Math 5621 (369) Financial Mathematics II

(Applied Mathematics of Corporate Finance)

Fall 2015

Instructor--James G. Bridgeman

Meets in MSB 319 on Mondays

Meets in MSB 215 on
Wed-Fri

Opportunity Cost
of Capital and WACC

The solution to Q14 in the financial
analysis handout is incorrect. Correct is 14(a) .0847 and 14(b) .1429. Make
sure you can get those answers. Extra credit to anyone who can figure out how
the authors (or the grad student who came up with the solutions) got their
incorrect answers.

The solution manual has an error for
exercise 2.8. You should be able to spot the error yourself, but ask me if you
do not see it.

The solution manual has an error for
exercise 5.14 part (b). A hint for the correct solution: when you sell
something short you get cash in return.

AS STATED IN SYLLABUS, PAPERS ARE
DUE MON. 12-14. DUE BY 5 PM UNDER MY
DOOR, IN MY MATH MAILBOX OR ELECTRONICALLY.

FINAL
EXAM SOLUTIONS GRADING
WORKSHEET course grades posted on registrar’s site.

**Cumulative assignments **(most recent assignment at top)

(Final)

Read ch. 9 for background only

Do exercises 16.1, 16.5, 16.6, 16.7, 16.8 and 16.10

Study sections 16A-D and 16G

Do Exercises 15.11-15.15, 15.17-15.18, and 15.20-15.21

Do exercises 15.1-15.9

Read for background 15K-L

Study Section 14C and Sections 15A-15J

Your choice of a paper topic is due 11-9

Do exercises 11.1, 11.3, 11.4, 11.8, and 11.9

Study Chapter 11 sections A, D, E, F and G (read the other sections for background only)

Do exercises 10.1, 10.2, 10.5, 10.6, 10.8

Study Chapter 10, sections A, C, E, and F (read the other sections for background only)

Study sections 7G, H, and I and read 7J and 7K for background

Do exercises 6.2-6.18, 6.21

Verify or prove wrong the PVGO formula given in class on 10-14

Study Chapter 6

Do exercises 5.3-5.7, 5.9-5.11, and 5.13-5.14; make sure you understand exercise 5.8 (but no need to prove)

Study Chapter 5

Read chapters 3 and 4 for background only

Do exercises 14.1 thru 14.5

Study Chapter 14, section B … keep connections with financial analysis statement handout, chapter 2 and chapter 14A in mind.

Work through Chapter 14A again but drop the assumption that maintenance/replacement investment exactly equals depreciation plus amortization – write down all the formulas, which now will be revised and more complicated by the dropped assumption.

Study Chapter 7, sections A-E

Study Chapter 14, section A … keep in mind the connections with chapter 2 and with financial statements

Do exercises 2.1 thru 2.11

Study Chapter 2 C-H

Study Opportunity Cost of Capital and WACC (download it just above)

Read for background Chapter 1 and Chapter 2, sections A and B

Read the accounting statements link above

Study the financial statement analysis handout, do all Quiz questions, Practice Qu. 4,7,8,9,10 and Challenge Qu. 1

(Quiz #4 through #8 may illegible on the handout. Clear copies are here)

(the quiz solutions are in the
handout; the PQ and CQ solutions are __here__.)

**Recommended but not
required**

Cheap student subscription to Wall Street Journal at http://student.wsj.com/ (no www!), scroll down to school section, enter ZIP 06269, select UConn and a professor.

Not really cheap but at least cheaper subscription to the Economist at https://subscriptions.economist.com/NAM/SRCH/G/STU/

Really not cheap, but still good, student subscription to The Financial Times at https://sub.ft.com/spa_stu/