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Capital Markets and Corporate Finance (Streams 10/11): FINC5001

Dr. Reuben Segara Finance Discipline School of Business University of Sydney


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Introduction & Prelminary Concepts


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What is Corporate Finance About?


What are your expectations of this unit? What do you expect to learn?

What do you expect to learn?


1. 2. 3. 4. How to get wealthier? How to pick stocks to invest in? How companies make decisions? Something else.

Please note: Lecture notes will be available on blackboard before each lecture (including todays notes)
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This Lecture
PART I: INTRODUCTION
Teaching staff Objectives Potential careers targeted with this unit Unit of study outline: contents requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Teaching Staff
Name: Dr. Reuben Segara Located: Room 447, Economics & Business Building E-mail: r.segara@econ.usyd.edu.au Consultation time: Monday 3pm-4pm

This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Objectives of the Course


Know the theories underlying the operation of financial markets and relevant asset pricing models. Understand the theory and practice of making investment, financing and dividend decisions Learn how to process information into a format that you will be able to analyse and interpret to make financial decisions. Learn to discover methods of data-sourcing and research to apply generalised findings to your own unique situation. Be able to work in a small team, noting that communication and interpersonal skills are essential for a professional career.
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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Potential jobs to target


Analyst/Associate with investment bank or management consulting firm Goal: Equity Analyst, Debt analyst, President or Director Company analyst in Brokerage and Funds Management, Goal: Manager or Head Trader Financial planner with retail and institutional banking bank or management, Goal: Head of Financial Planning Services Treasurer/Controller positions in multinational companies. treasury functions Goal: Credit manager, Cash manager, Head of treasury, CFO, CEO Sales/Trader with broker-dealer / investment banks trading desk / bank; learning to trade equities / debt / currencies / derivatives. Goal: Head Trader
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Job Requirements
Analysts Corporate Finance
Company: Location: Remuneration: Position Type: Dresdner Kleinwort Wasserstein UK-London Competitive Employee

We currently have a number of opportunities for analysts to join our Corporate Finance & Origination Department. Job Requirements:

Technical:
Accounting: calculate financial and accounting ratios. Modelling: Use and adapt Merger and DCF Models, ability to build tailor-made models, ability to use and understand non-standard models. Valuation: Demonstrate a thorough understanding and application of the different methods of Valuation techniques. E.g., DCF methodology (incl. WACC calculation), Multiples- trading and transaction Research: Utilise databases such as Bloomberg, Reuters, Datastream, Investec etc. Utilise Internet effectively Legal & Regulatory Knowledge and Principles: demonstrate knowledge of the legal and regulatory issues in a wide range of IB transactions, ability to assist in the preparation of public documentation Procedures: demonstrate a clear understanding of the Compliance and Procedures Manuals, be aware of the range of standard documents and aware of the policy in using them. Be responsible for maintaining transaction files Systems: Demonstrate Advanced Excel skills and effective use of PowerPoint

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Job Requirements
Analysts Corporate Finance
Job Requirements

Transaction and Marketing:


Assist in the preparation of discrete elements of presentations Self review and critical evaluation of all work before submission to others Manage and prioritise a number of simultaneous tasks to meet deadlines whilst reporting to more than one person Manage and monitor printing and binding and ensure completion within agreed time-scale Develop broad understanding of sector/regional and relevant competitive landscape Attend client and internal meetings where appropriate

Teamwork/Leadership:
Demonstrate a high degree of reliability, motivation and enthusiasm Use judgement to seek clarification from superiors

Communication:
Demonstrate clear, confident oral communication Define issues, explain complex concepts succinctly Demonstrate clear and concise drafting skills through input to discrete areas of presentations and other written communication Additional European languages are highly desirable

Motivation:
Demonstrate drive and commitment to results Proactive in seeking learning opportunities

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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FINC5001 Capital Markets and Corporate Finance

UNIT OF STUDY OUTLINE

PRESCRIBED TEXTBOOK

Introduction to Corporate Finance


By: Alex Frino Zhian Chen Amelia Hill Carole Comerton-Forde Simone Kelly

Available from your Campus Bookshop

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UNIT OF STUDY OUTLINE


ADDITIONAL RECOMMENDED TEXTBOOKS Corporate Finance, 5th Edition, by Bishop, S.R, R.W. Faff, B. Oliver and G.J. Twite, Pearson Education, 2004. Principles of Corporate Finance, by Brealey, R.A., S.C. Myers, G Partington and D Robinson, McGraw Hill, Inc., 2001.

