[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-395497-105":59,"doc-detail-395497-en":131},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":124,"head_meta":126,"extra_data":128,"updated_unix":130},105,"en","fin-300-tip-sheet-ch6-11-compiled-peer","FIN 300 TIP SHEET Ch.6-11 - Compiled Peer","","FIN 300 tip sheet compiling key corporate finance concepts from Fundamentals of Corporate Finance (2nd edition). It summarizes bond pricing relationships including coupon rate, yield to maturity, price premium/discount/par, and interest-rate sensitivity, plus credit spread basics. It also covers stock valuation using dividend discount and cash-flow approaches, enterprise value and free cash flow definitions. Finally, it reviews capital budgeting using incremental cash flows, NPV/IRR/PBC decision rules, profitability index, and core risk-and-return measures for portfolios and individual investments.",{"@graph":69,"@context":123},[70,84,106],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":20,"@type":76,"position":81},"https://docshare.wps.com/document/exam/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/fin-300-tip-sheet-ch6-11-compiled-peer/395497/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/fin-300-tip-sheet-ch6-11-compiled-peer/395497.png","ImageObject",300,407,{"name":92,"@type":93},"Noah","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-10-31","2026-09-26",true,{"@type":102,"interactionType":103,"userInteractionCount":105},"InteractionCounter",{"@type":104},"ViewAction",12,{"@type":107,"mainEntity":108},"FAQPage",[109,115,119],{"name":110,"@type":111,"acceptedAnswer":112},"How do you determine whether a bond trades at a premium, par, or discount?","Question",{"text":113,"@type":114},"Compare coupon rate (CPN%) and yield to maturity (YTM%). If CPN% > YTM%, the bond price exceeds face value (premium). If CPN% = YTM%, price equals face value (par). If CPN% \u003C YTM%, price is below face value (discount).","Answer",{"name":116,"@type":111,"acceptedAnswer":117},"What is the relationship between interest rates and bond prices?",{"text":118,"@type":114},"When interest rates rise, bond prices fall, and when interest rates fall, bond prices rise. Long-term bonds and bonds with lower coupons are more sensitive to interest-rate changes.",{"name":120,"@type":111,"acceptedAnswer":121},"Which decision rule should you use in capital budgeting and how is NPV used?",{"text":122,"@type":114},"Use NPV as the primary decision rule: if NPV > 0, accept the project. The sheet also outlines how to compute NPV using incremental free cash flows and separate present value of CCA tax shields when applicable.","https://schema.org",{"og:url":83,"og:type":125,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":127,"canonical":83},"index,follow",{"doc_id":129,"site_id":62},395497,1790828182,{"code":4,"msg":5,"data":132},{"doc_id":129,"user_id":133,"nickname":92,"user_avatar":134,"doc_module":4,"category_id":19,"category_name":20,"doc_title":65,"doc_description":67,"doc_content":135,"file_id":136,"file_url":137,"file_type":138,"file_size":139,"view_count":105,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":8,"language":140,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":141,"faqs":142,"seo_title":143,"seo_description":67,"update_tm":144,"read_time":81,"preview_page_count":4},8796095462418,"https://ap-avatar.wpscdn.com/avatar/80000253c1241d02b47?x-image-process=image/resize,m_fixed,w_180,h_180&k=1778826106357471780","Based on Fundamentals of Corporate Finance 2nd edition  \nFIN 300 TIP SHEET Ch.6-11  \nCompiled Peer  \nby TRSM Academic Helper, Wiktoria G.  \n\n|  |  | Bonds\u003Cbr>􀮼􀯢􀯨􀯣􀯢􀯡 􀯥􀯔􀯧􀯘 􀯫 􀮿􀯔􀯖􀯘 􀯩􀯔􀯟􀯨􀯘 CPN = ~~ ~~\u003Cbr>\\# 􀯢􀯙 􀮼􀯉􀯇 􀯣􀯠􀯧􀯦 ./􀯬􀯘􀯔􀯥\u003Cbr>Use calculator to figure out Price/YTM/Face value Calc:\u003Cbr>N = \\# of periods, not years (yrs x cpm frequency)\u003Cbr>I% = YTM (NOT CPN rate) PV = price of a bond\u003Cbr>PMT = CPN (use formula for the coupon) FV = Face value\u003Cbr>**enter PMT and FV as +, but PV as –(inflows/outflows)\u003Cbr>• Treasury Bonds/ Government bonds are risk free\u003Cbr>• Any other bonds have some risk that must be compensated\u003Cbr>✓ CPN%>YTM or PV > FV = Premium\u003Cbr>✓ CPN%=YTM or PV = FV = Par\u003Cbr>✓ CPN%\u003CYTM or PV\u003C FV = Discount\u003Cbr>• When interest rates rise, bond prices fall (vice versa)\u003Cbr>• Long term bonds and bonds with lower coupons are more sensitive to interest rates\u003Cbr>• Credit spread: YTM ofa bond – YTM of treasury Bond |  |  |  |  | Stocks\u003Cbr>rE =􀮽􀯜􀯩1􀯉􀯉1-1 = 􀮽􀯜􀯣􀯩0~~ ~~1 + 􀯉~~ ~~1􀯉􀯉0 (Div. yield + capital gain rate) Dividend discount model – discount divs using rE to get the PVP0 = (􀮽1􀯩􀯥1􀮾) +(1􀯜􀯩􀯥2􀮾)2 +…+(1􀯜􀯩􀯥~~􀳙~~􀮾)􀳙 + (1~~􀳙~~􀮾)􀳙\u003Cbr>**Use Cash Flow function on Calc.\u003Cbr>Use Perp. Formula for continuing stable growth divs P0 = 􀮽􀯥􀮾1􀯚~~ ~~ (only brings it back 1 year!)\u003Cbr>• Change in earnings = New inv x Return on New Inv(earnings x Retention rate)\u003Cbr>• Growth (g) = Retention R. x Return on new investment\u003Cbr> • Repurchases Model: P0 = 􀯉􀯌􀯩ℎ􀯔(􀯧􀯥􀯢􀯘􀯧􀯦􀯔􀯟􀯈􀯗􀯨􀯜􀯧􀯩􀯦􀯥􀯘􀯡􀯣􀯗􀯜􀯨􀯡􀯥􀯚􀯖ℎ􀯔􀯔􀯧􀯦􀯬􀯘􀯥􀯦0)~~ ~~ \u003Cbr>• Enterprise Value = Market value of equity + debt – cash\u003Cbr>• FCF = EBIT (1-Tc) + Depr – CapEx – Inc. In NWC\u003Cbr>• V0= PV of all Future Free cash Flows\u003Cbr>V0 = (11􀯔􀯖􀯖) +(1+􀮿􀯥􀮼􀮿2􀯪􀯔􀯖􀯖)2 +…+ (1+􀮿􀯥􀮼􀯪􀮿􀳙􀯔􀯖􀯖)􀳙\u003Cbr>• P0 = 􀯌􀯏ℎ0􀯔􀯥􀯦􀮼􀯔􀯢􀯦􀯨ℎ0􀯧􀯦􀯧􀯔–􀮽􀯡􀯘􀯗􀯕􀯧0􀯜􀯡􀯚~~ ~~0\u003Cbr>**the different cash flows or dividends can be entered into the Cash function to calculate PV |  |  |  |  |  |  |  |  |\n| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  | Capital Budgeting (ONLY INCREMENTAL AMOUNTS)\u003Cbr>• Unlevered NI = (INC. REV – INC. COSTS – CCA) X (1 – Tc)\u003Cbr>• FCF = Unlevered NI + CCA – CapEx – Increase in NWC\u003Cbr>• NWC = Cash + Inv + rec – Payables (current assets – current liab)\u003Cbr>• After-tax CF from asset sale = sale price –(tax rate x cap gain)\u003Cbr>• CCA deductions for FCF:\u003Cbr>Yr UCC CCA 1 1/2 CapEx (half yr rule) UCC1 x CCA rate 2 CapEx – CCA ded. From yr 1 UCC2 x CCA rate 3 UCC yr 2 – CCA ded yr 2 UCC3 x CCA rate\u003Cbr>To find NPV\u003Cbr>1. Find NPV of FCF (EXCLUDING CCA)\u003Cbr>2. Find PV of CCA tax shields 􀮼􀯔􀯣􀮾􀯫 􀯫 􀮼􀮼􀮺 􀯥􀯔􀯧􀯘 􀯫 􀯍􀯖 1+􀳝\u003Cbr>= ~~ ~~ x  2\u003Cbr>(􀯥+􀮼􀮼􀮺 􀯥􀯔􀯧􀯘) 1+􀯥\u003Cbr>- ~~ ~~􀯆􀯜􀯡~~ ~~􀯦􀯔􀯟􀯘(􀯣􀯥􀯜􀯖􀮼􀯘􀮼􀯫􀮺􀮼􀯥􀮼􀮺􀯔􀯧􀯘􀯥􀯔􀯧􀯘)~~ ~~􀯫~~ ~~􀯍􀯖 x (1􀯥)􀳟 (only if u sell) |  |  |  |  |  |  |  |  |\n|  | NPV/investment decisions\u003Cbr>• Three decision rules: (always decide based on NPV) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |\n|  | NPV > 0, accept\u003Cbr>IRR > r or i%\u003Cbr>PBC \u003C specified period |  | Insert given cash flows onto the list in calc. compute NPV (input I%), or find IRR/PBCK |  |  |  |  |  |  |  |  |  |  |  |  |\n|  | •IRR = cost of capital at which NPV is 0\u003Cbr>•If projects have different lives, compute NPV of each one and then use that NPV as FV, input N and I% and sol","cbCaisr9XUpamCkk","https://ap.wps.com/l/cbCaisr9XUpamCkk","pdf",375111,"English","# Bonds\n## Coupon rate vs yield to maturity\n# Stocks\n## Dividend discount model\n# Capital Budgeting\n## Incremental cash flows and NWC\n## NPV, IRR, and profitability index\n# Risk and Return\n## Portfolio returns and variance","[{\"question\":\"How do you determine whether a bond trades at a premium, par, or discount?\",\"answer\":\"Compare coupon rate (CPN%) and yield to maturity (YTM%). If CPN% \\u003e YTM%, the bond price exceeds face value (premium). If CPN% = YTM%, price equals face value (par). If CPN% \\u003c YTM%, price is below face value (discount).\"},{\"question\":\"What is the relationship between interest rates and bond prices?\",\"answer\":\"When interest rates rise, bond prices fall, and when interest rates fall, bond prices rise. Long-term bonds and bonds with lower coupons are more sensitive to interest-rate changes.\"},{\"question\":\"Which decision rule should you use in capital budgeting and how is NPV used?\",\"answer\":\"Use NPV as the primary decision rule: if NPV \\u003e 0, accept the project. The sheet also outlines how to compute NPV using incremental free cash flows and separate present value of CCA tax shields when applicable.\"}]","FIN 300 TIP SHEET Ch.6-11 - Compiled Peer | PDF",1790420338]