Professional Documents
Culture Documents
An Overview of Financial
Management
Topics in Chapter
10
FCF1
(1 + WACC)1
FCF2
(1 + WACC)2
FCF
(1 + WACC)
11
What is an agency
relationship?
An agency relationship arises
whenever one or more individuals,
called principals, (1) hires another
individual or organization, called an
agent, to perform some service and
(2) then delegates decision-making
authority to that agent.
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13
14
15
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(More)
20
22
23
25
26
What is transparency in
financial reporting?
27
What is Sarbanes-Oxley?
Cost of Money
Production opportunities
Time preferences for consumption
Risk
Expected inflation
31
32
34
Financial Securities
Debt
Money
Market
T-Bills
CDs
Eurodollars
Fed Funds
Capital
Market
T-Bonds
Agency bonds
Municipals
Corporate bonds
Equity
Derivatives
Options
Futures
Forward
contract
Common
stock
Preferred stock
LEAPS
Swaps
35
5.00 +
3.12 +
(More . .)
36
3.83%
Mortgages
6.04
Municipal bonds
4.56
5.49
Preferred stocks
6% to 9%
9% to 15%
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