 Retained earnings: $14,995 Use
the above information to try to prepare the balance
sheet of Home Depot for the year ended January 30^{th}, 2011 
Income statement –
GoPro
Balance
sheet  GoPro
Cash
flow statement – GoPro
GoPro
Stock performance (google.com) Financial
Ratios of GoPro (finviz.com) http://www.jufinance.com/10k/bs http://www.jufinance.com/10k/is http://www.jufinance.com/10k/cf Ratio
Analysis (plus balance
sheet, income statement) http://www.jufinance.com/ratio 

********* Part II: Cash Flow Statement ******************

In Millions of USD (except for per share items) 
52 weeks ending 20140202 
Net Income/Starting Line 
5,385.00 
Depreciation/Depletion 
1,757.00 
Amortization 
 
Deferred Taxes 
31 
NonCash Items 
228 
Changes in Working Capital 
289 
Cash from Operating Activities 
7,628.00 
Capital Expenditures 
1,389.00 
Other Investing Cash Flow Items, Total 
118 
Cash from Investing Activities 
1,507.00 
Financing Cash Flow Items 
37 
Total Cash Dividends Paid 
2,243.00 
Issuance (Retirement) of Stock, Net 
8,305.00 
Issuance (Retirement) of Debt, Net 
3,933.00 
Cash from Financing Activities 
6,652.00 
Foreign Exchange Effects 
34 
Net Change in Cash 
565 
Cash Interest Paid, Supplemental 
639 
Cash Taxes Paid, Supplemental 
2,839.00 
Discussion:
2. What does net change in cash mean?
Now
let’s learn how to calculate cash changes in each session
Source
of cash
Use
of Cash
Cash
Flow from Operations: Five Steps
1. Add back depreciation.
2. Subtract (add) any increase (decrease) in accounts
receivable.
3. Subtract (add) any increase (decrease) in inventory.
4. Subtract (add) any increase (decrease) in other current
assets.
5. Add (subtract) any increase (decrease) in accounts payable
and other accrued expenses
Chapter 3
HW (due with the first midterm)
1.
Firm AAA just showed how it
operated in the prior year.
Sales = $2,000; Cost of Goods Sold =
$1,000; Depreciation Expense = $200; Administrative Expenses = $180; Interest
Expense = $30; Marketing Expenses = $50; and Taxes = $200. Prepare income statement
2. A firm has $2000 in current assets, $3000 in fixed assets, $300 in accounts receivables, $300 accounts payable, and $800 in cash. What is the amount of the inventory? (hint: 900)
3.
A
firm has net working capital of $1000. Longterm debt is $5000, total assets
are $8000, and fixed assets are $5000. What is the amount of the total
equity? (Hint: to find total equity, you need to calculate total debt, which
is a sum of long term debt and short term debt. Short term can be found from
new working capital.) (hint: 1000)
4. Andre's Bakery has sales of $100,000 with costs of $50,000. Interest expense is $20,000 and depreciation is $10,000. The tax rate is 35 percent. What is the amount of tax paid? (hint: 7000)(hint: tax = taxable income * tax rate and taxable income = EBT)
5.
Andre's Bakery has sales of $100,000 with
costs of $50,000. Interest expense is $20,000 and depreciation is $10,000.
The tax rate is 35 percent. The company also paid $3,000 for dividend. What
is the retained earning? (hint: retained earning = net income 
dividend)(hint: 10,000)
Cash
Flow Statement Answer 
calculation for changes 

Cash
at the beginning of the year 
2060 

Cash from operation 

net
income 
3843 

plus
depreciation 
1760 

/+ AR

807 
807 

/+ Inventory 
3132 
3132 

+/ AP 
1134 
1134 

net change in cash from operation 
2798 

Cash from investment 

/+ (NFA+depreciation) 
1680 
1680 

net change in cash from investment 
1680 

Cash from finaning 

+/ long term debt 
1700 