Business Finance

Author:
Robert Parrino, David S. Kidwell, Hue Hwa Au Yong, Michael Dempsey, Nigel Morkel-Kingsbury, Samson Ekanayake, Jennifer James, James Murray

Publisher:
Wiley

Edition:
1st Edition

ISBN:
9780730363170

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Complete Chapter - 2 Video(s)

Business Finance 03: Risk and Return


This video discusses holding a period return and quantitative measures of return while taking into account the capital appreciation component of a return and the income component of a return. It uses an example to explain the occurrence of probability and analyze expected value and returns. The video further explains the concept of standard deviation and variance, effect of historical market performance and risk and diversification. Another example of expected return of portfolio involving investment in shares of various companies is also discussed. Other concepts elaborated include covariance between two assets and portfolios with more than one asset.

Business Finance 05: Workshop

Workshop - 1 Video(s)

Business Finance 05: Workshop


The video explores the elegant claim made by CAPM that the return on investment will rise with a rise in risk. Systematic risk, risk free rate of return and estimate return from an asset through a linear relationship are also discussed. It uses this information to represent the security market line graphically. In the section CAPM for portfolio, various proportions of investments with expected return from a portfolio is given are assessed. The video highlights how risk-free rate and market risk premium can indicate if CAPM would be useful. Different modes of raising funds through debt and equity and the two types of markets for shares are also analyzed.

Complete Chapter - 1 Video(s)

Business Finance 04: Debt and Bonds


This video provides an overview of the advantages and risks of debt. It explains the concept of realized yield and shows the interest rate at which the actual cashflows are generated. This video discusses the importance of bond calculation because it allows investors to see return that they earned on investment. It explains the concept of term loans and assesses the fixed obligations over a fixed term. Loan amortization is also explained using textbook examples. In the annuities and perpetuities section of level cash flows, it teaches how to prepare a loan amortization schedule.

Workshop - 1 Video(s)

Business Finance 05: Share Valuation (Workshop part B)


This video examines the ordinary share valuation model. The general valuation formula is explained in detail in this section with three assumptions covering the growth patterns being explored. These include dividend payments remaining constant over time, dividends having constant growth rate and dividends having mixed growth rate pattern. This video teaches how to use the zero-growth model for preference share valuation. The impact of share prices on near and future distant dividends is assessed via the share valuation. The constant growth dividend model is analyzed as well with various examples computing the expected price. Furthermore, this video explores the supernormal growth dividend model and mixed supernormal growth dividend model.

Complete Chapter - 1 Video(s)

Business Finance 12: Tuesday workshop


This video reviews several important exam questions. They include outlining strategies needed to evaluate the impact of uncertainty on discounted cashflow evaluation of capital budgeting decisions. Other than this, considerations that companies take into account when choosing to pay out their profits and influence of debt on the financial objectives of the firm are assessed. Bond valuation, financial value and financial goals of a company are also reviewed.

Workshop - 1 Video(s)

Business Finance 12: Tuesday workshop

Complete Chapter - 2 Video(s)

Business Finance 06: Capital Budgetting


This video goes through a scenario where it evaluates two different systems compared by two different companies. It uses capital budgeting to decide which is a better system to invest in. It also discusses how the NPV changes when the discount rate is changed. In this scenario, using the future value, present value, discount factor and net present value, the payback period is calculated to find out the best investment option. In another scenario, the NPV operation of a goldmine shows multiple IRR solutions. It reinstates in this example that IRRs can be negative.

Business Finance 07: Workshop (Tuesday)

Workshop - 1 Video(s)

Business Finance 07: Workshop (Tuesday)


This section of financial analysis reflects on the incremental after-tax free cashflows. The video teaches the steps required to calculate them. First, the incremental cashflows from operations are calculated. From this, the incremental capital expenditures and incremental additions to working capital are deducted. Aspects accounted for in this calculation are impact of depreciation, amortization and investments on FCF. In the section involving FCF calculation, the stand-alone principle is also discussed. Furthermore, five general rules for calculating incremental cashflows are explained. These include only cashflows in calculations, impact of project on cashflows, all opportunity costs, forgetting sunk costs and after-tax cashflows.

Workshop - 1 Video(s)

Business Finance 08: Workshop (Wednesday)


In the Weighted average cost of capital of this video, the concepts of unique risk and systematic risk are discussed. It teaches how the expected rate of return from the investor’s side is the cost of capital from the company’s side. Moreover, it highlights how to eliminate unique risk by diversifying the portfolio. The CAPM model can be used to arrive at the expected rate of return and gives a good understanding of the discount rate. It also explains the concerns associated with this model. The video further explains that the balance sheet values are based on market values rather than book values because book values are based on historical costs.

Complete Chapter - 2 Video(s)

Business Finance 09: Capital Raising


This video reflects upon different ways that businesses raise capital. These include entrepreneurs and venture capitalists. Concepts discussed in this video include bootstrap financing, seed stage financing, early-stage financing and later-stage financing. This section also highlights why venture capital funding can be different. Moreover, the venture capital funding cycle is graphically illustrated and explained in detail. Additionally, strategies such as in-depth knowledge, syndication and personal investments to reduce risk are assessed . According to this video, the venture capital companies exit venture backed companies through strategic buyer, financial buyer and initial public offering.

Business Finance 10: Wednesday Workshop

Workshop - 1 Video(s)

Business Finance 10: Wednesday Workshop


The key assumptions discussed in this video are that a project has average risk, the firm’s debt-equity ratio is constant and corporate taxes are the only imperfection. Weighted average cost of capital is analyzed along with tabular representation of expected free cashflows and current market value balance sheet in the question explained in this video. Moreover, valuing an acquisition using the weighted average cost of capital is explained as are the benefits of using debt. The trade-off theory of capital structure, insolvency costs, agency costs, shareholder-lender agency costs, trade-off theory and pecking-order theory are discussed.

Workshop - 1 Video(s)

Business Finance 11: Tuesday Workshop


This video explains dividend structure, policy and distribution. It elaborates on the types of dividends ranging from cash to special form. It also addresses how dividends are affected by the types of tax systems including classical and imputation tax systems. The dividend payment process involving brand vote, public announcement, its price and ex-dividend date is further explained. The dividend payment process includes the record date and payable date. Furthermore, light is shed upon the procedure and types of share buy-backs. Lastly, benefits and costs of dividends are explained while exploring the cashflow identity equation.