Review Chapters

Review Chapters
Table of Contents
Chapter 1 – What is money? ...................................................................................................................... 4
1.1 Definition of money ..................................................................................................................... 4
1.2 Function of money ...................................................................................................................... 4
1.3 Evolution of payment system .................................................................................................... 4
1.4 M2, M1 .......................................................................................................................................... 4
Chapter 2 – An overview of the financial system .................................................................................... 6
2.1 Analyzing the functions of financial market in the economy. ................................................ 6
2.2 Describe some ways in which financial intermediates help lower transaction cost in the
economy................................................................................................................................................... 6
2.3 What are the basic differences between bonds and stocks? ................................................. 6
2.4 Compare the problem of estimating stock cash flows to estimating bond cash flows? .... 6
2.5 Discuss the difference between Primary Market and Secondary Market (definition, type of
purchasing, financing, intermediary, price, organizational difference…) ......................................... 7
2.6 Analyze the difference between primary and secondary market (Definition, type of
product, purchase type, frequency of selling, parties involved, intermediary, purpose, price). .... 8
2.7 Describe the primary and secondary markets, and explain why secondary markets are so
important to businesses. ........................................................................................................................ 9
2.8 Analyze the difference between Money Market and Capital Market (Nature of market,
financial instruments, risk factor, liquidity, purpose, time horizon, function, merits, return on
investment). ............................................................................................................................................. 9
2.9 Characteristics of financial market ......................................................................................... 10
2.10 Types of debt ............................................................................................................................. 10
2.11 Secondary market ..................................................................................................................... 10
2.12 Liquid assets ............................................................................................................................. 10
2.13 Money market vs Capital market ............................................................................................. 10
2.14 Bonds ......................................................................................................................................... 11
2.15 Equity and debt ......................................................................................................................... 11
2.16 Direct finance vs Indirect finance ............................................................................................ 11
Chapter 3: The Stock Market, the Theory of Rational Expectations, and the Efficient Market
Hypothesis ................................................................................................................................................. 12
3.1 Stockholder................................................................................................................................ 12
3.2 Dividends ................................................................................................................................... 12
3.3 The value of any investment .................................................................................................... 12
3.4 Gordon Growth Model .............................................................................................................. 12
3.5 One-period valuation model..................................................................................................... 12
3.6 Generalized dividend model .................................................................................................... 12
3.7 Rational expectation ................................................................................................................. 12
3.8 Efficient markets hypothesis ................................................................................................... 13
Chapter 4 - Understanding Interest Rate ................................................................................................ 14
A. Lý thuyết ........................................................................................................................................ 14
4.1 The time value of money .......................................................................................................... 14
4.2 Loans .......................................................................................................................................... 14
4.3 Bonds ......................................................................................................................................... 14
4.4 Consols ...................................................................................................................................... 15
B. Bài tập tính toán ............................................................................................................................ 15
4.5 Dạng bài xác định trái tức ........................................................................................................ 15
4.6 Dạng bài tính giá hiện tại của trái phiếu ................................................................................. 15
4.7 Dạng bài tính tỷ suất sinh lợi đến ngày đáo hạn (Yield-to-maturity) của trái phiếu .......... 15
4.10 Dạng bài tập về Giá trị hiện tại – Giá trị tương lai của dòng tiền đầu kỳ, cuối kỳ .............. 18
Chapter 5 – Goals and governance of the firm ...................................................................................... 19
5.1 Finance / Financial market: ...................................................................................................... 19
5.2 Organizational structure of a corporation: ............................................................................. 19
5.3 Sole proprietorship: .................................................................................................................. 19
5.4 Limited partnership vs General partnership: ......................................................................... 20
5.5 Goals of the firm: ...................................................................................................................... 20
5.6 Agency problems: ..................................................................................................................... 20
5.7 Real assets vs financial assets: .............................................................................................. 20
5.8 Investing decisions vs Financing decisions: ......................................................................... 21
5.9 Tangible assets vs Intangible assets: ..................................................................................... 21
5.10 Capital structure: ...................................................................................................................... 21
5.11 Stakeholders:............................................................................................................................. 21
Chapter 6 – How to calculate present value?......................................................................................... 22
6.1 LÝ THUYẾT: ............................................................................................................................... 22
6.2 Dạng bài “Single payment cashflow” – Chỉ có 𝑪𝟎 và 𝑪𝒏 ...................................................... 22
6.3 Dạng bài “Multiple payment cashflows” – Có 𝑪𝟎, 𝑪𝟏, 𝑪𝟐, …., 𝑪𝒏 ........................................ 23
6.4 Dạng bài “Net present value”: ................................................................................................. 24
6.5 Dạng bài “Annuity” ................................................................................................................... 25
6.6 Dạng bài “Perpetuity” ............................................................................................................... 27
6.7 Dạng bài “Growth Annuity” ..................................................................................................... 28
6.8 Dạng bài “Growth Perpetuity” ................................................................................................. 29
6.9 Dạng bài “Discount Factor” ..................................................................................................... 29
6.10 Dạng APR (Annual Percentage Rate) ...................................................................................... 30
6.11 Dạng EAR ................................................................................................................................... 30
Chapter 7 – The value of common stocks and payout policy .............................................................. 32
LÝ THUYẾT: ........................................................................................................................................... 32
7.1 Dạng bài tính “Market Capitalization”: ................................................................................... 33
7.2 Dạng bài tính “P/E, EPS”: ......................................................................................................... 33
7.3 Dạng bài tính “dividend payout ratio” vs “plowback ratio”: ................................................ 33
7.4 Dạng bài tính “Price” của stock: ............................................................................................. 34
7.5 Dạng bài tính “Rate of return” (r%): ........................................................................................ 36
7.6 Dạng bài tính “dividend growth rate” (g%): ........................................................................... 36
7.7 Dạng bài tính “Dividend in year n”: ........................................................................................ 37
7.8 Dạng Stock price ....................................................................................................................... 37
7.9 Dạng Value of dividend ............................................................................................................ 37
7.10 Dạng Stock outstanding / Split stocks ................................................................................... 38
Chapter 8 – Financial Analysis ................................................................................................................ 39
Key terms cần nhớ: .............................................................................................................................. 39
Financial statements ............................................................................................................................. 39
Income of a company ........................................................................................................................... 39
8.1 Measuring performance ........................................................................................................... 40
8.2 Measuring Profitability ............................................................................................................. 40
8.3 Measuring Efficiency ................................................................................................................ 41
8.4 Measuring Leverage ................................................................................................................. 42
8.5 Measuring Liquidity: ................................................................................................................. 43
8.6 Measuring Investment .............................................................................................................. 44
8.7 Dạng tổng hợp........................................................................................................................... 44
Chapter 9 – Working Capital Management ............................................................................................. 47
Key terms cần nhớ: .............................................................................................................................. 47
9.1 Inventory Management ............................................................................................................. 47
9.2 Receivables Management ........................................................................................................ 48
9.3 Payables Management .............................................................................................................. 50
9.4 Cash Management .................................................................................................................... 50
Chapter 10 – Financial Planning .............................................................................................................. 52
Key terms cần nhớ: .............................................................................................................................. 52
10.1 Sources of cash ........................................................................................................................ 52
10.2 Uses of cash .............................................................................................................................. 53
10.3 Cash budgeting ......................................................................................................................... 53
Chapter 1 – What is money?
1.1 Definition of money
Money Currency Income Wealth
• Money is anything • Currency includes • Income is a flow of • The total collection
that is generally paper money and earnings per unit of of pieces of
accepted in coins. time. property that serve
payment for goods • An individualʹs to store value is a
and services or in annual salary is her person’s wealth.
the repayment of income.
debt.
• Money is used to
make purchases
1.2 Function of money
Of moneyʹs three functions, the one that distinguishes money from other assets is its function as a
medium of exchange.
Transaction costs are the time and resources spent trying to exchange goods and services.
Compared to an economy that uses a medium of exchange, in a barter economy, transaction costs are
higher.
Kevin purchasing concert tickets with his debit card is an example of the medium of exchange function of
money.
When money prices are used to facilitate comparisons of value, money is said to function as a unit of
account.
If there are five goods in a barter economy, one needs to know ten prices in order to exchange one good
for another. If, however, there are ten goods in a barter economy, then one needs to know 45 prices in
order to exchange one good for another.
Because it is a unit of account, money reduces the number of prices that need to be calculated.
Patrick places his pocket change into his savings bank on his desk each evening. By his actions, Patrick
indicates that he believes that money is a medium of exchange.
1.3 Evolution of payment system
A disadvantage of commodity money is that it is very heavy and hard to transport from one place to
another.
Compared to checks, paper currency and coins have the major drawbacks that they are easily stolen.
When compared to exchange systems that rely on money, disadvantages of the barter system include:
the requirement of a double coincidence of wants.
1.4 M2, M1
Which of the following statements best explains how the use of money in an economy increases
economic efficiency? Money increases economic efficiency because it decreases transactions costs.
Since it does not have to be converted into anything else to make purchases, money is the most liquid
asset.
Ranking assets from most liquid to least liquid, the correct order is currency; savings bonds; house.
The M1 measure of money includes travelerʹs checks.
Small-denomination time deposits is not included in the M1 measure of money but is included in the M2
measure of money.
Chapter 2 – An overview of the financial system
2.1 Analyzing the functions of financial market in the economy.
• Channel funds from economic players that have saved surplus funds to those that have a shortage
of funds;
• Direct finance: borrowers borrow funds directly from lenders in financial markets by selling them
securities;
• Promotes economic efficiency by producing an efficient allocation of capital, which increases
production;
• Directly improve the well-being of consumers by allowing them to time purchases better.
2.2 Describe some ways in which financial intermediates help lower transaction cost in the
economy
• Economies of scale-financial intermediaries have expertise in lowering transaction costs and their
large size allows them to reduce transaction costs per dollar as the size (scale) of transactions
increases (banks can use information over and over again to check credit)
• Able to draft single contract for a single cost & use it for thousands of people as a universal contract,
minimizing cost per contract.
2.3 What are the basic differences between bonds and stocks?
Bond Stock
Definition A bond is a certificate of indebtedness that stock represents a share of ownership in
specifies the obligations of the borrower to a firm and is, therefore, a claim on the
the holder of the bond profits that the firm makes.
Sales The sale of bonds to raise money is called the sale of stock is called equity finance
debt finance
Profits the owner of bonds receives a fixed the owner of shares of stock in a company
interest rate share in the profits of a company
Risk - Return Compared to bonds, stocks offer the
holder both higher risk and a potentially
higher return.
2.4 Compare the problem of estimating stock cash flows to estimating bond cash flows?
Bond cashflows Stock cashflows
Types of Bond cash flows also consist of two parts, There are two cash flows from stock:
cashflow periodic interest payments and a final periodic dividends and a future sales
maturity payment. price.
Profits These payments are established in writing Dividends are frequently changed when a
at the time the bonds are issued and firm’s earnings either rise or fall, which
can make them difficult to estimate.
cannot be changed without the firm The future sales price is also difficult to
defaulting and being subject to bankruptcy estimate, because it depends on the
dividends that will be paid at some date
even further in the future.
Price Stock prices tend to be more volatile,
because their cash flows are more
subject to change.
2.5 Discuss the difference between Primary Market and Secondary Market (definition, type of
purchasing, financing, intermediary, price, organizational difference…)
BASIS FOR
PRIMARY MARKET SECONDARY MARKET
COMPARISON
The place where formerly issued

The market place for new shares is
Definition securities are traded is known as
called primary market.
Secondary Market.
Type of
Direct Indirect
Purchasing
It supplies funds to budding enterprises It does not provide funding to

Financing and also to existing companies for companies but increase the liquidity of
expansion and diversification. securities.
Buying and
Company and Investors Investors
selling between
Intermediary Underwriters Brokers
Fluctuates, depends on the demand

Price Fixed price
and supply force
Organizational Not rooted to any specific spot or

It has physical existence.
difference geographical location.
2.6 Analyze the difference between primary and secondary market (Definition, type of product,
purchase type, frequency of selling, parties involved, intermediary, purpose, price).
Basis of
Primary Market Secondary Market
Comparison
A platform that offers security for The market where investor’s trade
Definition the first time is the primary already issued securities is known as
market. the secondary market.
Many products are available such as

Products are limited, and mainly
Type of product shares, warrants, derivatives and
include IPO.
more.
All the purchases in this market The issuer (company raising capital)
Purchase type
happen directly. is not involved in the trading.
Frequency of Security can be sold to the Here the traders can buy and sell the
selling investors just once in this market. shares as many times they want.
Company and the investors are

Here investors buy and sell the
Parties involved involved in buying and selling the
securities among themselves.
security.
Underwriters are the

Here the intermediaries are the
Intermediary intermediaries in the primary
brokers.
market.
Help new and existing companies

Purpose to raise capital for expansion Increase the liquidity of securities.
and diversification.
Both buy and sell-side investors work

The company sells the shares to
Price towards finding the best price for the
the investors at a fixed price.
trade.
2.7 Describe the primary and secondary markets, and explain why secondary markets are so
important to businesses.
PRIMARY MARKET SECONDARY MARKET
Secondary markets provide the aftermarket for

Primary markets are markets in
securities previously issued.
Definition which new securities are sold
for the first time.
Not all securities have secondary markets.
Secondary markets are important because they

enable investors to convert securities easily to cash.
Business firms whose securities are traded in