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Perdisco e-workbook
An online study resource has been developed for this unit to help you: learn the complex content covered this semester

make the most of your limited study time

Its designed to give you the chance to practice, revise and focus on each topic until you completely understand it

Contains interesting (and often humorous) practice questions to help you learn difficult concepts

E-workbook feedback provides step-by-step solutions to help you find out where you went wrong

You also receive an academic discussion explaining how to get the answer correct next time

I really appreciated the prompt feedback. Its like having a tutor there to explain things to you, whereas you cant always make use of consultation hours.
Angela, University of Sydney

The e-workbook has brought up my grades from a Pass to a Distinction with this e-workbook I have a greater ability to excel in my studies.
Adam, ACU

What do other students think of their e-workbook?

How to register
1.

Go to www.perdisco.com/students Click Create a new account Follow the instructions on screen Student companion website
http://wps.pearsoned.com.au/au_be_frino_intcorpfin_3/

2.

3.

4.

TOPICS COVERED IN UNIT


# 1 2 3 4 5 6 7 8 9 10 11 Topics Covered Introduction Review of Financial Mathematics Valuation of Stocks and Bonds Capital Budgeting Risk and Return Capital Asset Pricing Model (CAPM) Company Cost of Capital Australian Equities Markets The Pricing Efficiency of Capital Markets Dividend Policy Capital Structure Policy
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Where does this fit in a finance major?


Introduces you to basic corporate finance concepts Later units will build on this knowledge. Specific course in Derivatives, Broking & Market Making, Mergers & Acquisitions, International Businss Finance

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Study Time
How much time do you expect to spend studying for this unit outside of class?
1. 0-3 hours per week 2. 3-6 hours per week 3. 6-9 hours per week 4. More than 9 hours per week

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Study Techniques
The best way to study for this unit will be:
1. Attending lectures and reading the text book. 2. Preparing for the tutorials and answering practice questions 3. Working in groups with other people on various problems 4. Applying what we are learning to the real world 5. All of the above.

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Some Helpful Hints


INTEREST IN TOPIC HELPS EFFECTIVE LEARNING Apply what you learn to the real world Read the Australian Financial Review Come prepared to classes Buy some shares! (and/or derivatives)

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Useful Websites
Australian Stock Exchange www.asx.com.au Australian Financial Review www.afr.com.au Sydney Morning Herald Trading Room www.tradingroom.com.au Egoli www.egoli.com.au
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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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UNIT OF STUDY OUTLINE


Learning Outcomes The learning goals are under five category headings (P.R.I.C.E)
Personal and Intellectual Autonomy Research and Inquiry Information Literacy Communication Ethical, Social and Professional Understanding

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LEARNING OUTCOMES
Personal and Intellectual Autonomy
reflecting on the application of unit of study material to current events.

1. Demonstrate a commitment to lifelong learning by

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LEARNING OUTCOMES

2.

Research and Inquiry:


Demonstrate understanding of financial mathematics and accurately value stocks and bonds. Critically evaluate and effectively implement alternative capital budgeting techniques. Accurately estimate the weighted average cost of capital.

3. 4.

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LEARNING OUTCOMES

5.

Research and Inquiry:


Analyse the relationship between risk and return and accurately estimate the Capital Asset Pricing Model Succinctly describe the process of trading equity in Australia and assess the efficiency of this process. Develop coherent arguments on and numerically demonstrate the impact of dividend policy and capital structure policy on company valuations.
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6.

7.

LEARNING OUTCOMES

8.

