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NPV, Investment Criteria, & Capital Market History Notes

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CHAPTER 5
Net Present Value and Other Investment Criteria
5.1:
Current Dividend Per Share
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Current Share Price
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Required Return for Dividends
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Required Return on Stock
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Share Price with Declining Dividends
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Share Price with Delayed Dividends
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Share Price with Unusual Dividend Policy
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Target Stock Price
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Current Stock Price Calculation
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Share Price with Nonconstant Dividends
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Share Price with Supernormal Growth
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CHAPTER 6
Net Present Value and Other Investment Criteria
6.1:
NPV Calculation
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NPV with Annuity Cash Flows
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Break-Even Growth Rate Calculation
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6.2:
Payback Period Calculation
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Payback Period for Investment Project
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6.3:
Discounted Payback Period Calculation
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Discounted Payback Period for Investment
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Discounted Payback for Mutually Exclusive Projects
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‫‪6.4:‬‬
Average Accounting Return Calculation
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AAR with Salvage Value
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AAR with Net Loss
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6.5:
Calculating Internal Rate of Return (IRR)
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Calculating IRR for Indifference Point
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6.6:
MIRR Calculation (Discounting Approach)
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MIRR Calculation (Reinvestment Approach)
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MIRR Calculation (Combination Approach)
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‫‪6.7:‬‬
Calculating Profitability Index
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Evaluating Mutually Exclusive Projects
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CHAPTER 7
Some Lessons from Capital Market History
7.1 :CALCULATE THE RETURN ON AN INVESTMENT
Calculating Stock Return
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Calculating Dividend Yield
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Calculating Capital Gains Yield
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Total Return, Dividend Yield, Capital Gains Yield
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Total Dollar Return, Nominal and Real Return
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Total Real Return on Bond Investment
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7.2: DISCUSS THE HISTORICAL RETURNS ON VARIOUS IMPORTANT TYPES OF INVESTMENTS .
Average Real Return and Nominal Risk Premium
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AVERAGE REAL RISK PREMIUM
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Arithmetic Average Return
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Geometric Average Return
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Estimating Future Returns Using Blume’s Formula
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7.3: DISCUSS THE HISTORICAL RISKS ON VARIOUS IMPORTANT TYPES OF INVESTMENTS
Arithmetic Average Return, Variance, Standard Deviation
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Average Return, Variance, Standard Deviation
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Standard Deviation of Stock Returns
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CHAPTER 8
Return, Risk, and the Security Market Line
8.1: SHOW HOW TO CALCULATE EXPECTED RETURNS , VARIANCE, AND STANDARD DEVIATION .
Portfolio Weights Calculation
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Expected Return on a Portfolio
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Expected Return on a Diversified Portfolio
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Portfolio Allocation for Desired Return
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Expected Return Calculation
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Expected Return in Market Conditions
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Expected Return and Standard Deviation
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Portfolio Return Calculation
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Return and Variance Calculation
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8.2: DISCUSS THE IMPACT OF DIVERSIFICATION .
Portfolio Expected Return
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Portfolio Variance
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Portfolio Standard Deviation
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Portfolio Risk Premium
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Portfolio approximate Real Risk Premiums
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Portfolio exact Real Risk Premiums
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Portfolio Beta
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Portfolio approximate Real Returns
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Portfolio exact Real Returns
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8.3: SUMMARIZE THE SYSTEMATIC RISK PRINCIPLE .
Systematic Risk Comparison
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Calculating Beta of a Stock
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Calculating Standard Deviation of a Stock
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Comparing Systematic Risk of Stocks
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8.4: DESCRIBE THE SECURITY MARKET LINE AND THE RISK -RETURN TRADE -OFF.
Portfolio Beta using weights
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Determining Stock Beta
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Expected Return via CAPM
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Beta Calculation via CAPM
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Finding the Risk-Free Rate
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Slope of the Security Market Line (SML)
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Reward-to-Risk Ratio
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Reward-to-Risk Ratio and Valuation Analysis
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Portfolio Management with Risk-Free Asset
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Portfolio Beta with Risk-Free Asset
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Portfolio Allocation with Stocks
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Portfolio Beta Using Stocks weights
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Expected Returns and Market Risk Premium
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