FNCE 2P91 Lecture Notes - Cash Flow, Fisher Hypothesis
28 Apr 2013
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Fnce 2p91: corporate finance-notes-chapter 7: interest rates and bond. Questions were attached with email on class cancelation: mrs kesel. Try solving with a different point of reverence: another previous exam question. Think of the pv of annuity of payment at 10% interest for 10 years, payment one year from now. Same as above but annuity does not start until year 4. To find pv take pv of annuity until t=3 then discount back to time 0. Discounts cash flow back three periods to t=0: previous midterm question from last year. 20 years x 52 weeks = 1040 payments. 20 years 7 years = 13 years left x 52 weeks = 676 payments left. Slides for chapter 7 have been posted on sakai. Yield or yield to maturity: corporation issues bond to investor, each year the corporation will pay interest payments or coupon payments . Corporation wants to raise money it can issue bonds.
