chapter3-assignment

Assignment 3 outline:According to Lynda Gratton of The Financial Times, workplace loyalty is dead and has been “killed off through shortening contracts, outsourcing, automation and multiple careers.” is extremely right. I agree that there is no place for workplace loyalty today.Professional loyalty means the employees` love and loyalty for their own career. Company loyalty is the loyalty of the staff for the enterprise. There are many reasons for lacking of loyalty in workplace.Why is no place for workplace loyalty today?Some employees can clearly feel the contact between him and work are not close, and there are many reason for this situation, such as when company has recession, it will have a large of layoffs.Company doesn`t care about employee`s loyalty.Employee`s benefits, training and promotion opportunities are greatly reduced.The new employee wants to establish their own brand and have their own expectations when the time is rape.Strong liquidity will lead to the decline in employees` commitment. Communication between employee and boss, between departments, and senior management and management staff is not enough. Many people who have been fired often don't even know why.Another problem is that few companies truly keep their promises to their employees, yet foolishly they expect their employees to remain loyal. Many employees havebecome cynical about management in general, largely because of companies' broken promises concerning raises, promotions, bonuses, incentives, enhanced benefits, and other work related matters.What can we do improve worker loyalty?As an employee, the key is to take responsibility for your own life and professional career and ask your boss what is expected of you.Loyalty is not a quality to be expected; loyalty must be earned. The employer, the one doing the hiring, must earn the respect and loyalty of employees if the company wants loyalty returned.Companies should to provide more opportunities for employees` learning and promotion.Stimulating the ambitions and dreams of employees is also important. Companies should provide glory and good treatment to good employees, and give reflection and elimination to someone, who does nothing.。

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名著精读《傲慢与偏见》第三章第3节Mr. Bingley had soon made himself acquainted with all the principal people in the room; he was lively and unreserved danced every dancewas angry that the ball closed so earlyand talked of giving one himself at Netherfield. Such amiable qualities must speak for themselves. What a contrast beeen him and his friend! Mr. Darcy danced only once with Mrs. Hurst and once with Miss BingleyDeclined being introduced to any other ladyand spent the rest of the evening in walking about the room speaking occasionally to one of his own party. His character was decided. He was the proudestmost disagreeable man in the worldand every body hoped that he would never e there again. Amongst the most violent against him was Mrs. Benwhose dislike of his general behaviour was sharpened into particular resentment by his having slighted one of her daughters.彬格莱先生很快就熟悉了全场所有的主要人物。

张美荣2112019094Assignment IIIPassage 1Father Hooper’s breath heaved; it rattled in his throat; but, with a mighty effort, grasping forward with his hands, he caught hold of life, and held it back till he should speak. He even raised himself in bed; and there he sat, shivering with the arms of death around him, while the black veil hung down, awful, at that last moment, in the gathered terrors of a lifetime. And yet the faint, sad smile, so often there, now seemed to glimmer from its obscurity, and linger on Father Hoope r’s lips.胡伯教父奄奄一息，一口气在喉咙里咔咔作响。

但是他用手拼命向前挣扎，才使得命运之神留得片刻，好让他把话说完。

他甚至抬身坐了起来，在死神的怀抱中颤抖。

这时，那可怕的黑色面纱竟垂落而下，在这最后的时刻，凝聚了一生的恐怖。

那时常出现的淡淡的凄楚的微笑，透过黑色面纱闪现出来，在教父的唇边久久不去。

“Why do you tremble at me alone?” cried he, turning his veiled face round the circle of pale spect ators. “Tremble also at each other! Have men avoided me, and women shown no pity, and children screamed and fled, only for my black veil? What, but the mystery which it obscurely typifies, has made this piece of crape so awful? When the friend shows his inmost heart to his friend; the lover to his best beloved; when man does not vainly shrink from the eye of his Creator, loathsomely treasuring up the secret of his sin; then deem me a monster, for the symbol beneath which I have lived, and die! I look around me, and, lo! on every visage a Black Veil!”(Nathaniel Hawthorne, The Minister’s Black Veil)他把他那戴面纱的脸转过来，环顾着四周面色苍白的围观者说道：“为什么在我面前你们就两腿发抖？”“你们彼此见面也该发抖啊！男人躲着我，女人不可怜我，小孩儿（见了我）叫喊着跑开，就因为我的黑色面纱吗？它黑漆漆的颜色却有种神秘感，可是什么使得这块面纱这么恐怖呢？等到有一天，朋友以及爱人之间坦诚相见，人类不再妄想摆脱造物主的目光并且昧着良心地掩藏自己的罪孽时，再把我看作是怪物吧。

