Future Value, Present Value , Perpetuity & Annuity – Ba able to compute Future Value & Present Value – Be able to compute return on investment – Understand perpetuity & annuity
Bond Valuation – Know the important bond features & bond types – Understand bond value & why they fluctuate – Understand bond rating & why they mean – Understand the term structure of interest rate & the determinants of bond yields.
Stock Valuation – How common stock are valued – Estimating the cost of Equity Capital – The link between stock price & EPS – Valuing a business by discounted Cash Flow
Cost of Capital – Know how to determine a firm’s overall cost of capital – Understand pitfalls of overall cost of capital & how to manage them – Weighted Average Cost of Capital ( WACC )
Risk & Return – Measuring Portfolio Risk – How diversification reduces risk – Market risk is measured by beta – CAPM