Important
secondary markets are able to issue securities at a
lower cost than they otherwise could because
investors are willing to pay a premium price for
securities that have secondary markets.
2.8 Analyze the difference between Money Market and Capital Market (Nature of market,
financial instruments, risk factor, liquidity, purpose, time horizon, function, merits, return
on investment).
BASIS FOR
MONEY MARKET CAPITAL MARKET
COMPARISON
Nature of Market Informal Formal
Treasury Bills, Commercial Papers, Shares, Debentures, Bonds, Retained

Financial
Certificate of Deposit, Trade Credit Earnings, Asset Securitization, Euro
instruments
etc. Issues etc.
Risk Factor Low Comparatively High
Liquidity High Low
To fulfil short term credit needs of the To fulfil long term credit needs of the
Purpose
business. business.
Time Horizon Within a year More than a year

BASIS FOR
MONEY MARKET CAPITAL MARKET
COMPARISON
Increases liquidity of funds in the

Function / Merit Mobilization of Savings in the economy.
economy.
Return on
Less Comparatively High
Investment
2.9 Characteristics of financial market

• It channels funds from lenders-savers to borrowers-spenders.
• Financial markets improve economic welfare because they allow consumers to time their purchase
better.
• Increasing the amount of information available to investors helps to reduce the problems of adverse
selection and moral hazard in the financial markets.
2.10 Types of debt
• Short-term debt: the maturity of a debt instrument is less than one year
• Intermediate-term debt: 1-10 years
• Long-term debt: the maturity of a debt instrument is ten years or longer
2.11 Secondary market
• A financial market in which previously issued securities can be resold is called a secondary market
• Example: IPO market is not a secondary market
• An important function of secondary markets is to make it easier to sell financial instruments to raise
funds.
• Secondary markets make financial instruments more liquid.
2.12 Liquid assets
• A liquid asset is an asset that can easily and quickly be sold to raise cash.
• Securities are assets for the person who buys them, but are liabilities for the individual or firm that
issues them.
2.13 Money market vs Capital market
• A financial market in which only short-term debt instruments are traded is called the money market.
• Equity instruments are traded in the capital market.
• A debt instrument sold by a bank to its depositors that pays annual interest of a given amount and
at maturity pays back the original purchase price is called a negotiable certificate of deposit
(“Chứng chỉ tiền gửi chuyển nhượng).
• A short-term debt instrument issued by well-known corporations are traded in a capital market is
called commercial paper (thương phiếu).
• Repurchase agreements are short-term loans in which Treasury bills serve as collateral.
• Federal funds (Quỹ liên bang) are loans made by banks to each other.
• A repurchase agreement.is short-term financial instrument.
• U.S. Treasury bills; Commercial paper are traded in a money market.
• Equity and debt instruments with maturities greater than one year are called capital market
instruments.
• U.S. Treasury bond is a long-term financial instrument.
• U.S. Government agency securities are traded in a capital market.
2.14 Bonds
• Bonds issued by state and local governments are called municipal bonds (trái phiếu đô thị).
2.15 Equity and debt
• They can both be long-term financial instruments
• They both involve a claim on the issuerʹs income
• They both enable a corporation to raise funds
2.16 Direct finance vs Indirect finance
• Direct finance: You borrow $2500 from a friend
• Indirect finance: A corporation issues new shares of stock; You make a deposit at a bank; You buy
shares in a mutual fund
Chapter 3: The Stock Market, the Theory of Rational Expectations, and the Efficient Market
Hypothesis
3.1 Stockholder
- A stockholderʹs ownership of a companyʹs stock gives her the right to vote and be the residual
claimant of all cash flows.
- Stockholders are residual claimants, meaning that they receive the remaining cash flow after all
other claims are paid.
3.2 Dividends
- Periodic payments of net earnings to shareholders are known as dividends.
3.3 The value of any investment
- The value of any investment is found by computing the present value of all future cash flows.
3.4 Gordon Growth Model
- One of the assumptions of the Gordon Growth Model is that dividends will continue growing at a
constant rate.
- Using the Gordon growth model, a stockʹs price will increase if the dividend growth rate increases.
- Using the Gordon growth formula, if D1 is $2.00, ke is 12% or 0.12, and g is 10% or 0.10, then the
current stock price is $100.
- A monetary expansion increases stock prices due to a decrease in the required rate of return and
an increase in the dividend growth rate, everything else held constant.
- The subprime financial crisis led to a decline in stock prices because of a lowered expected
dividend growth rate.
3.5 One-period valuation model
- In the one-period valuation model, the current stock price increases if the expected sales price
increases.
- In the one-period valuation model, an increase in the required return on investments in equity
reduces the current price of a stock.
- Using the one-period valuation model, assuming a year-end dividend of $0.11, an expected sales
price of $110, and a required rate of return of 10%, the current price of the stock would be $100.10.
3.6 Generalized dividend model
- In the generalized dividend model, if the expected sales price is in the distant future, it does not
affect the current stock price.
- In the generalized dividend model, future sales price far in the future does not affect the current
stock price because the present value is almost zero.
3.7 Rational expectation
- The view that expectations change relatively slowly over time in response to new information is
known in economics as adaptive expectations.
- If expectations of the future inflation rate are formed solely on the basis of a weighted average of
past inflation rates, then economics would say that expectation formation is adaptive.
- In rational expectations theory, the term ʺoptimal forecastʺ is essentially synonymous with the best
guess.
- Rational expectations forecast errors will on average be zero and therefore cannot be predicted
ahead of time.
3.8 Efficient markets hypothesis
- The theory of rational expectations, when applied to financial markets, is known as the efficient
market’s hypothesis.
- According to the efficient market’s hypothesis, the current price of a financial security fully reflects
all available relevant information.
- You read a story in the newspaper announcing the proposed merger of Dell Computer and
Gateway. The merger is expected to greatly increase Gatewayʹs profitability. If you decide to invest
in Gateway stock, you can expect to earn a normal return since stock prices adjust to reflect
expected changes in profitability almost immediately.
Chapter 4 - Understanding Interest Rate
A. Lý thuyết
4.1 The time value of money
1) The concept of present value is based on the common-sense notion that a dollar paid to you in the
future is less valuable to you than a dollar today.
2) Interest rates or rates of return on investments that have been adjusted for the effects of inflation
are called real rates.
3) The real interest rate more accurately reflects the true cost of borrowing.
4) If the nominal rate of interest is 2 percent, and the expected inflation rate is -10 percent, the real
rate of interest is 12%.
5) With an interest rate of 6 percent, the present value of $100 next year is approximately $106.
6) If $22,050 is the amount payable in two years for a $20,000 simple loan made today, the interest
rate is 5%.
4.2 Loans
• A credit market instrument that provides the borrower with an amount of funds that must be
repaid at the maturity date along with an interest payment is known as a simple loan.
• A credit market instrument that requires the borrower to make the same payment every period
until the maturity date is known as a fixed-payment loan.
• A credit market instrument that pays the owner a fixed coupon payment every year until the
maturity date and then repays the face value is called a coupon bond.
4.3 Bonds
7) A credit market instrument that pays the owner a fixed coupon payment every year until the maturity
date and then repays the face value is called a coupon bond.
8) The face value is the final amount that will be paid to the holder of a coupon bond.
9) A bond with both a face value and a market value of $1,000 is called a par value bond.
10) If a bond is paying interest semi-annually, then interest is paid every six months.
11) The rate of return is defined as the payments to the owner plus the change in a security’s value
expressed as a fraction of the security’s purchase price.
12) A bond that is bought at a price below its face value and the face value is repaid at a maturity date
is called a discount bond.
13) A coupon bond pays the owner a fixed coupon payment every year until the maturity date, when
the face value is repaid.
14) Which of the following are true for a coupon bond? => When the coupon bond is priced at its face
value, the yield to maturity equals the coupon rate.
15) The price of a coupon bond and the yield to maturity are negatively related; that is, as the yield to
maturity rises, the price of the bond falls.
16) The yield to maturity is greater than the coupon rate when the bond price is below its face value.
17) The relationship between interest rates and bond prices:
➢ There is an inverse relationship between bond prices and interest rates.
➢ The price of long-term bonds fluctuates more than the price of short-term bonds for a given
change in interest rates. (Assuming that the coupon rate is the same for both)
• The term structure of interest rates can be described as the relationship between spot interest rates
and maturity of a bond.
• Interest rate risk increases with increases in time to maturity and decreases in coupon rates.
• All else constant, a bond will sell at a discount when the yield to maturity is higher than the coupon
rate.
4.4 Consols
• A coupon bond that has no maturity date and no repayment of principal is called a consol.
B. Bài tập tính toán
4.5 Dạng bài xác định trái tức
1) A 5-year treasury bond with a coupon rate of 8% has a face value of $1000. The semi-annual
interest payment will be $40.
2) If a $5,000 coupon bond has a coupon rate of 13 percent, then the coupon payment every year is
$650.
3) A bond with a 5 percent coupon that pays interest semiannually and is priced at par will have a
market price of $1,000 and interest payments in the amount of $25 each.
4.6 Dạng bài tính giá hiện tại của trái phiếu
1) A government bond issued in Germany has a coupon rate of 5%, face value of euros 100 and
maturing in five years. The interest payments are made annually. Calculate the price of the bond
(in euros) if the yield to maturity is 3.5%. (=> 106.77 euros)
2) A 3-year bond with 10% coupon rate and $1000 face value yields 8% APR. Assuming annual
coupon payment, calculate the price of the bond. (=> $1051.54)
3) A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the
bond is 10%, calculate the price of the bond assuming that the bond makes semi-annual coupon
interest payments. (=> $949.24)
4.7 Dạng bài tính tỷ suất sinh lợi đến ngày đáo hạn (Yield-to-maturity) của trái phiếu
1) A four-year bond has an 8% coupon rate and a face value of $1000. If the current price of the bond
is $878.31, calculate the yield to maturity of the bond (assuming annual interest payments). (=>
12%)
2) A 5-year bond with 10% coupon rate and $1000 face value is selling for $1123. Calculate the yield
to maturity on the bond assuming annual interest payments. (=> 7.0%)
3) If a security pays $110 next year and $121 the year after that, what is its yield to maturity if it sells
for $200? (=> 10%)
4) If a $10,000 face-value discount bond maturing in one year is selling for $5,000, then its yield to
maturity is (=> 100%)
5) A government bond issued in Germany has a coupon rate of 5%, face value of euros 100 and
maturing in five years. The interest payments are made annually. Calculate the yield to maturity of
the bond (in euros) if the price of the bond is 106 euros. (=> 3.66%)
6) What is the rate of return on a 5 percent coupon bond that initially sells for $1,000 and sells for
$1,200 next year? (=> 25%)
7) What is the return on a 5 percent coupon bond that initially sells for $1,000 and sells for $900 next
year? (=> -5%)
4.8 Dạng bài tập tổng hợp về Trái phiếu
BT1:
a) Find the price of a 10% coupon bond with a face value of $1000, a 12% yield to
maturity, and 8 years to maturity.
b) Find the price of a 10% coupon bond with a face value of $1000, a 9% yield to
c) Find the price of a 10% coupon bond with a face value of $1000, a 10% yield to
Give a conclusion about the relation between price of coupon bond and yield to maturity.
BT2:
Given a 7.5% coupon bond with a face value of $1000, 5 years to maturity.
a. Calculate the price of bond if yield to maturity changes in 3 cases: (1) 6%; (2) 10% and (3) 7.5%.
b. Give a conclusion about the relation between price of coupon bond and yield to maturity.
BT3:
In February 2012 you purchase a three-year U.S. government bond. The bond has an
annual coupon rate of 11.25%, paid semiannually. If investors demand a 0.085% semiannual return, what
is the price of the bond?
BT4:
In February 2009, you purchase a 3-year US Government bond. The bond has an annual coupon rate of
4.875%, paid semi-annually. If investors demand a 3% semiannual return, what is the price of the bond?
(Face value = $1,000).
BT5:
A three-year bond has 8.0% coupon rate and face value of $1000. If the yield to maturity on the bond is
10%, calculate the price of the bond assuming that the bond makes semi-annual coupon interest payments.
BT6:
In July 2010, you purchase 200 Yen of bonds in Japan which pay a 8% coupon rate every year. If the bond
matures in 2015 and the YTM is 4.5%, what is the value of the bond?
BT7:
a. Calculate the rate of return of a $1,000 face value coupon bond with a coupon rate of 10% that is bought
for $1,000, held for one year, and then sold for $ 1,150; duration of this coupon bond is 5 years.
b. Calculate the rate of return of a $ 1,000 face value coupon bond with a coupon rate of 10% that is bought
for $ 1,000, held for one year, and then sold for $ 950; duration of this coupon is 5 years.
BT8:
a. Calculate the rate of return of a $ 1,000 face value coupon bond with a coupon rate of 10% that is bought
for $ 1,000, held for one year, and then sold for $ 800, duration of this coupon is 5 years. (0.5 score)
b. Calculate the rate of return of a $1,000 face value coupon bond with a coupon rate of 10% that is bought
for $1,000, held for one year, and then sold for $ 1,105, duration of this coupon bond is 5 years. (0.5
score)
4.9 Dạng bài tập tổng hợp về cổ phiếu
BT1:
You have some extra money to invest for one year. After a year, you will need to sell your investment to
pay tuition. After watching CNBC or Nightly Business Report on TV, you decide that you want to buy Intel
Corp. stock, rate of return is 12%. You call your broker and find that Intel is currently selling for $50 per
share and pays $0.16 per year in dividends. The analyst on CNBC predicts that the stock will be selling for
$60 in one year. Should you buy this stock?
BT2:
You have some extra money to invest for one year. After a year, you will need to sell your investment to
pay tuition. After watching CNBC or Nightly Business Report on TV, you decide that you want to buy Intel
Corp. stock, rate of return is 9%. You call your broker and find that Intel is currently selling for $55 per share
and pays $0.57 per year in dividends. The analyst on CNBC predicts that the stock will be selling for $50
in one year. Should you buy this stock?
BT3:
Imagine that you want to purchase a stock that is selling for $20. The expected dividend next year is $1.75
and analyst forecast the stock price one year from today being $22. According to the capital asset pricing
model the cost of equity is 12%. Using the one-period valuation model. What should the stock be selling
for? Should you purchase it?
BT3:
Imagine that you want to purchase a stock that is selling for $35. The expected dividend next year is $2.73
and analyst forecast the stock price one year from today being $38.5. According to the capital asset pricing
model the cost of equity is 9%. Using the one-period valuation model. What should the stock be selling for?
Should you purchase it?
BT4:
a. If the interest rate is 10%, what is the present value of a security that pay you $1,100 next year, $ 1,210
the year after, and $ 1,331 the year after that?
b. If the security sold for $3,500, is the yield to maturity greater or less than 10%? Why?
BT5:
World-Tour Co. has just now paid a dividend of $3 per share; the dividends are expected to grow at a
constant rate of 8% per year forever. If the required rate of return on the stock is 12%, what is the current
value on stock, after paying the dividend?
BT6:
A lottery claims their grand price is $198.25 million, payable over 5 years at $39.65 million per year. If the
first payment is made immediately, what is this grand prize really worth? Use an interest rate of 9%.
BT7:
Fledgling Electronics is forecasted to pay a $5.00 dividend at the end of year one; a $5.50 dividend at the
end of year two; a $6.5 dividend at the end of year three. At the end of the third year the stock will be sold
for $238. If the discount rate is 10%, what is the price of the stock?
BT8:
Fledgling Electronics is forecasted to pay a $5.00 dividend at the end of year one; a $5.50 dividend at the
end of year two; a $6.5 dividend at the end of year three. At the end of the third year the stock will be sold
for $238. If the discount rate is 10%, what is the price of the stock.
4.10 Dạng bài tập về Giá trị hiện tại – Giá trị tương lai của dòng tiền đầu kỳ, cuối kỳ
BT1:
Assume that you just hit the $30 million Jackpot in the New York Lottery, which promises you a payment of
$7.5 million for the next four years. You are clearly excited, but have you really won $30 million? (if interest
rate is 8.5%)
BT2:
You decide to purchase a new home and need a $ 150,000 mortgage. You take out a loan from the bank
that has an interest rate of 8.5%. What is the yearly payment to the bank to pay off the loan in twenty-five
years?
BT3:
You decide to purchase a new home and need a $ 2,500,000 mortgage. You take out a loan from the bank
that has an interest rate of 8.5%. What is the yearly payment to the bank to pay off the loan in twenty years?
BT4:
The state lottery advertises a jackpot prize of $30 million, paid in 4 equal installments over 4 years, at the
end of each year. If interest rates are 8.5% what is the true value of the lottery prize?
BT5:
The state lottery advertises a jackpot prize of $295.7 million, paid in 25 equal installments over 25 years,
at the end of each year. If interest rates are 5.9% what is the true value of the lottery prize?
BT6:
A lottery claims their grand price is $50 million, payable over 8 years at $6.25 million per year. If the first
payment is made immediately, what is this grand prize really worth? Use an interest rate of 9%.
Chapter 5 – Goals and governance of the firm
Chiến lược làm bài tổng quát:
- Nhận dạng từ khóa
- Loại trừ đáp án sai từ trên xuống dưới
- Target: Làm 1 câu trong vòng 20 giây
5.1 Finance / Financial market:
1. Finance, generally, deals with: I) Money; II) Markets; III) People.
2. Functions of financial markets: I) Source of financing; II) Provide liquidity; III) Reduce risk; IV) Source
of information.
5.2 Organizational structure of a corporation:
1. Generally, a corporation is owned by the shareholders.
2. Shareholders of a corporation could be: I) Individuals; II) Pension Funds; III) Insurance Companies.
3. Corporations, potentially, have infinite life because of the separation of ownership and management.
Limited liability is an important feature of corporations.
4. Organizational structure of a corporation: The chief executive officer (CEO), chief financial officer (CFO)
report to the board of directors.
5. Managers' actions are monitored by the board of directors, Commercial banks that have loaned funds
to the firm, The Wall Street analysts.
6. Common function of the firm's chief financial officer (CFO): Hiring controller, hiring treasurer, investing
capital, paying dividends. The Chief Financial Officer (CFO) of a corporation oversees: Treasurer's
functions & Controller's functions.
7. The treasurer and the controller of a corporation generally report to the CFO. The key difference
between the duties of the controller and those of the treasurer is the separation of cash control from
accounting records.
8. Treasurer: directly responsible for financial planning and capital expenditures. The treasurer is usually
responsible the following functions of a corporation: Investor relationships, Cash management, raising
new capital.
9. Controller usually oversees the following functions of a corporation: Preparation of financial statements,
Internal accounting, Taxes.
10. Articles of incorporation is a corporate document that sets forth the intended life of the firm. The articles
of incorporation set forth the number of shares of stock that can be issued. The articles of incorporation
establish the rights of the shareholders.
5.3 Sole proprietorship:
1. Sole proprietorship is the easiest type of business to form. Sole proprietorships are limited to the
business owner's life. The owner of a sole proprietorship may be forced to sell his/her personal assets
to pay company debts.
5.4 Limited partnership vs General partnership:
1. A limited partnership generally permits limited partners to sell their ownership interest without the
partnership terminating. In a limited partnership, each limited partner's liability is limited to the amount
he/she invested.
2. The primary advantage of being a limited partner rather than a general partner is liability for firm debts
limited to the capital invested. A general partner has more management responsibility than a limited
partner.
3. The division of profits and losses among the members of a partnership is formalized in the partnership
agreement.
4. Disadvantages of a general partnership:
• Limited life of the firm
• Personal liability for firm debt
• Lack of ability to transfer partnership interest
5.5 Goals of the firm:
1. The financial goal of a corporation is to: Maximize value of the corporation to the stockholders.
2. The primary goal of financial management is to maximize the current value per share of the existing
stock.
5.6 Agency problems:
1. Agency problem refers to a conflict of interest between the stockholders and managers of a corporation.
Conflicts of interest between shareholders and managers of a firm result in: Principal-agent problem,
Increased agency costs, Managers owning the firm.
2. Agency costs refer to the costs of any conflicts of interest between stockholders and management.
Agency costs: Costs associated with the conflicts of interest between the bondholders and the
shareholders of a corporation.
3. Agency costs are incurred by a corporation because:
• managers may not attempt to maximize the value of the firm to shareholders
• shareholders incur monitoring cost
• separation of ownership and management
4. If the corporation is not performing well, shareholders can:
• Replace the board of directors in an election
• Force the board of directors to change the management team
• Sell their shares of stock in the corporation
5.7 Real assets vs financial assets:
1. Real assets: Machinery, Office buildings, Warehouse.
2. Financial assets: Common stock, Bank loan, Preferred stock.
5.8 Investing decisions vs Financing decisions:
1. Investment decision / capital budgeting decision: The purchase of real assets; Deciding whether or not
to open a new store. A firm's investment decision is also called the capital budgeting decision – The
process of planning and managing a firm's long-term investments.
2. Financing decision: The sale of financial assets.
5.9 Tangible assets vs Intangible assets:
1. Tangible assets: Machinery; Office buildings; Warehouse; Factories; Offices.
2. Intangible assets: Trademarks; Patents; Technical expertise.
5.10 Capital structure:
1. Capital structure refers to decisions related to long-term debt and equity financing.
2. The mixture of debt and equity, used to finance a corporation is also known as Capital structure.
5.11 Stakeholders:
1. A stakeholder is any person or entity other than a stockholder or creditor who potentially has a claim
on the cash flows of a firm. Example: Employee, Customer; Community; Supplier.
2. The following groups are some of the claimants to a firm's income stream: I) Shareholders; II)
Bondholders; III) Employees; IV) Management and V) Government.
Chapter 6 – How to calculate present value?
Chiến lược làm bài tổng quát
- Phân tích đề thuộc dạng nào
- Viết công thức ra nháp + Áp dụng công thức chính xác
- Làm bài chỉ cần bước thế số và ra đáp án.
- Dùng dấu “,” cho phần ngàn, dấu “.” cho phần thập phân.
- Làm tròn 2 số sau phần thập phân
- Target: Làm 1 câu trong vòng 20 giây
6.1 LÝ THUYẾT:
1. Present Value is defined as future cash flows discounted to the present at an appropriate discount
rate
2. If the present value of the cash flow X is $240, and the present value cash flow Y $160, then the
present value of the combined cash flow is:
 $400
3. The rate of return is also called: I) discount rate; II) hurdle rate; III) opportunity cost of capital.
4. The present value formula for one period cash flow is: PV = C1/(1 + r)
5. An annuity is defined as equal cash flows at equal intervals of time for a specified period of time
6. Example of annuity: If you receive $1,000 payment at the end each year for the next five years
7. You are considering investing in a retirement fund that requires you to deposit $5,000 per year, and
you want to know how much the fund will be worth when you retire. What financial technique should
you use to calculate this value?
 Future value of an annuity
8. According to the net present value rule, an investment in a project should be made if the Net present
value is positive.
9. NPV rule and the rate of return rule: Accept a project if its NPV > 0, Reject a project if the NPV <
0, Accept a project if its rate of return > opportunity cost of capital
10. The net present value formula for one period is: NPV = C0 + [C1/(1 + r)]; NPV = PV required
investment.
11. The managers of a firm can maximize stockholder wealth by:
 Taking all projects with positive NPVs
12. A perpetuity is defined as Equal cash flows at equal intervals of time forever. Example: consols
13. The concept of compound interest is most appropriately described as: Interest earned on interest
14. The opportunity cost of capital for a risky project is the expected rate of return on a portfolio of
securities of similar risks as the project
6.2 Dạng bài “Single payment cashflow” – Chỉ có 𝑪𝟎 và 𝑪𝒏
Chến lược làm bài:
- Nhận dạng câu hỏi có cụm “The present value + of + FUTURE VALUE”
- Dùng công thức:
𝐶𝑛
𝑃𝑉 =
(1 + 𝑟)𝑛
𝐶𝑛
𝑃𝑉 =
𝑟 𝑛×𝑚
(1 + )
𝑚
1. What is the present value of $1,000 expected in two years from today at a discount rate of 8%?
2. What is the present value of $121,000 expected to be received one year from today at an interest rate
(discount rate) of 10% per year?
3. What is the present value of $100,000 expected to be received at the end of one year at a discount
rate of 25% per year?
4. Find the future value of an investment of $100,000 made today for five years and paying 12% percent
for the following compounding periods:
a) Quarterly
b) Monthly
c) Daily
5. Ms. Nhu is looking to invest some money, so that she has $55,000 at the end of three years. Which
investment should she make given the following choices:
a) 8.2% compounded daily
b) 8.9% compounded monthly
c) 9.2% compounded quarterly
6. Find the future value of an investment of $22,500 made today for the following rates and periods:
a) 6.25% compounded semiannually for 12 years
b) 7.63% compounded quarterly for 6 years
c) 8.9% compounded monthly for 10 years
d) 10% compounded daily for 3 years
7. Ms. Nhu needs to decide whether to accept a bonus of $1,820 today or wait two years and receive
$2,100 then. She can invest at 16 percent. What should she do?
8. Ms. Nhu saves $70,250 and she needs some money at the end of five years. Which investment should
she make given the following choices:
a) 16.25% compounded quarterly
b) 16.5% compounded semi-annually
9. You have won a prize of 52 million VNĐ to be paid exactly after 3 years. You were offered 45 million
VNĐ today as a consideration for his agreement to sell the right to receive the prize. The market interest
rate is 12% and the interest is compounded on quarterly basis. Whether the offer should be accepted
or not?
6.3 Dạng bài “Multiple payment cashflows” – Có 𝑪𝟎 , 𝑪𝟏 , 𝑪𝟐 , …., 𝑪𝒏
Chiến lược làm bài:
- Nhận dạng câu hỏi có following cash flows (dòng tiền cho từng năm)