CHAPTER 3 Escape第三章逃跑The barn was very large. It was very old. It smelled of hay and it smelled of manure肥料. It smelled of the perspiration汗味of tired horses and the wonderful sweet breath of patient cows温和的奶牛. It often had a sort of peaceful smell - as though nothing bad could happen ever again in the world. It smelled of grain and of harness dressing马具的装饰and of axle grease车轴润滑油and of rubber boots and of new rope. And whenever the cat was given a fish-head to eat, the barn would smell of fish. But mostly it smelled of hay, for there was always hay in the great loft up overhead头顶上方的大阁楼里. And there was always hay being pitched down to the cows and the horses and the sheep.仓库非常大，也非常旧，里面充满了干草和粪肥的气味。

还有疲倦的马身上散发的汗味和温和的奶牛呼出的令人愉快的甜蜜气息。

这常常是一种使人平静的气味——仿佛这世上不会再有什么糟糕的事发生了。

还有谷物、马具的装饰、车轴润滑油、胶靴和新绳子的气味。

而且不论什么时候给猫一个鱼头啃，仓库里都能闻到鱼的气味。

International FinanceFall2010Assignment3:The overlapping generations modelThe due date for this assignment is Monday November22nd.Reading assignment:Chapter31.In the overlapping generations model,agents live in2periods:they were born in oneperiod(Young)and will die in the next period(Old).The population grows at rate n (for example2%).Therefore the population dynamic isN t+1=(1+n)N tAll agents were born with zero assets and we assume that they leave nothing to their children.The utility of an agent isU t=u c Y t + u c O t+1where u(c)=log c.Also assume that every agent’s labor supply is l Y(when Young) and l O(when Old).The salaries of the agent are then wl Y(when Young)and wl O (when Old).The agent can buy government bonds b which gives them an interest r in the next period.So if in period t the agent buys b t+1then he will receive(1+r)b t+1 in period t+1.(a)What generation is gonna buy government bonds?Why?(b)Write down the budget constraint of the agent in each period.What is theintertemporal budget constraint?(c)Write down the optimal conditions of the e them to derive the Eulerequation.(d)What are the consumption of the agent in each period?(e)Who is gonna save in the economy?(the Young?the Old?)and how much dothey save?(f)The production function is Y=AK L1 .What is output per capita function?(g)The market clearing condition:what is the supply of labor in the economy?(Hint:how much labor from the Young?from the Old?)The saving in the economy isto buy government bonds which are used to build capital stock in the next period.What is the capital stock in the economy?(h)From the saving formula that you derived above,write down the formula for thecapital per capita(i)The depreciation rate of capital is100%(explain why).Therefore the problem ofthe…rm is to maximizeF(K;L) wL rKCompute the wage and interest rate as functions of the capital per capita.2.In this exercise we will study the2social security systems using the overlapping gen-erations model.The production function is f(k)=k where k is the capital stock per capita.The utility function isU t c Y t;c O t+1 =log c Y t + log c O t+1Individuals are supposed to work when they are young and retired when they are old.Therefore the individual labor supply isl Y=1;l O=0Population grows at rate n:(a)The…rst system is called Pay as you go:in this system,each young individualspays a lumpt sum tax T,the taxes are used to pay the old generation in that period.1.How much does an old individual receive?2.Write down the budget constraint in each period(Young and Old)of eache those constraints to write down the intertemporal budget con-straint.pute the individual consumptions(how much a person consumes whenYoung and then when Old).pute the aggregate consumption in the…rst period(when the governmentstarts the Pay as you go system).Does the Pay as you go system increase ordecrease aggregate consumption in the…rst period?pute the individual saving.Does this system increase or increase thesaving of each person?Why?pute the capital stock per capita as a function of the capital stock percapita in the previous period(in other words,derive the dynamic of thecapital stock per capita).Calculate the capital stock per capita in the steadystate.(b)The second system is named Fully Funded:Each person has to pay a lumpsum tax T when they are young.The government then uses this tax to invest and repay the taxpayers in the next period(when they are old).1.Redo all the questions as in the Pay as you go system.pare the capital stock per capita in the steady state between the twosystems.。

