ECON 2310 Lecture Notes - Lecture 12: Risk Premium, Cash Flow, Yield Curve
18 Apr 2019
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Document Summary
The following is a list of some of the major concepts that have been covered during the course that you should make sure you understand in your preparation for the final exam. 1 goals and governance of the firm. The goal of managers is to maximize firm value. Balance sheet, income statement, statement of cash flows. Single cash flow: future value, present value, how to find discount rate. Annuity: present value, how to find cash flow, annuity due, growing annuity, multiple payments per year, amortization. Perpetuity: present value, how to find cash flow, how to find discount rate, growing perpetuity. Relationships between - coupon rate, ytm, current yield, rates of return, and prices. Relationships between risk and maturity, risk and coupon rate. You will not be asked to calculate yield to maturity. Dividend discount model: no growth, constant growth, non-constant growth, sustainable growth rate. Relationship between price and growth rate, roe, plowback ratio, discount rate.