𝐶1 𝐶2 𝐶𝑛
𝑃𝑉 = 1
+ 2
+ ⋯+
(1 + 𝑟) (1 + 𝑟) (1 + 𝑟)𝑛
𝐹𝑉𝑛 = 𝐶0 × (1 + 𝑟)𝑛 + 𝐶1 × (1 + 𝑟)𝑛−1 + ⋯ + 𝐶𝑛−1 × (1 + 𝑟) + 𝐶𝑛
1. What is the present value of the following cash flow at a discount rate of 12%?
Year -1 Year - 2 Year - 3
$100,000 $150,000 $200,000
2. At an interest rate of 10%, which of the following cash flows has highest present value?
Option Year 1 Year 2 Year 3
A 500 300 100
B 100 300 500
C 300 300 300
3. What is the present value of the following cash flow at a discount rate of 9%?
Year 1 2
CF ($) -100,000 300,000
4. A project is expected to produce cash flows of $6,000, $8,000, and $9,000 over the next three years,
respectively. After three years, the project will be discontinued. What is this project worth today at a
discount rate of 20 percent?
5. What is the future value of the following cash flow at the end of five years with the discount rate of 10%?
Year 0 1 2 3 4 5
CF $250,000 0 $120,000 $80,000 $50,000 $25,000
6.4 Dạng bài “Net present value”:
- Nhận dạng câu hỏi có kêu tính NPV của dự án.
- Vận dụng NPV rule: chấp nhận dự án khi NPV > 0, từ chối dự án khi NPV âm.
𝐶1 𝐶2 𝐶𝑛
𝑁𝑃𝑉 = 𝐶0 + 1
+ 2
+ ⋯+
(1 + 𝑟) (1 + 𝑟) (1 + 𝑟)𝑛
(𝐶𝑜 < 0)
1. An initial investment of $400,000 will produce an end of year cash flow of $480,000. What is the NPV
of the project at a discount rate of 20%?
2. If the present value of a cash flow generated by an initial investment of $200,000 is $250,000. What is
the NPV of the project?
3. What is the net present value of the following cash flow at a discount rate of 11%?
Year 0 1 2
CF ($) -120,000 300,000 -100,000
respectively. After three years, the project will be discontinued. What is the Net Present Value of project
at a discount rate of 15 percent if initial investment cost is $25,000?
respectively. After three years, the project will be discontinued. What is the Net Present Value of project
at a discount rate of 15 percent if initial investment cost is $15,000?
6. Vinamilk wants to purchase an equipment for $320,000. It will produce the following net cash flows:
Year Net Cash Flows
1 $130,000
2 280,000
3 110,000
Assume that the cost of capital is 10%. What is the net present value?
7. What is the net present value (NPV) of the following cash flows at a discount rate of 9%?
Year 0 1 2 3
CF ($) -250,000 100,000 150,000 200,000
8. A project requires an initial investment of $21,600 and will produce cash inflows of $4,900, $14,200,
and $8,700 over the next three years, respectively. What is the project's NPV at a required return of 14
percent? The project will be accepted or not? Why?
Year 0 1 2 3 4 5
CF ($150,000) $50,000 $30,000 $75,000 $10,000 ($75,000)
10. VinGroup wants to purchase an equipment for $420,000. It will produce the following net cash flows:
Year Net Cash Flows ($)
1 160,000
2 -260,000
3 200,000
4 210,000
Assume that the cost of capital is 10%. What is the net present value? Should VinGroup accept this
project? Why?
Year 0 1 2 3 4 5
CF -120,000 35,000 35,000 35,000 35,000 -10,000
6.5 Dạng bài “Annuity”
- Nhận dạng câu hỏi có từ “annuity”: đều hàng năm, xác định được số năm đều
- 1 số ví dụ khác về annuity:
• Sau khi về hưu, mỗi năm sẽ nhận 75,000$ trong vòng 25 năm.
• Mỗi năm trả nợ với 1 khoản tiền bằng nhau, trong vòng 20 năm.
• Mỗi năm đóng tiền học là 12,500$ trong vòng 6 năm.
• Cho thuê xe trong vòng 5 năm, mỗi tháng nhận được $250.
• Nhà máy hoạt động tạo ra dòng tiền đều $150,000 mỗi năm, trong vòng 8 năm.
- Lưu ý: Dòng tiền đều bắt đầu phát sinh từ lúc nào. Nếu là cuối năm 1 thì dùng công thức tính
PV bình thường. Nếu là đầu năm 1 (today) thì dùng công thức là đang tính C(-1), rồi nhân lại
cho (1+r) để ra PV.
1 − (1 + 𝑟)−𝑛
𝑃𝑉 = 𝐶 × [ ]
𝑟
(1 + 𝑟)𝑛 − 1
𝐹𝑉 = 𝐶 × [ ]
𝑟
1. What is the present value of $1000 per year annuity for five years at an interest rate of 12%?
2. What is the present value of $1000 per year annuity at a discount rate of 12% for 8 years?
3. What is the present value of $5000 per year annuity at a discount rate of 10% for 6 years?
4. After retirement, you expect to live for 25 years. You would like to have $75,000 income each year.
How much should you have saved in the retirement to receive this income, if the interest is 9% per year
(assume that the payments start one year after the retirement)?
5. After retirement, you expect to live for 25 years. You would like to have $75,000 income each year.
How much should you have saved in the retirement to receive this income, if the interest is 9% per year
(assume that the payments start on the day of retirement)?
6. Mr. Trump is expected to retire in 25 years and he wishes accumulate $750,000 in his retirement fund
by that time. If the interest rate is 10% per year, how much should Mr. Trump put into the retirement
fund each year in order to achieve this goal? Assume that the payments are made at the end of each
year.
7. After retirement, you expect to live for 20 years. You would like to have $7,000 income each year. How
much should you have saved in the retirement to receive this income, if the interest is 10% per year
(assume that the payments start on the day of retirement)?
8. After retirement, you would like to have $80,000 income each year for 20 years. How much should you
have saved in the retirement to receive this income, if the interest is 3.0% per year (Assume that the
payments start one year after the retirement)
9. Mr. Trump is expected to retire in 30 years and he wishes accumulate $1,000,000 in his retirement
fund by that time. If the interest rate is 12% per year, how much should Mr. Trump put into the
retirement fund each year in order to achieve this goal?
10. Mr. Trump expects to retire in 30 years and would like to accumulate $1 million in the pension fund. If
the annual interest rate is 12% per year, how much should Mr. Trump put into the pension fund each
month in order to achieve his goal? Assume that Mr. Trump will deposit the same amount each month
into his pension fund and also use monthly compounding.
11. You have to pay $12,500 a year in school fees at the end of each of the next six years. If the interest
rate is 8%, how much do you need to set aside today to cover these bills? You have invested $70,476
at 8%. After paying the above school fees, how much would remain at the end of the six years?
12. Mr. Sugar has taken a $250,000 mortgage on his house at an interest rate of 6% per year. If the
mortgage calls for twenty equal annual payments, what is the amount of each payment?
13. Ms. Trang has just taken out a $150,000 mortgage at an interest rate of 6% per year. If the mortgage
calls for equal monthly payments for twenty years, what is the amount of each payment? (Assume
monthly compounding or discounting.)
14. You borrow $150,000 to buy a house. The mortgage rate is 8.5 percent and the loan period is 30 years.
Payments are made monthly. If you pay for the house according to the loan agreement, how much total
interest will you pay?
15. The discount rate is 10 percent for five years, compounded quarterly. What is the difference in the
present value of these two sets of the following payments?
Case 1: you receive $200 on the first of each quarter.
Case 2: you receive $200 on the last day of each quarter.
16. You agree to lease a car for 5 years at $250 per month. You are not required to pay any money up
front or at the end of your agreement. If your opportunity cost of capital is 0.3% per month, what is the
cost of the lease?
17. A factory costs $750,000. You reckon that it will produce an inflow after operating costs of $150,000 a
year for 8 years. If the opportunity cost of capital is 14%, what is the net present value of the factory?
What will the factory be worth at the end of five years?
18. I order to save money for travelling to Europe, I have to deposit 30 million VNĐ at the end of each year,
during 3 years. Help me to calculate the total money I get in my account at the end of year 3, if the
interest rate is 8%, compounding semi-annually?
19. Khanh is planning for retirement. He expects to retire 28 years from now, at which time he wishes to
have accumulated $2,500,000 in his retirement fund (money at that time). If the interest rate is 3% per
year, how much should Khanh put into his retirement fund at the end of each year in order to achieve
his goal?
6.6 Dạng bài “Perpetuity”
- Nhận dạng câu hỏi có từ “perpetuity”
- 1 số ví dụ khác về perpetuity:
• Sau khi về hưu, mỗi năm sẽ nhận 80,000$ cho đến vĩnh viễn.
• Trong thực tế, trái phiếu consols của Anh, là có trả trái tức (coupon) đều cho đến vĩnh
viễn.
- Lưu ý: Dòng tiền đều vĩnh viên bắt đầu phát sinh từ lúc nào. Nếu là cuối năm 1 thì dùng công
thức tính C0 bình thường. Nếu là đầu năm 1 (today) thì dùng công thức là đang tính C(-1), rồi
nhân lại cho (1+r) để ra C0. Nếu là cuối năm 4 thì dung công thức để tính C3, rồi chiết khấu 3
năm về để tính C0.
𝐶1
𝐶0 =
𝑟
1. What is the present value of $10,000 per year perpetuity at an interest rate of 10%?
2. You would like to have enough money saved to receive $80,000 per year perpetuity after retirement so
that you and your family can lead a good life. How much would you need to save in your retirement
fund to achieve this goal (assume that the perpetuity payments start one year from the date of your
retirement. The interest rate is 8%)?
3. You would like to have enough money saved to receive $100,000 per year perpetuity after retirement
so that you and your family can lead a good life. How much would you need to save in your retirement
fund to achieve this goal (assume that the perpetuity payments start one year from the date of your
retirement. The interest rate is 12.5%)?
4. You would like to have enough money saved to receive a $50,000 per year perpetuity after retirement
fund to achieve this goal (assume that the perpetuity payments start on the day of retirement. The
interest rate is 8%)?
5. You would like to have enough money saved to receive an $80,000 per year perpetuity after retirement
fund to achieve this goal (assume that the perpetuity payments start on the day of retirement. The
interest rate is 10%)?
6. What is the present value of cash flows of $5,000 start at the end of year 4 in perpetuity? Assuming a
rate of return of 10%?
7. Calculate the present value of cash flows of $9,500 start at the end of year 5 in perpetuity. Assuming a
rate of return of 8.25%?
6.7 Dạng bài “Growth Annuity”
- Nhận dạng câu hỏi có từ “growing annuity”
- 1 số ví dụ khác về growing annuity:
• Sau khi về hưu, năm đầu nhận đc 60,000$, các năm sau mỗi năm số tiền nhận được
tăng trưởng với tốc độ g = 4%, nhận tiền như vậy trong vòng 25 năm.
𝐶1 1+𝑔 𝑛
𝐶0 = × [1 − ( ) ]
𝑟−𝑔 1+𝑟
1. You would like to have enough money saved to receive a growing annuity for 25 years, growing at a
rate of 4% per year, the first payment being $60,000 after retirement, so that you and your family can
lead a good life. How much would you need to save in your retirement fund to achieve this goal?
(Assume that the growing annuity payments start one year from the date of your retirement. The interest
rate is 12%)?
2. You would like to have enough money saved to receive a growing annuity for 20 years, growing at a
rate of 5% per year, the first payment being $50,000 after retirement. That way, you hope that you and
your family can lead a good life after retirement. How much would you need to save in your retirement
fund to achieve this goal. (Assume that the growing annuity payments start one year from the date of
your retirement. The interest rate is 10%)?
6.8 Dạng bài “Growth Perpetuity”
- Nhận dạng câu hỏi có từ “perpetuity” và có cho growth rate (g%)
- 1 số ví dụ khác về growing perpetuity:
• Cuối năm 1 nhận đc 1,000$, cuối các năm kế tiếp nhận được số tiền tăng trưởng với
tốc độ tăng trưởng g%, cho đến vĩnh viễn.
• Cuối năm 4 nhận được 5,000$, cuối năm thứ 5 cho đến vĩnh viễn, mỗi năm số tiền nhận
được tăng trưởng với tốc độ g%.
- Lưu ý: Phải xác định được dòng tiền đầu tiên phát sinh tại thời điểm nào. Nếu tại thời điểm cuối
năm 1 thì dùng công thức tính C0 bình thường. Nếu là đầu năm 1 (today) thì dùng công thức là
đang tính C(-1), rồi nhân lại cho (1+r) để ra C0. Nếu là cuối năm 4 thì dùng công thức để tính
C3, rồi chiết khấu 3 năm về để tính C0.
𝐶1
𝐶0 =
𝑟−𝑔
1. What is the present value of cash flows of $5,000 start at the end of year 4 in perpetuity, assuming a
rate of return of 10% and a constant growth rate of 4%?
2. Calculate the present value of cash flows of $9,500 start at the end of year 5 in perpetuity. Assuming a
rate of return of 8.25% and a constant growth rate of 3.5%?
6.9 Dạng bài “Discount Factor”
- Nhận dạng câu hỏi kêu tính cái gì?
1
𝑛 − 𝑦𝑒𝑎𝑟 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑓𝑎𝑐𝑡𝑜𝑟 =
(1 + 𝑟)𝑛
𝑃𝑉 = 𝐹𝑉 × (𝑛 − 𝑦𝑒𝑎𝑟 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑓𝑎𝑐𝑡𝑜𝑟)
1 − (1 + 𝑟)−𝑛
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝐴𝑛𝑛𝑢𝑖𝑡𝑦 𝐹𝑎𝑐𝑡𝑜𝑟 =
𝑟
(1 + 𝑟)𝑛 − 1
𝐹𝑢𝑡𝑢𝑟𝑒 𝑉𝑎𝑙𝑢𝑒 𝐴𝑛𝑛𝑢𝑖𝑡𝑦 𝐹𝑎𝑐𝑡𝑜𝑟 =
𝑟
1. If the interest rate is 12%, what is the 2-year discount factor?
2. One-year discount factor at a discount rate of 25% per year is:
3. The one-year discount factor at an interest rate of 100% per year is:
4. If the one-year discount factor is 0.8333, what is the discount rate (interest rate) per year?
5. If the present value of $480 to be paid at the end of one year is $400, what is the one-year discount
factor?
6. If the present value of $250 expected to be received one year from today is $200, what is the discount
rate?
7. If the one-year discount factor is 0.90, what is the present value of $120 to be received one year from
today?
8. If the present value of $600 expected to be received one year from today is $400, what is the one-year
discount rate?
9. What is the present value annuity factor at a discount rate of 11% for 8 years?
10. What is the present value annuity factor at an interest rate of 9% for 6 years?
11. If the present value annuity factor at 8% APR for 10 years is 6.71, what is the equivalent future value
annuity factor?
6.10 Dạng APR (Annual Percentage Rate)
- Nhận dạng bài cho APR
- Xem kêu tính FV bằng tính lãi suất đơn hay lãi suất kép (lãi chồng lại)
- Nếu apply lãi suất đơn thì:
𝐹𝑉𝑛 = 𝑃𝑉 × (1 + 𝐴𝑃𝑅 × 𝑛)
- Nếu apply lãi suất kép thì:
𝐹𝑉𝑛 = 𝑃𝑉 × (1 + 𝐴𝑃𝑅)𝑛
1. If you invest $100 at 12% APR for three years, how much would you have at the end of 3 years using
simple interest?
2. If you invest $100 at 12% APR for three years, how much would you have at the end of 3 years using
compound interest?
6.11 Dạng EAR
- Nhận dạng bài:
• Cho EAR, kêu tính Nominal rate:
1
𝑁𝑜𝑚𝑖𝑛𝑎𝑙 𝑟𝑎𝑡𝑒 = [(1 + 𝐸𝐴𝑅)𝑚 − 1] × 𝑚
• Cho Nominal rate compounded m, kêu tính EAR:

𝑁𝑜𝑚𝑖𝑛𝑎𝑙 𝑟𝑎𝑡𝑒 𝑚
𝐸𝐴𝑅 = (1 + ) −1
𝑚
• Cho Nominal rate compounded continuously, kêu tính EAR:
𝐸𝐴𝑅 = 𝑒 𝑛𝑜𝑚𝑖𝑛𝑎𝑙 𝑟𝑎𝑡𝑒 − 1
• Cho Nominal rate per m (VD: 1% / tháng), kêu tính APR: Nominal rate × m
1. An investment at 10.47% effective rate compounded monthly is equal to a nominal (annual) rate of:
 Nominal rate = [(1.1047)^(1/12) - 1] * 12 = 0.1 = 10%
2. An investment at 12% nominal rate compounded monthly is equal to an annual rate of:
 12.68%
3. An investment at 10% nominal rate compounded continuously is equal to an equivalent annual rate of:
 (e^(0.1)) - 1 = 0.10517 = 10.517%
4. Given a monthly rate of 1%, what is the Effective Annual Rate (EAR)? What is the Annual Percentage
Rate (APR)?
 EAR = (1+1%)^12 – 1 = 12.68%
 APR = 1%*12 = 12%
Chapter 7 – The value of common stocks and payout policy
LÝ THUYẾT:
1. The market in which new securities are originally sold to investors is called the primary market.
2. The value of a common stock today depends on: The expected future dividends and the discount rate.
3. An agent who arranges security transactions among investors without maintaining an inventory is called
a: broker.
4. The underlying assumption of the dividend growth model is that a stock is worth: the present value of
the future income provided by that stock.
5. If the Wall Street Journal Quotation for a company has the following values close: 55.14; Net chg: = +
1.04; then the closing price for the stock for the previous trading day was?
 $54.10
6. The constant dividend growth formula P0 = Div1/(r - g) assumes:
I) the dividends are growing at a constant rate g forever.
II) r > g
7. Dividend growth rate for a stable firm can be estimated as: Plow back rate * the return on equity (ROE);
8. Firms can pay out cash to their shareholders in the following ways: Dividends and Share repurchases.
9. Dividends are decided by the board of directors.
10. Payment date occurs last in time (when arranged in the chronological order).
11. Lists events in the chronological order from earliest to latest:
Declaration date => ex-dividend date => record date
12. Stock dividend is never in the form of cash.
13. The par value of the outstanding shares is defined as legal capital.
14. According to financial executives' views about dividend policy, we try to avoid reducing the dividend.
15. Generally, investors interpret the announcement of an increase in dividends as good news and the
stock price increases.
16. Generally, investors view the announcement of open-market repurchase of stocks as good news and
the stock price increases.
17. One key assumption of the Miller and Modigliani (MM) dividend irrelevance argument is that new shares
are sold at a fair price.
18. The indifference proposition regarding dividend policy assumes that investors are indifferent about the
timing of dividend payments.
19. One key assumption of the Miller and Modigliani (MM) dividend irrelevance is that capital markets are
efficient.
20. The dividend-irrelevance proposition of Miller and Modigliani: “The investment policy is set before the
dividend decision and not changed by dividend policy” depends on the following relationship between
investment policy and dividend policy.
21. One possible reason that shareholders often insist on higher dividends is they do not trust managers
to spend retained earnings wisely.
22. The rightist position is that the market will reward firms that have high dividend yield.
23. According to behavioral finance investors prefer dividends because investors prefer the discipline that
comes from spending only the dividends.
24. If investors do not like dividends because of the additional taxes that they have to pay, you expect stock
prices to behave on the ex-dividend date will fall by more than the amount of the dividend.
25. If both dividends and capital gains are taxed at the same ordinary income tax rate, the effect of tax is
different because dividends are taxed when distributed while capital gains are deferred until the stock
is sold.
26. If dividends are taxed more heavily than capital gains, the investors should be willing to pay more for
stocks with low dividend yields.
27. If investors have a marginal tax rate of 20% and a firm has announced a dividend of $5, the price of
stock should decrease by $4 on the ex-dividend date.
7.1 Dạng bài tính “Market Capitalization”:

