Learning Outcomes

When you have successfully completed this course, you will be able to:

 describe and evaluate the basic features of financial markets

 identify the basic components of nominal interest rates and use them to make expected return comparisons among assets

 apply time value of money concepts to complex cash flow scenarios

 price bonds and other fixed-income financial assets

 understand the basics of the term structure of interest rates and the yield curve

 determine the fundamental price for common stock, using the constant-growth dividend discount model

 use the Capital Asset Pricing Model to quantify the risk-return tradeoff

 determine a firm’s weighted average cost of capital

 evaluate alternative techniques for analyzing project opportunities and budgeting capital

 apply the net present value criterion to complex capital budgeting problems