Please enable JavaScript.
Coggle requires JavaScript to display documents.
ACF - Coggle Diagram
ACF
Week 4: Financing and Valuation
After-tax weighted-average cost of capital (WACC)
required rate of return from investors
unlevering and relevering betas
cost of debt
assume market value = book value of debt security (simplier method)
cost of retained earnings
CAPM - capital asset pricing model
DCF - discounted cash flow
cost of new common stock
cost of equity/(1-flotation cost Fe)
or re = [D1 / (P0(1-Fe))] + g
W2: Capital budgeting
capital budgeting process
cash flow of capital investment project
cash flow from capital investment
operating cash flow
cash flow from changes in working capital
NPV rule
investment timing decision
equivalent annual cash flow EAC
project analysis
sensitivity analysis
scenario analysis
break-even analysis
operating leverage
monte carlo simulation
W1: Investment Decision Rules
corporate decisions
investment/financing decision
real/financial assets
time value of money
PV/FV
annuity (due)
perpetuity
effective annual interest rate
investment decision rules
NPV
IRR
pay back
W3: Real options
Understanding options
call/put option
profit diagram
financial alchemy with options
Valuing options
binomial method
Black-Scholes option pricing model
simple option-valuation model
replicating portfolio method
hedge ratio/option delta
risk-neutral method
Real Options
Option to Expand
Mark II microcomputer assumptions
Timing Option
Malted Herring option
Abandon option (=put option)
Black-Scholess
put-call parity
The option to vary the mix of outpout/
Flexible production and procurement
W5: Value of firm
Dividend discount model