FN1024 Summary of Chapter 7 - Capital budgeting and valuation

PRINCIPLES OF BANKING
AND FINANCE
- Chapter 7: Capital budgeting and valuation -

Note: We suggest first studying this chapter from the Subject
Guide. Notes for ch7 are based on the guide + extra exam material.




Good luck studying!


short manual:
- includes a graph
- includes a schema/diagram
- includes an introduction
- includes additional information that
is not in the main textbook updated: 17/04/2018

, CONTENTS
CHAPTER 7: CAPITAL BUDGETING AND VALUATION
- notes based on the Subject guide and extra exam material -
7.1. How to value real assets and financial assets
7.2. Present value (discounted) value
7.3. Valuation of real assets
7.3.1. Net present value (NPV)
7.3.2. Internal rate of return (IRR)
7.3.3. Payback period (n)
7.4. Valuation of financial assets
7.4.1. Bonds
7.4.2. Common stocks
7.5. Problems of valuation of bonds and stocks
7.6. Relationship of price, coupon rate and yield to maturity (YTM)