𝑀𝑎𝑟𝑘𝑒𝑡 𝑐𝑎𝑝𝑖𝑡𝑎𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 = 𝑁𝑜 𝑜𝑓 𝑠𝑡𝑜𝑐𝑘𝑠 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 × 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑚𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠𝑡𝑜𝑐𝑘
1. Assume General Electric (GE) has about 10.3 billion shares outstanding and the stock price is $37.10.
Also assume the P/E ratio is about 18.3. Calculate the market capitalization for GE. (Approximately)
7.2 Dạng bài tính “P/E, EPS”:
𝑃𝑟𝑖𝑐𝑒
𝑃/𝐸 =
𝐸𝑃𝑆
1. Company X has a P/E ratio of 10 and a stock price of $50 per share. Calculate earnings per share of
the company.
7.3 Dạng bài tính “dividend payout ratio” vs “plowback ratio”:
- Cho P/E và Price => Tính EPS
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑎𝑦𝑜𝑢𝑡 𝑟𝑎𝑡𝑖𝑜 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
1. The Wall Street Journal quotation for a company has the following values: Div: $1.12, PE: 18.3, Close:
$37.22. Calculate the dividend payout ratio for the company (Approximately).
7.4 Dạng bài tính “Price” của stock:
- Bản chất là đem các dòng cổ tức chiết khấu về hiện tại, và chiết khấu giá cổ phiếu dự
đoán tại năm (n) về hiện tại.
- Lưu ý: Các dòng cổ tức thuộc dạng nào Annuity, Perpetuity, Growth Perpeptuity
𝐷1 𝐷2 𝐷𝑛 + 𝑃𝑛
𝑃0 = + + ⋯+
(1 + 𝑟) (1 + 𝑟)2 (1 + 𝑟)𝑛
1. A company has decided to issue preferred stock with an annual dividend of $4 a share. Similar stocks
are currently yielding 11 percent. What price should the firm expect to receive for each new share
issued?
2. A company’s stockholders expect to receive a year-end dividend of $5 per share and then be sold for
$115 dollars per share. If the required rate of return for the stock is 20%, what is the current value of
the stock?
3. A company expects to pay a dividend of $2 per share at the end of year-1, $3 per share at the end of
year-2 and then be sold for $32 per share. If the required rate on the stock is 15%, what is the current
value of the stock?
4. A company is expected to pay a dividend of $3 per share at the end of year-1 (D1) and these dividends
are expected to grow at a constant rate of 6% per year forever. If the required rate of return on the
stock is 18%, what is current value of the stock today?
5. A company has just now paid a dividend of $2.83 per share (D0); the dividends are expected to grow
at a constant rate of 6% per year forever. If the required rate of return on the stock is 16%, what is the
current value on stock?
6. A company has just paid a dividend of $1 per share. The dividends are expected to grow at 25% per
year for the next three years and at the rate of 5% per year thereafter. If the required rate of return on
the stock is 18%(APR), what is the current value of the stock?
7. A company has just paid a dividend of $0.50 per share. The dividends are expected to grow at 24%
per year for the next two years and at 8% per year thereafter. If the required rate of return in the stock
is 16% (APR), calculate the current value of the stock.
8. A company just announced its next annual dividend will be $1.50 a share with future dividends
increasing by 1.8 percent annually. How much will one share of this stock be worth five years from now
if the required return is 15.5 percent?
9. A company has just paid an annual dividend of $1 a share. The firm plans to increase its dividend by
20 percent a year for the next four years and then decrease the growth rate to 5 percent annually. If
the required rate of return is 10.25 percent, what is one share of this stock worth today?
10. A company last paid a $1.50 per share annual dividend. The company is planning on paying $3, $5,
$7.50, and $10 a share over the next four years, respectively. After that the dividend will be a constant
$2.50 per share per year. What is the current price of this stock if the rate of return is 14 percent?
11. A company is going to pay $1, $2.50, and $5 a share over the next three years, respectively. After that,
the company plans to pay annual dividends of $1.25 per share indefinitely. If your required return is 13
percent, how much are you willing to pay for one share today?
12. A company pays no dividend at the present time. In Years 2 and 3, the firm will pay annual dividends
of $3 a share. After that, it will pay a constant $1 a share dividend indefinitely. What is this stock worth
at a required return of 15 percent?
13. A company last annual dividend was $2 a share. The company plans to lower the dividend by $.50
each year for the next three years. In Year 5, it will pay a final liquidating dividend of $22 a share. If the
required return is 16 percent, what is the current per share value of this stock?
14. A company paid its first annual dividend yesterday in the amount of $.28 a share. The company plans
to double each annual dividend payment for the next three years. After that, it will pay a constant $1.50
per share dividend indefinitely. What is one share of this stock worth today if the market rate of return
on similar securities is 11.5 percent?
15. Last week, A company paid its annual dividend of $1.20 a share. The company has been reducing its
dividends by 6 percent each year. What is one share of stock worth at a required return of 14 percent?
16. A company is expecting a period of intense growth, so it has decided to retain more of its earnings to
help finance that growth. As a result, it is going to reduce its annual dividend by 20 percent a year for
the next three years. After that it will maintain a constant dividend of $1.60 a share. Last year, the
annual dividend was $2.60 a share. What is the market value of this stock if the required rate of return
is 13 percent?
17. A company plans to pay an annual dividend of $.75 next year, increase the dividend by 12 percent for
the following three years, and then increase the dividend by 2 percent annually thereafter. The required
rate of return is 12.5 percent. What is this stock worth per share today?
18. A company has just paid a dividend of $.50 a share. The dividends are expected to increase by 20
percent a year for the next two years and then increase by 3 percent annually thereafter. What is the
current value of a share if the appropriate discount rate is 12 percent?
19. A company just announced its next annual dividend will be $1.50 a share with future dividends
increasing by 1.8 percent annually. How much will one share of this stock be worth five years from now
if the required return is 15.5 percent?
20. A company will pay an annual dividend of $2.10 a share on its common stock next year. Last week, the
company paid a dividend of $2 a share. The company adheres to a constant rate of growth dividend
policy. What will one share of this stock be worth ten years from now if the applicable discount rate is
9 percent?
21. Suppose a company is expected to increase dividends by 20% in one year and by 15% in two years.
After that, dividends will increase at a rate of 5% per year indefinitely. If the last dividend was $1 and
the required return is 20%, what is the price of the stock?
22. A company has just paid a dividend of $3.12 and is expected to grow at a constant rate of 5 percent.
The required rate of return is 23 percent. What is the current price of the stock?
23. A company expects to pay a dividend of $1 per share at the end of year 1; $2 per share at the end of
year 2; and $3 per share at the end of year 3. After three years, the dividends are expected to grow at
a constant rate of 8% per year. If the required rate of return demanded by investors is 12%, what is the
current price of your company stock?
24. You expect your company to pay the following dividend pattern for three years as follows:
D1 = $1.7 D2 = $1.2 D3=$3
a. After three years, you sell your shares for $32 per share. If the required rate of return demanded
by investors is 15%, what is the current price of your company stock?
b. Assume that after three years, you won’t sell your shares and the dividends are expected to grow
at a constant rate of 9% per year. If the required rate of return demanded by investors is 15%, what
is the current price of your company stock?
c. If your stock was selling on the market for $35. Should you hold or sell the stock?
7.5 Dạng bài tính “Rate of return” (r%):
- Ghi Công thức tính Price
- Thường là dùng công thức đặc biệt.
1. A company's stock is selling for $100 per share today. It is expected that this stock will pay a dividend
of 6 dollars per share, and then be sold for $114 per share at the end of one year. Calculate the
expected rate of return for the shareholders.
2. A company just announced that its next annual dividend will be $1.42 a share and that all future
dividends are expected to increase by 2.5 percent annually. What is the market rate of return if this
stock is currently selling for $14.11 a share?
3. A company is expected to pay a dividend of $2 per share at the end of year -1(D1) and the dividends
are expected to grow at a constant rate of 4% forever. If the current price of the stock is $20 per share
calculate the expected return or the cost of equity capital for the firm.
7.6 Dạng bài tính “dividend growth rate” (g%):
𝑔 = 𝑝𝑙𝑜𝑤𝑏𝑎𝑐𝑘 𝑟𝑎𝑡𝑒 × 𝑅𝑂𝐸
1. A company pays out 60% of its earnings as dividends. Its return on equity is 15%. What is the stable
dividend growth rate for the firm?
7.7 Dạng bài tính “Dividend in year n”:
- Tính Dividend từng năm. Lưu ý tốc độ g khác nhau.
- Di = D(i-1) * (1 + g)
1. A company is currently paying a dividend of $2.00 per share. The dividends are expected to grow at
20% per year for the next four years and then grow 6% per year thereafter. Calculate the expected
dividend in year 5.
2. A company is currently paying a dividend of $1.40 per year. The dividends are expected to grow at a
rate of 18% for the next three years and then a constant rate of 5% thereafter. What is the expected
dividend per share in year 5?
3. A company has just paid an annual dividend of $.24 a share and plans on increasing this amount by 2
percent annually. What is the expected dividend for Year 6?
7.8 Dạng Stock price
1. Company X has 100 shares outstanding. It earns $1,000 per year and expects to pay all of it as
dividends. If the firm expects to maintain this dividend forever, Calculate the stock price today. (The
required rate of return is 10%)
 $100
2. Company X has 100 shares outstanding. It earns $1,000 per year and expects to pay all of it as
dividends. If the firm expects to maintain this dividend forever, Calculate the stock price after the
dividend payment. (The required rate of return is 10%)
 $90
3. Company X has 100 shares outstanding. It earns $1,000 per year and expects repurchase its shares
in the open market instead of paying dividends. Calculate the number of shares outstanding at the end
of year-1, if the required rate of return is 10%.
 90
7.9 Dạng Value of dividend
1. Two corporations A and B have exactly the same risk and both have a current stock price of $100.
Corporation A pays no dividend and will have a price of $120 one year from now. Corporation B pays
dividends and will have price of $113 one year from now after paying the dividend. The corporations
pay no taxes and investors pay no taxes on capital gains but pay a tax of 30% income tax on dividends.
What is the value of the dividend that investors expect corporation B to pay one year from today?
 $10
2. A firm in Australia earns a pretax profit of $A10 per share. It pays a corporate tax of $3 per share (30%
tax rate) in taxes. The firm pays the remaining $A7 in dividends to a shareholder in 30% tax bracket.
What is the amount of tax paid by the shareholder under the imputation tax system?
 Zero
7.10 Dạng Stock outstanding / Split stocks
1. FPT has excess cash of $2,187.5 and other assets of $35,500. Equity is worth $25,000. The firm has
2,000 shares of stock outstanding and net income of $3,750. The firm has decided to spend all of its
excess cash on a share repurchase program. How many shares of stock will be outstanding after the
stock repurchase is completed? Knowing that A firm has a market value equal to its book value.
2. DHG has 20,000 shares of stock outstanding with a par value of $1 per share and a market price of
$17.50 a share. The balance sheet shows $20,000 in the common stock account, $425,000 in the
capital in excess of par value account, and $98,000 in the retained earnings account. The firm just
announced a 5-for-3 stock split. What will the market price per share be after the split?
Chapter 8 – Financial Analysis
Key terms cần nhớ:
1. The following groups are stakeholders of a public company: Shareholders, The government, Suppliers,
Employees, Bondholders, Management.
2. Assets are listed on the balance sheet in order of decreasing liquidity.
3. The following are known as current assets: Cash, Marketable securities, Receivables, Inventories.
4. The difference between Total Assets of a firm and its Total Liabilities is called “Net worth”.
5. Inventory consists of raw material, work in process, and finished goods.
6. The difference between Current Assets of a firm and its Current Liabilities is called “Net working capital”.
Net working capital (NWC) = Current assets – Current liabilities
7. Market value ratios indicate how highly is the firm valued by the investors.
8. Efficiency ratios indicate how productively is the firm utilizing its assets.
9. Profitability ratios indicate how profitable is the firm.
10. An example of liquidity ratios: Quick ratio
11. An example of leverage ratios: Debt-Equity ratio
12. When a firm improves (lowers) its days in inventories, it generally releases cash locked up in inventory.
13. When a firm improves (lowers) its average collection period, it generally releases cash locked up in
accounts receivables.
14. Return on assets would be most useful in comparing the operating profitability of two firms in different
industries.
Financial statements
Balance Sheet Asset = Liabilities + Shareholders’ Equity
Income Statement Net Income = (Total Revenue + Gains) – (Total Expenses + Losses)
Cash Flows Cash from operating activities
Cash from investing activities
Cash from financing activities
Disclosure of noncash activities is sometimes included when prepared
under the generally accepted accounting principles, or GAAP
Income of a company
Có nhiều quan điểm về lợi nhuận của 1 công ty:
• Net income = (EBIT – Interest expense) x (1 – T)
• EBIT = Total revenues – costs – depreciation
• Or EBIT = Earnings after tax + Corporate income Tax + Interest expense = Earning before tax +
Interest expense
• EBITDA = EBIT + Depreciation + Amortization
• NOPAT = After-tax interest + Net income
8.1 Measuring performance
𝑀𝑎𝑟𝑘𝑒𝑡 𝑐𝑎𝑝𝑖𝑡𝑎𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 = 𝑁𝑜 𝑜𝑓 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑠ℎ𝑎𝑟𝑒𝑠 × 𝑀𝑎𝑟𝑘𝑒𝑡 𝑝𝑟𝑖𝑐𝑒/𝑠ℎ𝑎𝑟𝑒
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑎𝑑𝑑𝑒𝑑 (𝑀𝑉𝐴) = 𝑀𝑎𝑟𝑘𝑒𝑡 𝑐𝑎𝑝𝑖𝑡𝑎𝑙𝑖𝑧𝑎𝑡𝑖𝑜𝑛 − 𝐵𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑒𝑞𝑢𝑖𝑡𝑦
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑒𝑞𝑢𝑖𝑡𝑦
𝑀𝑎𝑟𝑘𝑒𝑡 − 𝑡𝑜 − 𝐵𝑜𝑜𝑘 𝑅𝑎𝑡𝑖𝑜 =
𝐵𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑒𝑞𝑢𝑖𝑡𝑦
𝐸𝑐𝑜𝑛𝑜𝑚𝑖𝑐 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑 (𝐸𝑉𝐴) = 𝑁𝑂𝑃𝐴𝑇 − 𝑊𝐴𝐶𝐶 × 𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
- Lưu ý:
• Market capitalization: còn được gọi là Market Value of Equity
• Book value of equity: được lấy trên Balance Sheet, khoản mục Equity.
• Economic Value Added (EVA): còn được gọi là Residual Income.
1. Given a book value per share of $10 and a market value of $24, what is the market capitalization of a
firm with 2,000,000 outstanding shares?
2. Given a book value per share of $5 and a market value of $12, what is the market value added of a
firm with 2,000,000 outstanding shares?
8.2 Measuring Profitability
- Return on capital (ROC): Đo lường tổng khả năng sinh lợi trong hoạt động của doanh nghiệp
từ tất cả các nguồn tài trợ
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
𝑅𝑂𝐶 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑐𝑎𝑝𝑖𝑡𝑎𝑙
- Return on equity (ROE): Đo lường khả năng sinh lơị đối với cổ phần nói chung, bao gồm cả
cổ phần ưu đãi.
𝑅𝑂𝐸 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
- Return on assets (ROA): Đo lường hiệu quả hoạt động của công ty mà không quan tâm đến
cấu trúc tài chính
𝑅𝑂𝐴 =
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
- Profit Margin: Chỉ số này cho biết mỗi đồng doanh thu thu về tạo ra được bao nhiêu đồng thu
nhập.
Net Income
Profit Margin =
Sales
- Operating Profit Margin: Hệ số biên lợi nhuận hoạt động cho biết một đồng doanh thu có thể
tạo ra bao nhiêu đồng lợi nhuận trước thuế và lãi vay.
After tax interest + Net Income
Operating Profit Margin =
Sales
- DuPont System: để làm thay đổi chỉ số ROE doanh nghiệp có thể tác động một trong ba yếu tố
cấu thành sau: Tỷ suất lợi nhuận ròng, Vòng quay tài sản, Đòn bẩy tài chính. ROA và ROE có
mối tương quan với nhau thông qua mô hình phân tích Dupont.
Net profit Sales Assets
ROE = × × = Net Profit Margin × Asset turnover × Financial Leverage
Sales Assets Equity
Sales Net Income + Interest
ROA = × = Asset turnover × Operating Profit Margin
Assets Sales
ROE = ROA × Financial Leverage
1. Given the following data: EBIT = 400; Tax = 100; Sales = 3000; Average Total Assets = 1500, calculate
net profit margin?
2. Given the following data: EBIT = 400; Tax = 100; Sales = 3000; Average Total Assets = 1500, calculate
the ROA?
3. Given the following data: EBIT = 400; NI = 100; Average Equity = 1000, calculate the ROE?
8.3 Measuring Efficiency
- Asset turnover: Đo lường khả năng doanh nghiệp tạo ra doanh thu từ việc đầu tư vào tổng tài
sản. Chỉ số này bằng 3 có nghĩa là : với mỗi đô la được đầu tư vào trong tổng tài sản, thì công
ty sẽ tạo ra được 3 đô la doanh thu. Các doanh nghiệp trong ngành thâm dụng vốn thường có
chỉ số vòng quay tổng tài sản thấp hơn so với các doanh nghiệp khác.
Sales
Asset turnover =
Average total assets
- Inventory turnover: Trong 1 năm, hàng được lấy ra khỏi kho và mua lại hàng mới bỏ lại trong
kho hết bao nhiêu lần?
Cost of goods sold
Inventory turnover =
Average inventory
- Average days in inventory: Số ngày trung bình để công ty bán hết hàng trong kho
365
Average days in inventory =
Inventory turnover
- Receivables turnover: Trong 1 năm, cty đã cho khách hàng thiếu nợ và thu hồi được các khoản
phải thu bao nhiêu lần?
Sales
Receivables turnover =
Average receivables
- Average collection period: Số ngày trung bình để công ty thu hồi nợ từ khách hàng
365
Average collection period =
Receivables Turnover
- Payables turnover: Trong 1 năm, cty đã trả nợ cho nhà cung ứng hết bao nhiêu lần
COGS
Payables turnover =
Average payables
- Average payment period: Số ngày trung bình để công ty trả nợ cho nhà cung ứng
365
Average payment period =
Payables Turnover
1. Given the following data: Sales = 3200; Cost of goods sold = 1600; Average total assets = 1600;
Average inventory = 200, calculate the asset turnover ratio?
2. Given the following data: Sales = 3200; Cost of goods sold = 1600; Average total assets = 1600;
Average inventory = 200. Calculate Inventory turnover and the days in inventory?
3. A company has sales of $1,150,000 and cost of goods sold of $830,000. The firm had a beginning
inventory of $65,000 and an ending inventory of $72,000. Calculate Inventory turnover. What is the
length of the inventory period?
4. Given the following data: Sales = 3200; Cost of goods sold = 1600; Average receivables = 200.
Calculate the receivable turnover and the average collection period?
5. A company has average accounts receivable of $33,700, average inventory of $54,200, sales of
$364,200, and cost of goods sold of $193,400. How long does it take the firm to sell its inventory and
collect payment on the sale?
8.4 Measuring Leverage
- Long term debt ratio: Phản ánh tình hình nợ dài hạn của doanh nghiệp. (D/V)
𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡
𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡 𝑟𝑎𝑡𝑖𝑜 =
𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡 + 𝐸𝑞𝑢𝑖𝑡𝑦
- Debt-equity ratio: Phản ánh mức độ tài trợ bằng vốn vay một cách thường xuyên (qua đó thấy
được rủi ro về mặt tài chính mà công ty phải chịu) qua việc loại bỏ các khoản nợ ngắn hạn (tín
dụng thương mại phi lãi suất và những khoản phải trả ngắn hạn). (D/E)
𝐿𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡
𝐷𝑒𝑏𝑡 − 𝑒𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜 =
𝐸𝑞𝑢𝑖𝑡𝑦
- Total debt ratio: Đây là một loại tỉ lệ đòn bẩy xác định tổng số nợ liên quan đến tài sản, cho
phép so sánh mức đòn bẩy được sử dụng giữa các công ty khác nhau.
𝑇𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡 𝑟𝑎𝑡𝑖𝑜 =
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
- Times interest earned: Hệ số khả năng thanh toán lãi vay cho biết mức độ lợi nhuận đảm bảo
khả năng trả lãi như thế nào.
𝐸𝐵𝐼𝑇𝐷𝐴
𝑇𝑖𝑚𝑒𝑠 𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑎𝑟𝑛𝑒𝑑 =
𝑖𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠
1. Given the following data: EBIT = 100; Depreciation = 40; Interest = 20; Dividends = 10; calculate the
Times Interest Earned (TIE) ratio.
2. If the debt ratio is 0.5 what is the debt-equity ratio?
3. Given the following data: Long-term debt = 100; Value of leases = 20; Book value of equity = 80; Market
value of equity = 100, calculate long-term debt ratio.
4. Given the following data: Long-term debt = 100; Value of leases = 20; Book value of equity = 80; Market
value of equity = 100, calculate the debt-equity ratio.
8.5 Measuring Liquidity:
- Net working capital: Chỉ số này xác định xem một công ty có thể đáp ứng các nghĩa vụ nợ hiện
tại với tài sản hiện tại của mình không; và thiếu hoặc thừa bao nhiêu.
𝑁𝑒𝑡 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠 − 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
- Net working capital to total assets ratio: Biểu thị tỷ trọng tài sản hiện tại ròng hoặc vốn lưu
động của một công ty chiếm bao nhiêu phần trăm trên tổng tài sản của công ty đó.
𝑁𝑒𝑡 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑐𝑎𝑝𝑖𝑡𝑎𝑙
𝑁𝑊𝐶 𝑡𝑜 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 𝑟𝑎𝑡𝑖𝑜 =
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
- Current ratio: Hệ số này đánh giá khả năng mà một công ty có thể thanh toán các nghĩa vụ nợ
ngắn hạn bằng cách sử dụng các tài sản hiện tại (tiền mặt, chứng khoán ngắn hạn, các khoản
phải thu hiện tại, hàng tồn kho và các khoản trả trước).
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑎𝑠𝑠𝑒𝑡𝑠
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑟𝑎𝑡𝑖𝑜 =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
- Quick ratio: Hệ số này (còn được gọi là chỉ số Acid Test) đo lường khả năng một công ty có
thể thanh toán các nghĩa vụ ngắn hạn bằng cách sử dụng các loại tài sản hiện tại hoặc "tài sản
nhanh" (tiền mặt, chứng khoán ngắn hạn và các khoản phải thu hiện tại).
𝐶𝑎𝑠ℎ + 𝑀𝑎𝑟𝑘𝑒𝑡𝑎𝑏𝑙𝑒 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 + 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠
𝑄𝑢𝑖𝑐𝑘 𝑟𝑎𝑡𝑖𝑜 =
- Cash ratio: Chỉ số này đo lường khả năng một công ty có thể trả các khoản nợ hiện tại của
mình bằng cách sử dụng tiền mặt và chứng khoán ngắn hạn. Chứng khoán ngắn hạn là công
cụ nợ ngắn hạn tốt, giống như tiền mặt.
𝐶𝑎𝑠ℎ + 𝑀𝑎𝑟𝑘𝑒𝑡𝑎𝑏𝑙𝑒 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠
𝐶𝑎𝑠ℎ 𝑟𝑎𝑡𝑖𝑜 =
- Lưu ý:
• Current ratio, Quick ratio, Cash ratio: Tử số và mẫu số dư trung bình cộng trên Balance
Sheet.
1. Given the following data: Total current assets = $852; Total current liabilities = $406; Long-term debt =
$442, calculate the net working capital.
2. Given the following data: Current assets = 500; Current liabilities = 250; Inventory = 200; Account
receivables = 200; calculate the current ratio.
receivables = 200; calculate the quick ratio.
receivables = 200; calculate the cash ratio? Assume that the firm has no marketable securities.
receivables = 200; calculate the quick ratio.
8.6 Measuring Investment
- P/E ratio: Chỉ số P/E thể hiện mức giá mà bạn sẵn sàng bỏ ra cho một đồng lợi nhuận thu được
từ cổ phiếu. Hoặc nhà đầu tư sẵn sàng trả giá bao nhiêu cho cổ phiếu của 1 doanh nghiệp dựa
trên lợi nhuận (thu nhập) của doanh nghiệp đó.
𝑃𝑟𝑖𝑐𝑒
𝑃/𝐸 =
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 − 𝑃𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝑠ℎ𝑎𝑟𝑒𝑠
𝐸𝑃𝑆 =
𝑁𝑜 𝑜𝑓 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘𝑠
- Dividend yield: là cổ tức mà một công ty trả trong một thời kỳ kế toán, thường là 1 năm, được
tính bằng cách lấy cổ tức của mỗi cổ phần chia cho giá trị hiện hành trên thị trường của cổ phiếu.
𝑇𝑜𝑡𝑎𝑙 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑎𝑖𝑑 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑦𝑖𝑒𝑙𝑑 =
𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
- Payout ratio: Tỷ lệ trả cổ tức là tỷ trọng của tổng lợi nhuận được phân phối dưới dạng cổ tức,
phần còn lại được gọi là lợi nhuận giữ lại.
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑎𝑖𝑑 𝑝𝑒𝑟 𝑦𝑒𝑎𝑟
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑎𝑦𝑜𝑢𝑡 =
1. Given the following data: Earnings per share = $6; Dividends per share = $3; Price per share = $60,
calculate the P/E ratio?
2. Given the following data: Earnings per share = $5; Dividends per share = $3; Price per share = $50.
calculate the dividend yield?
3. Given the following data: Earnings per share = $5; Dividends per share = $3; Price per share = $50.
Calculate the payout ratio?
8.7 Dạng tổng hợp
Look up the financial statement of Company ABC:
Balance Sheet at 31/12/2020
Assets 31/12/2020 31/12/2019
Current assets
Cash and marketable securities 661 530
Account receivable 166 247
Inventories 8,209 7,611
Other current assets 215 298
Total current assets 9,251 8,686
Fixed assets
Tangible fixed assets
Property, plant, and equipment 31,477 28,836
Less accumulated depreciation 8,755 7,475
Net tangible fixed assets 22,722 21,361
Long term investments 253 509