Information Literacy:
Manage, analyse, evaluate and use information to make corporate finance decisions.

9.

Communication:
Confidently, coherently and concisely communicate orally and in writing, to a professional standard.

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LEARNING OUTCOMES

10.

Ethical, Social and Professional Understanding:


Demonstrate an appreciation of the importance of the importance of being able to collaborate with and learn from others.

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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UNIT OF STUDY OUTLINE


ASSESSMENT Attendance and activity Tutorial questions Mid-semester exam Major assignment Final exam Compulsory Compulsory 20% 25% 55%

STANDARDS and WAYS TO PERFORM


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UNIT OF STUDY OUTLINE


STANDARD BASED ASSESSMENT
50% PASS Demonstrated knowledge in assessments fulfilling the set standards: 90-100% of class 65% CREDIT Demonstrated knowledge fulfilling standards and better than average performance in assessments. Less than 40% of class. 75% DISTINCTION Demonstrated knowledge in excess of set standards and demonstrated ability to apply this knowledge to new situations. Less than 20% of class. 85% HIGH DISTINCTION Demonstrated exceptional knowledge of the subject and exceptional skills at applying the knowledge to a varying set of scenarios. Outstanding performance in all parts of the assessment. 5% of class. In a typical class normally distributed, but some years the average outcome is higher or lower than the set standards.
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UNIT OF STUDY OUTLINE


ASSESSMENT COMPONENTS IN DETAIL

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Tutorial Questions
Workshop questions for each topic are placed in the course outline. Additional questions on the current topic may be placed onto Blackboard. The answers to set workshop questions will be discussed by the class during lectures in the following week. Workshop participation is strongly emphasised for a better learning outcome. Solving the questions before each workshop is compulsory and will help you to take part in the discussion and actively learn and retain knowledge of the course material
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Mid Semester Exam (20% of final grade)


Held on Saturday 28 March, 2009 Multiple choice exam based on all lecture / readings / workshop material from weeks 1 to 3. This is a closed book examination. Purpose of this assessment is to give you an early indication of your understanding of the unit of study material. Further details of the mid-semester exam will be posted onto Blackboard the week prior to the examination.
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Major Assignment (25% of final grade)


Topic of the assignment including instructions will be distributed on Blackboard by Week 4 (i.e. commencing 23 March)
Description Group Formation and Agreement Form Draft report Final Report Date Week 5 (i.e. commencing 30 March) By 4pm Friday 1 May By 4 pm Friday 15 May Location In lectures Digital Drop-off Box Assignment box Level 1, Economics & Business Building (H69) & Digital Drop-off Box Assignment box Level 1, Economics & Business Building (H69)

Group assignment selfreflective journal

By 4 pm Friday 15 May

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Final Exam (55% of final grade)


Closed book exam during June (commencing 15/06/09) Set of shorter exact questions and longer questions based on ALL material presented during the course (the format of the final examination will be provided in the review lecture) Student expected to apply the ideas of the course to practical and research settings

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Corporate Objective of the Firm


Overall goal is to maximise the value of the firm. To maximise shareholder and debt holder wealth.
Market value = current traded share price Firms maximising their investment, financing and asset management decisions will maximise the value of the firm also

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Corporate Objective of the Firm


Why maximise owner wealth?
Regulator (i.e. ASIC) Remuneration incentive schemes Market for corporate control Shareholder votes Management ownership BUT, there are agency problems

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Measuring company value


Example: Major Newscorp securities traded on the ASX (as at 27 January 2005)
SECURITY (Common stock) Class A Class B TOTAL
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ASX STOCK CODE NWS NWSLV

NO. ISSUED (m) 1045 1893

LAST SALE PRICE 22.72 21.90

MARKET CAP. ($b)

Corporate Finance Decisions


Managers maximise firm value through their decisions
1. Investment decisions 2. Financing decisions 3. Dividend decisions

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The Investment Decision


What real assets should the firm invest in to operate its business and generate cash flows? Two important considerations involved:
The type of assets the firm should use How many assets it needs to run its business

