Solutions to Lectures on Corporate Finance, Second Edition
Peter Bossaerts and Bernt Arne Ødegaard
2006
,Contents
1 Finance 1
2 Axioms of modern corporate finance 2
3 On Value Additivity 3
4 On the Efficient Markets Hypothesis 4
5 Present Value 6
6 Capital Budgeting 14
7 Valuation Under Uncertainty: The CAPM 21
8 Valuing Risky Cash Flows 25
9 Introduction to derivatives. 28
10 Pricing Derivatives 34
11 Pricing of Multiperiod, Risky Investments 36
12 Where To Get State Price Probabilities? 39
13 Warrants 40
14 The Dynamic Hedge Argument 42
15 Multiple Periods in the Binomial Option Pricing Model 49
16 An Application: Pricing Corporate Bonds 55
17 Are capital structure decisions relevant? 60
18 Maybe capital structure affects firm value after all? 64
19 Valuation Of Projects Financed Partly With Debt 68
20 And What About Dividends? 70
21 Risk And Incentive Management 73
,Finance 1
Chapter 1
Finance
, 2 Axioms of modern corporate finance
Chapter 2
Axioms of modern corporate finance
Peter Bossaerts and Bernt Arne Ødegaard
2006
,Contents
1 Finance 1
2 Axioms of modern corporate finance 2
3 On Value Additivity 3
4 On the Efficient Markets Hypothesis 4
5 Present Value 6
6 Capital Budgeting 14
7 Valuation Under Uncertainty: The CAPM 21
8 Valuing Risky Cash Flows 25
9 Introduction to derivatives. 28
10 Pricing Derivatives 34
11 Pricing of Multiperiod, Risky Investments 36
12 Where To Get State Price Probabilities? 39
13 Warrants 40
14 The Dynamic Hedge Argument 42
15 Multiple Periods in the Binomial Option Pricing Model 49
16 An Application: Pricing Corporate Bonds 55
17 Are capital structure decisions relevant? 60
18 Maybe capital structure affects firm value after all? 64
19 Valuation Of Projects Financed Partly With Debt 68
20 And What About Dividends? 70
21 Risk And Incentive Management 73
,Finance 1
Chapter 1
Finance
, 2 Axioms of modern corporate finance
Chapter 2
Axioms of modern corporate finance