Other long-term assets 460 313
Total assets 32,686 30,869
Liabilities and Shareholders' Equity 31/12/2020 31/12/2019
Current liabilities
Debt due for repayment 1,021 1,104
Accounts payable 4,543 4,137
Other current liabilities 2,458 2,510
Total current liabilities 8,022 7,751
Long term debt 5,039 5,576

Deferred income taxes 660 670
Other long-term liabilities 910 774
Total liabilities 14,631 14,771
Common Stock and other paid-in-capital 735 729

Retained earnings and capital surplus 17,320 15,369
Total shareholders' equity 18,055 16,098
Total liabilities and shareholders' equity 32,686 30,869
Income Statement during the year From 1/1/2020 to 31/12/2020

Net sales 48,230
Cost of goods sold 31,729
Selling, general, and administrative expenses 11,158
Depreciation 1,539
Earnings before interest and taxes (EBIT) ?
Interest expense 298
Earnings before taxes (EBT) ?
Tax (20%) ?
Net Income ?
Dividends (30%) ?
Addition to retained earnings (70%) ?
a. Fill in the blank (?) of Income statement.
b. Calculate the following financial ratios in 2020:
• Return on asset (ROA), return on equity (ROE), Return on capital (ROC), Profit Margin, Operating
Profit Margin
• Asset Turnover, Cash cycle of operation (Average Days in Inventory, Average collection period,
Average payment period)
• Current ratio, quick ratio, cash ratio
Chapter 9 – Working Capital Management
1. The following are the types of inventories: raw material, work in process, finished goods.
2. The costs of holding inventory are carrying cost and order cost.
3. The economic order quantity (EOQ) is calculated using:
2 × 𝑠𝑎𝑙𝑒𝑠 × 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑜𝑟𝑑𝑒𝑟

𝐸𝑂𝑄 = √
𝑐𝑎𝑟𝑦𝑖𝑛𝑔 𝑐𝑜𝑠𝑡
4. In the EOQ inventory model, the optimal order size is achieved when carrying costs = order costs.
5. When credit is granted to another firm this gives rise to an Accounts receivable.
6. Account receivables include Trade credit and Consumer credit.
7. Examples of transactions involve credit: 2/30, net 60 or 2/10 EOM, net 60.
8. If a firm grants credit with terms of 3/10 net 30, the creditor receives a discount of 3% when payment
is made in less than 10 days after the sale.
9. The net credit period for a company with terms of 3/10 net 60 is 50 days.
10. The most important source of short-term financing is bank loan.
11. A large firm may hold substantial cash balances because these balances are required by the bank in
the form of compensating balances.
12. The market for short-term investments is called money market.
9.1 Inventory Management
- Để quản trị hàng tồn kho, ngoài các chỉ số như Inventory Turnover, Days in inventory, thì công ty có
thể quản trị thông qua tính toán số lượng tối ưu hàng tồn kho – nghĩa là ở mức số lượng đó thì chi
phí liên quan đến hàng tồn kho là thấp nhất.
- Nhận diện dạng bài có chữ “optimal” (tối ưu).
2 × 𝑠𝑎𝑙𝑒𝑠 × 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑜𝑟𝑑𝑒𝑟

