FINE 342- Midterm Exam Guide - Comprehensive Notes for the exam ( 51 pages long!)
11 Oct 2017
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Document Summary
Lecture overview: the main players in the financial system, the different forms of business organisations, how to apply the dividend discount model to value stocks, how to apply the discounted free cash flow model (dcf) to value stocks. What can you do if your monthly income is more than your necessary monthly consumption: you can always consume more by buying not so necessary goods, you can save your excess income. Why would you want to save your excess income: for necessary future consumption when your monthly income is not as high, for future consumption that requires large lump sum amount. How can you save your monthly excess income: either in cash or invest. Why would you want to save by investing: to make a return on your capital. How can you invest: by investing in financial assets such as bonds or stocks or investing in real assets.