Development of a process to evaluate the desirability of asset purchases


Capital budgeting evaluation (Chapter 4)
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The Investment Decision (Contd)


Acquisition of real assets normally the most important consideration
This refers to physical assets such as buildings or machinery used to manufacture a product for sale or to provide a particular service

Often need to select the best real asset from a range of alternatives Investment decision is also concerned with the purchase of more intangible assets such as patents or shares in another company
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The Financing Decision


How should the firm raises funds to purchase these assets? How does the firm choose its gearing ratio? What are the costs of each different source of finance? Should the firm issue short-term or longterm securities?
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The Financing Decision


What is the optimal mix of equity and debt to employ? (Chapter 11)
Introduces the importance of capital structure choice Consideration of risk and cash flows associated with different finance sources [i.e. Cost of those finance sources] CAN INFLUENCE THE FIRMS INVESTMENT DECISION.
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The Dividend Decision


How should the firm pass on the returns to shareholders? (i.e. capital gains/dividends) This is Dividend Policy (Chapter 10) Can the dividend decision affect the value of the firm? (i.e. Is the market efficient)

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QUESTION
Which of the following is not a corporate finance decision?
1. 2. 3. 4. Increasing the companys dividend Investing in a new factory Hiring a new CFO Issuing new shares

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Nature of Assets (Real Vs Financial)


Assets can be divided into:

Real assets & Financial assets

Assets that can be put to productive use to generate a return e.g. machinery and equipment

Assets that represent a claim to a series of cash flows against an economic unit
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QUESTION
Identify two financial assets and two real assets that exist in BHP Biliton

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Firm Valuation (Revisited)


The market value of the firm can be determined in two ways:
1. Sum the market values of its real assets 2. Sum the market values of the financial claims against those real assets

Common to use the second method, as there is an active secondary market for financial assets, but not necessarily for real assets
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Capital markets
Medium for issuing and exchanging financial assets. For example:
The Australian Securities Exchange (ASX) The Australian government bond market

Provides a means of exchanging current for future consumption.


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The flow of funds


n
Investors
+ve Cash flows Dividend decision

Real assets

Consumption investment decision

q
Investment decision

Capital market

Capital structure decision Financial asset valuation

Corporations

o
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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Valuation of Financial Claims


There are three important factors to consider when valuing the financial claims on a firm:
Cash flows Time Risk

Valuation involves discounting the claims to a firms cash flows over the time of its life at an appropriate rate of return for the risk associated with those cash flows
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Valuation of Financial Claims


For an asset with a one-year maturity, the relationship between its value (price), cash flow and risk is given as follows:

where:

F1 Value ( P0 ) = (1 + r )

F1 = cash flow from asset in year 1 r = rate of return required on asset


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Valuation of Financial Claims


Value (P0) represents the assets equilibrium or intrinsic price
The price of the asset in a perfect capital market Based on the certainty of cash flows and no imperfections within the capital market No opportunity to make arbitrage profits by trading on asset mis-pricing

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Valuation of Financial Claims


Example:
How much would you be prepared to pay for this financial asset?
0 value? 1 year $110

BHP is currently offering an annual rate of return of 10%

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Valuation of Financial Claims


Example (Contd)
You have the opportunity to invest in an asset providing a one-year cash flow of $110 and your required rate of return is 10%.

You would be prepared to pay $100 now to receive the certain $110 cash flow a year from now

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Valuation of Financial Claims QUESTION


Would you pay more than $100 for that financial asset? NO/YES Would you pay less for that $100 for that financial asset? NO /YES

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Time Value of Money


Money has a time value Money has a time value due to the existence of positive rates of interest Would always prefer to receive $1 today to $1 a year from today (or any future time)

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Assumption of Certainty
Future cash flows are risky (ie. uncertain) Commonly investors are characterised as risk averse Risk aversion implies that increases in risk require increases in return known as a risk premium. Appropriate discount rate for future cash flows must incorporate risk premium and time value of money.
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Perfect Capital Market