𝐸𝑂𝑄 = √
𝑐𝑎𝑟𝑦𝑖𝑛𝑔 𝑐𝑜𝑠𝑡
- Trong đó:
• EOQ: Số lượng đặt hàng tối ưu để chi phí liên quan đến hàng tồn kho là thấp nhất
• Sales: Số đơn vị sản phẩm dự kiến sẽ bán trong năm (units)
• Cost per order: Chi phí cố định cho 1 đơn đặt hàng ($ / đơn)
• Carrying cost: Chi phí lưu kho cho 1 sản phẩm ($ / unit)
1. A company uses 400,000 tons of stone per year. The carrying costs are $100/ton. The cost per order
is $500. Calculate the economic order quantity per order.
is $500. Calculate the optimal number of orders per year.
is $500. Calculate the optimal annual order costs.
is $500. Calculate the optimal carrying costs.
is $500. Calculate the total costs of optimal inventory.
is $500. Calculate the economic order quantity per order, the optimal number of orders per year, the
optimal annual order costs, the optimal carrying costs and the total costs of optimal inventory.
7. A company uses 1,200,000 tons of stone per year. The carrying costs are $75/ton. The cost per order
is $480. Calculate the economic order quantity per order, the optimal number of orders per year, the
optimal annual order costs, the optimal carrying costs and the total costs of optimal inventory.
8. A company expects to sell 2,430 printers next year. Annual carrying cost is $50 per printer, and ordering
cost is $30. The company operates 360 days a year. Calculate the EOQ, number of times per year the
company reorder, the total annual cost if the EOQ quantity is ordered, the length of an order cycle.
9. A firm has sales of $860,000 and cost of goods sold of $490,000. The firm had a beginning inventory
of $98,000 and an ending inventory of $112,000. What is the length of the inventory period?
10. A firm has sales of $498,000 and cost of goods sold of $221,000. At the beginning of the year, inventory
was $36,400. At the end of the year, the inventory balance was $31,800. What is the inventory turnover
rate?
11. A firm has sales of $710,000. The cost of goods sold is equal to 57 percent of sales. The firm has
average inventory of $23,940. How many days on average does it take the firm to sell its inventory?
9.2 Receivables Management
- Để quản trị các khoản phải thu, ngoài các chỉ số như Receivales Turnover, Collection period thì công
ty có thể quản trị thông qua Terms of sales và Break-even analysis.
- Nhận diện dạng bài có “term of sale” (chính sách bán hàng), hỏi Effective annual rate hoặc implied
interest rate hoặc cost of forgoing the discount.
365
𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑒𝑥𝑡𝑟𝑎 𝑑𝑎𝑦𝑠 𝑐𝑟𝑒𝑑𝑖𝑡
𝐸𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒 𝑎𝑛𝑛𝑢𝑎𝑙 𝑟𝑎𝑡𝑒 (𝐸𝐴𝑅) = (1 + ) −1
𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑 𝑝𝑟𝑖𝑐𝑒
- Nhận diện dạng bài có “credit”, “possibility” (xác suất khách hàng trả tiền mua hàng), hỏi kêu tính
“Break-even p” hoặc “Expected profit from new customer”.
𝐶𝑜𝑠𝑡
𝐵𝑟𝑒𝑎𝑘 − 𝑒𝑣𝑒𝑛 𝑝 =
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
1. A company has sales of $626,000. The cost of goods sold is equal to 68 percent of sales. The beginning
accounts receivable balance is $75,534 and the ending accounts receivable balance is $76,209. How
long on average does it take the firm to collect its receivables?
2. Supposing you purchase goods on terms of 1/10, net 30. Taking compounding into account, what
annual rate of interest is implied by the cash discount? (Assume a year has 365 days, sale is $100)
3. Suppose you purchase goods on terms of 3/10, net 60. Taking compounding into account, what annual
rate of interest is implied by the cash discount? (Assume a year has 365 days, sale is $100.)
4. Suppose you purchase goods on terms of 2/10, net 50. Taking compounding into account, what annual
rate of interest is implied by the cash discount? (Assume a year has 365 days, sale is $100.)
5. A supplier offers you credit terms of 1.5/10, net 30. What is the cost of forgoing the discount on a $1,200
purchase?
6. A supplier offers you credit terms of 2/15, net 45. What is the cost of forgoing the discount on a $218,400
purchase?
7. Ms. Nhu has ordered goods with a value of $800. The production cost is $600. Under what conditions
should you extend credit if there is no possibility of repeat orders?
10. The default rate of a firm' new customers has been running at 10%. The average sale for each new
customer amounts to $800, generating a profit of $100 and a 40% chance of a repeat order next year.
The default rate on repeat orders is only 2%. If the interest rate is 9%, what is the expected profit from
each new customer?
11. The default rate of a firm 's new customers has been running at 20%. The average sale for each new
customer amounts to $500, generating a profit of $200 and a 30% chance of a repeat order next year.
The default rate on repeat orders is only 5%. If the interest rate is 6%, what is the expected profit from
each new customer?
12. A firm is currently experiencing a bad debt ratio of 4%. Terry is convinced that, with looser credit
controls, this ratio will increase to 8%; however, she expects sales to increase by 10% as a result. The
cost of goods sold is 80% of the selling price. Per $100 of current sales, what is a firm 's expected profit
under the proposed credit standards?
13. A firm is currently experiencing a bad debt ratio of 6%. The manager convinced that, with tighter credit
controls, he can reduce this ratio to 2%; however, he expects sales to drop by 8% as a result. The cost
of goods sold is 75% of the selling price. Per $100 of current sales, what is the manager's expected
profit under the proposed credit standards?
9.3 Payables Management
- Để quản trị các khoản phải trả, chúng ta có thể dùng chỉ số về Payables Turnover và Payment period.
𝐶𝑂𝐺𝑆
𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝑠 𝑇𝑢𝑛𝑟𝑜𝑣𝑒𝑟 =
𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑝𝑎𝑦𝑎𝑏𝑙𝑒𝑠 𝑏𝑎𝑙𝑎𝑛𝑐𝑒
365
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 𝑃𝑒𝑟𝑖𝑜𝑑 =
𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟
1. A firm has sales of $642,000 and average accounts payable of $56,400. The cost of goods sold is
equivalent to 68 percent of sales. How long does it take Down Towner to pay its suppliers?
2. A firm had a beginning accounts payable balance of $56,900 and an ending accounts payable balance
of $62,800. Sales for the period were $675,000 and costs of goods sold were $448,000. What is the
payables turnover?
9.4 Cash Management
- Nhận diện dạng bài hỏi “Operating cycle”, “Cash cycle”, “Cash Balance”
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑐𝑦𝑐𝑙𝑒 = 𝑁𝑜 𝑜𝑓 𝑑𝑎𝑦𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 + 𝑁𝑜 𝑜𝑓 𝑐𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑝𝑒𝑟𝑖𝑜𝑑
𝐶𝑎𝑠ℎ 𝑐𝑦𝑐𝑙𝑒 = 𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑐𝑦𝑐𝑙𝑒 − 𝑁𝑜 𝑜𝑓 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑝𝑒𝑟𝑖𝑜𝑑
𝐶𝑎𝑠ℎ 𝑏𝑎𝑙𝑎𝑛𝑐𝑒 𝑎𝑡 𝑡ℎ𝑒 𝑒𝑛𝑑 𝑜𝑓 𝑝𝑒𝑟𝑖𝑜𝑑
= 𝐶𝑎𝑠ℎ 𝑏𝑎𝑙𝑎𝑛𝑐𝑒 𝑎𝑡 𝑡ℎ𝑒 𝑏𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝑜𝑓 𝑝𝑒𝑟𝑖𝑜𝑑
+ 𝐶𝑜𝑙𝑙𝑒𝑐𝑡𝑖𝑜𝑛 𝑏𝑦 𝑐𝑎𝑠ℎ 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑝𝑒𝑟𝑖𝑜𝑑 − 𝑃𝑎𝑦𝑚𝑒𝑛𝑡 𝑏𝑦 𝑐𝑎𝑠ℎ 𝑑𝑢𝑟𝑖𝑛𝑔 𝑡ℎ𝑒 𝑝𝑒𝑟𝑖𝑜𝑑
1. A firm has an inventory turnover rate of 16, a receivables turnover rate of 21, and a payables turnover
rate of 11. How long is the operating cycle?
2. A company sells its inventory in 87 days on average. Its average customer charges their purchases on
a credit card and payment are received in 10 days. A company takes 56 days on average to pay for its
purchases. Given this information, what is the length of D&M's cash cycle?
3. A company has an inventory turnover rate of 13, an accounts payable period of 44 days, and an
accounts receivable period of 35 days. What is the length of the cash cycle?
4. A company has an inventory turnover of 16 and an accounts receivable turnover of 10. The accounts
payable period is 51 days. What is the length of the cash cycle?
5. A company currently has an operating cycle of 76 days. The firm is analyzing some operational changes
that are expected to decrease the accounts receivable period by 3 days and decrease the inventory
period by 8 days. The accounts payable turnover rate is expected to increase from 7 to 9 times per
year. If all of these changes are adopted, what will the firm's new operating cycle be?
6. A company has an inventory period of 33 days, an accounts payable period of 41 days and an accounts
receivable period of 27 days. Management is considering offering a 5 percent discount if its credit
customers pay for their purchases within 10 days. If the new discount is offered the accounts receivable
period is expected to decline by 13 days. If the new discount is offered, the cash cycle will change from
_____ days to _____ days.
7. A firm currently has a 36-day cash cycle. Assume the firm changes its operations such that it decreases
its receivables period by 3 days, increases its inventory period by 2 days, and decreases its payables
period by 3 days. What will the length of the cash cycle be after these changes?
8. For its most recent year a company had Sales (all on credit) of $830,000 and Cost of Goods Sold of
$525,000. At the beginning of the year its Accounts Receivable were $80,000, its Accounts Payable
were $125,000 and its Inventory was $100,000. At the end of the year its Accounts Receivable were
$86,000, its Accounts Payable were $105,000 and its Inventory was $110,000. Calculate cash cycle
operations.
9. As of the beginning of the quarter, a firm has a cash balance of $250. During the quarter the firm pays
its suppliers $310 and collects $420 from customers. It also pays an interest payment of $30 and a tax
bill of $170. In addition, the firm borrows $135. What is the cash balance at the end of the quarter?
10. On April 1st, a firm had a beginning cash balance of $200. March sales were $460 and April sales were
$510. During April the firm had cash expenses of $150 and payments on accounts payable of $210.
The accounts receivable period is 30 days. What is the firm's beginning cash balance on May 1st?
11. A firm had a Quarter 2 beginning cash balance of $430. Sales for Quarters 1 through 3 are estimated
at $600, $800, and $900, respectively. The cost of goods sold is equal to 70 percent of sales. Goods
are purchased one quarter prior to the month of sale. The accounts payable period is 30 days and the
accounts receivable period is 15 days. The firm had quarterly cash expenses of $180. What was the
cash balance at the end of Quarter 2? Assume a 360-day year.
Chapter 10 – Financial Planning
1. Short-term financial decisions involve short lived assets, short lived liabilities and are easily reversed.
2. The main difference between short-term and long-term finance is the timing of short-term cash flow
being within a year or less.
3. Cumulative capital requirement can be met by long-term financing and short-term financing.
4. The sustainable growth rate is equal to Plowback ratio x Returns on equity.
5. Example of one of the least liquid assets: Long-term assets.
6. The order of liquidity: Marketable securities – Receivables – Inventories - Long-term assets.
7. Net working capital is defined as the difference between current assets and current liabilities.
8. The general formula for calculating the "Ending accounts receivable (AR)”:
Ending (AR) = beginning (AR) + sales - collections
9. The cash cycle is represented by the following sequence:
Cash, raw materials, finished goods, and receivables, cash
10. The first step in the preparation of cash budget is sales forecast.
11. Cash inflow in cash budgeting comes mainly from collection on accounts receivable.
12. A large part of cash outflow in cash budgeting is due to payments on accounts payable.
10.1 Sources of cash
- Nhận dạng bài kêu tính “forcasted collections on AR in ….” hoặc “Ending AR”
- Áp dụng công thức:
Collection của tháng x = Collection từ sales trong tháng x + Collection từ AR của tháng trước
Ending (AR) = beginning (AR) + sales – collections
- Trường hợp đề cho Ending (AR) của tháng i, nhưng ko cho sales của tháng i thì mặc định luôn
Ending (AR) của tháng i sẽ được collect vào tháng (i + 1).
1. A company has forecast sales in the first 3 months of the year as follows (figures in millions): January,
$60; February, $80; March, $100. 60% of sales are usually paid for in the month that they take place
and 40% in the following month. Receivables at the end of December were $24 million. What are the
forecasted collections on accounts receivable in March?
and 30% in the following month. Receivables at the end of December were $20 million. What are the
forecasted collections on accounts receivable in March?
$80; February, $60; March, $40. 70% of sales are usually paid for in the month that they take place,
20% in the following month, and the final 10% in the next month. Receivables at the end of December
were $23 million. What are the forecasted collections on accounts receivable in March?
$200; February, $140; March, $100. 50% of sales are usually paid for in the month that they take place,
30% in the following month, and the final 20% in the next month. Receivables at the end of December
were $100 million. What are the forecasted collections on accounts receivable in March?
5. A company has forecast sales in the first 3 months of the year as follows (figures in millions): February,
$120; March, $135; April, $90. 65% of sales are usually paid for in the month that they take place and
35% in the following month. Receivables at the end of January were $45 million.
a. What are the forecasted collections on accounts receivable in April?
b. What are the receivable at the end of April?
and 40% in the following month. Receivables at the end of December were $75 million.
a. What are the forecasted collections on accounts receivable in March?
b. What are the receivable at the end of March?
and 40% in the following month. Receivables at the end of December were $25 million.
a. What are the forecasted collections on accounts receivable in March?
b. What are the receivable at the end of March?
10.2 Uses of cash
- Nhận diện dạng bài kêu tính “Uses of cash in ….”
Payment của tháng x = Payment từ purchases trong tháng x + Payment từ AP của tháng trước
1. Calculate payment in February and March by cash of a company with following information:
February March
1. Purchases of materials
+ For cash 40 40
+ For credit 10 20
2. Other expenses 10 10
3. Taxes, interest, … 5 5
4. Capital investment 20 0
10.3 Cash budgeting
- Nhận dạng bài kêu tính “cumulative financing requirement”
- Lập bảng Sources of cash, Uses of cash, Cash budgeting
Changes in cash = Sources of cash – Uses of cash
Ending (Cash) = Beginning (Cash) + Changes in cash
Cash requirement = Ending (Cash) – Minimum Cash
- Nếu Cash requirement > 0: surplus; Nếu Cash requirement < 0: shortage.
1. Complete the uses of cash and cumulative financing requirement on February and March.
February March Purchases:
1. Purchases of materials + Jan (credit) 20
+ For cash 40 40 + Credit 1 month
+ For credit 10 20 Minimum Cash 50
2. Other expenses 10 10 Cash at start Feb. 60
3. Taxes, interest, … 5 5
Sources of cash February March

- Sale 90 100
- Collection
+ Sale in current period 54 60
+ Sale in last period 28 36
+ Total collection 82 96
2. Complete the Cash Budgeting on February and March.

Sources of cash February March Minimum Cash: 50
- Sale 90 100 Cash at start Feb: 60
- Collection
+ Sale in current period 54 60
+ Sale in last period 28 36
+ Total collection 82 96
Uses of cash February March
- Purchases of materials
+ For cash 40 40
+ For credit 20 10
- Other expenses 10 10
- Taxes, interest, 5 5
- Capital investment 20 0
Total uses 95 65
3. Complete the sources and the uses of cash on February and March.
Sales Purchases
+ For cash 60% + Jan (credit) 20
+ For credit 40% + Credit 1 month
+ Jan 70 Minimum Cash 50
February March Cash at start Feb. 60
1. Total sales 90 100
2. Purchases of materials
+ For cash 40 40
+ For credit 10 20
3. Other expenses 10 10
4. Taxes, interest, 5 5
4. Most of Tesla’s cash flow inflow comes from the sale of soup. We therefore start with a sales forecast
by quarter for 2014:
Second Third Fourth
First Quarter Quarter Quarter Quarter
Receivables at start of period ($
millions) 187
Sales ($ millions) 650 748 585 234
We assume that sales in the last quarter of the previous year were $ 250 million.
Second Third Fourth
First Quarter Quarter Quarter Quarter
Cash at start of period 50
Sales become accounts receivable before they become cash. Cash flow comes from collections on account
receivable. Suppose that 65% of sales are cashed in in the immediate quarter and 35% are cashed in the
following quarter.
Uses of cash:
First Second Third Fourth
Uses of cash Quarter Quarter Quarter Quarter
Payments on account payable 220 210 367 252
Increase in inventory 150 150 170 180
Labor and Other expenses 136 136 136 136
Capital expenditures 70 10 8 14.5
Taxes, interest and dividends 46 46 46 46
Total uses 622 552 727 628.5
a. Calculate receivables at the end of period in 2014.
b. Construct table showing Tesla’s cumulative financing requirement in 2014. We assume that Tesla’s
minimum operating cash balance is $30 million.
5. Most of Vingroup’s cash flow inflow comes from the sale of mattresses. We therefore start with a sales
forecast by quarter for 2015:
First Second Third Fourth
Quarter Quarter Quarter Quarter
Receivables at start of
period ($ millions) 150
Sales ($ millions) 560 502 742 836
We assume that sales in the last quarter of the previous year were $ 240 million.
Cash at start of period 25
Sales become accounts receivable before they become cash. Cash flow comes from collections
on account receivable. Suppose that 65% of sales are cashed in in the immediate quarter and
35% are cashed in the following quarter.
Uses of cash:
Uses of cash
Payments on account payable 250 250 267 261
Increase in inventory 150 150 170 180
Labor and Other expenses 136 136 136 136
Capital expenditures 70 10 8 14.5
Taxes, interest and dividends 46 46 46 46
Total uses 652 592 627 637.5
a. Calculate receivables at the end of period in 2015.
b. Construct table showing Vingroup’s cumulative financing requirement in 2015. We assume that
Vingroup’s minimum operating cash balance is $28 million.

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The place where formerly issued

It supplies funds to budding enterprises It does not provide funding to

Intermediary Underwriters Brokers

Fluctuates, depends on the demand

Organizational Not rooted to any specific spot or

Many products are available such as

Company and the investors are

Underwriters are the

Help new and existing companies

Both buy and sell-side investors work

PRIMARY MARKET SECONDARY MARKET

Secondary markets provide the aftermarket for

Secondary markets are important because they

Business firms whose securities are traded in

Nature of Market Informal Formal

Treasury Bills, Commercial Papers, Shares, Debentures, Bonds, Retained

Risk Factor Low Comparatively High

Liquidity High Low

Time Horizon Within a year More than a year

Increases liquidity of funds in the

2.9 Characteristics of financial market

• Cho Nominal rate compounded m, kêu tính EAR:

7.1 Dạng bài tính “Market Capitalization”:

Long term investments 253 509

Long term debt 5,039 5,576

Common Stock and other paid-in-capital 735 729

Income Statement during the year From 1/1/2020 to 31/12/2020

2 × 𝑠𝑎𝑙𝑒𝑠 × 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑜𝑟𝑑𝑒𝑟

2 × 𝑠𝑎𝑙𝑒𝑠 × 𝑐𝑜𝑠𝑡 𝑝𝑒𝑟 𝑜𝑟𝑑𝑒𝑟

Sources of cash February March

2. Complete the Cash Budgeting on February and March.

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