Properties defined by Fama and Miller (1972):
1. No transactions costs 2. Equal and costless access to information 3. Market participants are price-takers 4. Individuals and firms borrow and lend at same rate 5. No taxes on interest rates or dividends

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Arbitrage
The equilibrium price of a security should equal its value Also, assets of equal risk should have equal prices. In the absence of this condition, arbitrage profits arise. Arbitrage profit is earned by taking no risk and through the use of borrowed funds.
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Rates of return
Definition

Net gain from asset Return t = Invested Capital


For a share:

Price t - Price t-1 + dividend t Return t = Price t-1


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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Rate of return on securities


Example: Rate of return on National Australia Bank shares and the S&P/ASX 200 index (7 March, 2005) NAB opened on 4 March 2005 at $29.46 and opened on 7 March 2005 at $29.73.

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Rate of return on securities


Example: Rate of return on National Australia Bank shares and the S&P/ASX 200 index (7 March, 2005) S&P/ASX 200 Index closed on 4 March 2005 at 4220.4 and opened on 7 March 2005 at 4238.3

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This Lecture
PART I: INTRODUCTION
Teaching competence Objectives Potential careers targeted with this unit Unit of study outline: contents Requirements learning outcomes assessment

PART 2: PRELIMINARY CONCEPTS


Corporate objective of the firm & Corporate finance decisions Nature of Assets (Real Vs. Financial) Firm Valuation, Capital Markets & the Flow of Funds Valuation of Financial Claims Rates of Return on Securities The Market Section & Financial Press
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Markets Section
You should be able to identify the following:
Price at which stock last traded Number of shares traded Best unexecuted buying & selling prices Bid-ask spread Highest & lowest price over last year Value of S&P/ASX 200
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Markets Section

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
52-WEEK HIGH LOW 0.036 5.9 0.018 4.25 DAYS HIGH LOW 0 4.9 0.000 4.780 ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
52-WEEK HIGH LOW 0.036 5.9 0.018 4.25 DAYS HIGH LOW 0 4.9 0.000 4.780 ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
52-WEEK HIGH LOW 0.036 5.9 0.018 4.25 DAYS HIGH LOW 0 4.9 0.000 4.780 ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd LAST SALE 0.023 4.82 +1 +/VOL 100s --6860 QUOTE BUY SELL 0.02 4.81 0.03 4.82

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd LAST SALE 0.023 4.82 +1 +/VOL 100s --6860 QUOTE BUY SELL 0.02 4.81 0.03 4.82

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd LAST SALE 0.023 4.82 +1 +/VOL 100s --6860 QUOTE BUY SELL 0.02 4.81 0.03 4.82

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd LAST SALE 0.023 4.82 +1 +/VOL 100s --6860 QUOTE BUY SELL 0.02 4.81 0.03 4.82

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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
ASX CODE JUM JUP COMPANY NAME Jumbomail.com Jupiters Ltd LAST SALE 0.023 4.82 +1 +/VOL 100s --6860 QUOTE BUY SELL 0.02 4.81 0.03 4.82

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The financial press


Information can also be obtained regarding the performance of different groupings of stocks Standard & Poors, on behalf of the ASX, calculates a range of indices that are designed to show the performance of particular sectors, particular types of stocks or the market overall
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The financial press


Example:
Extract from the Australian Financial Review markets section (25 October 2002)
SHARE PRICE INDICES INDEX SP/ASX 200 All Ordinaries

Oct-23 3031.9 2987.2

Oct-24 3023.6 2978.8

Var -8.3 -8.4

The closing value for each index for the previous two days indicates how much it has increased or decreased the previous day
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Whats next?
Week 1 Tutorial problems to be discussed in Lecture 2. Building on these basic concepts:
How to value an asset if there are multiple cashflows in multiple periods Chapter 2 How to apply valuation to stocks & bonds Chapter 3 Apply valuation to real assets to appraise investment projects Chapter 4 An overview of capital markets Chapter 8 & 9

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