《财务管理》课程编号：CFIN311课程类型：专业必修课总学时： 54 学时学分：3学分适用对象：工商管理专业先修课程：CACC111/MFIN221Learning ObjectivesOn successful completion of this paper candidates should be able to:–Discuss the role and purpose of the financial management function–Assess and discuss the impact of the economic environment on financial management–Discuss and apply working capital management techniques–Carry out effective investment appraisal–Identify and evaluate alternative sources of business finance–Discuss and apply principles of business and asset valuations–Explain and apply risk management techniques in business. Teaching MethodsThis course contains lectures, class discussions, homework assignments, quizzes and exams.Group discussions of the course material are an important part of the learning process in this course. Students are expected to make a meaningful contribution to the class, whether by asking questions, responding to questions, delivering presentations or contributing in other ways to class discussion.Core syllabus areas and teaching guidanceWorking capital management, investment appraisal and business finance are core areas of this course. Lecturing along with past exam problems practicing will be used to demonstrate how to apply key knowledge and techniques.Study TimeTo do well in this course, you need to devote time outside of class for practice and proper preparation. A typical student needs at least20 hours of no-class time each week during a 16-week semester. I would encourage all of you to do all assigned homework and practice extra problems.Homework assignmentsIf you do not attempt to complete the assigned homework, it is likely that your performance in the course will suffer. It is expected that homework assignments will be completed prior to the start of class. The answers need not be correct. Homework will be evaluated as complete if all parts of the assignment have been attempted and all work is shown. Assignments will be collected at the beginning of class and late assignments will not be accepted.Quizzes and ExaminationsThere will be one or two quizzes during the semester. Quizzes may or may not be announced in advance. Quizzes will test your knowledge of both concepts and the application of those concepts. The examination contains a mix of objectives and longer type questionsconsist of questions utilizing the application of critical thinking.Grading schemeA+ (100-97, Superior) A (96-93) A-(92-90)B+ (89-87) B (86-83, Good) B- (82-80)C+ (79-75) C (74-70, competent) C- (69-67)D+ (66-63) D (62-60) F = failure (59and below) Academic dishonestyAny student caught cheating on homework assignments or tests will receive an automatic grade of zero on that assignment. A second violation will result in disciplinary action in accordance with university policy. Any type of cheating on the midterm or final exam will result in a nullification of the exam paper.Classroom PolicyNo cell phones.No textbook no class!No smoking.No drowsing.No chatting and whispering.Participate actively.Course ScheduleCourse outlineChapter 1 Financial management and financial objectivesFinancial management function1 The nature and purpose of financial management(a) Explain the nature and purpose of financial management.(b) Explain the relationship between financial management and financial and management accounting.2 Financial objectives and the relationship with corporate strategy(a) Discuss the relationship between financial objectives, corporate objectivesand corporate strategy.(b) Identify and describe a variety of financial objectives, including:(i) Shareholder wealth maximization(ii) Profit maximization(iii) Earnings per share growth3 Stakeholders and impact on corporate objectives(a) Identify the range of stakeholders and their objectives.(b) Discuss the possible conflict between stakeholder objectives.(c) Discuss the role of management in meeting stakeholder objectives,including the application of agency theory.(d) Describe and apply ways of measuring achievement of corporate objectivesincluding:(i) Ratio analysis, using appropriate ratios such as return on capital employed,return on equity, earnings per share and dividend per share(ii) Changes in dividends and share prices as part of total shareholder return(e) Explain ways to encourage the achievement of stakeholder objectives,including:(i) Managerial reward schemes such as share options and performance-relatedpay(ii) Regulatory requirements such as corporate governance codes of bestpractice and stock exchange listing regulations4 Financial and other objectives in not for profit organizations(a) Discuss the impact of not for profit status on financial and other objectives.(b) Discuss the nature and importance of value for money as an objective in notfor profit organizations.(c) Discuss ways of measuring the achievement of objectives in not for profitorganizations.Key teaching pointsFinancial management functionFinancial and other objectives in not for profit organizationsExam guideThe material in this chapter is examinable as an entire discussion question or as a question involvingcalculations such as ratios and discussion. When doing a ratio analysis question, you must make sure you apply your answer to the organization in the question. The organization will not necessarily be a publicly quoted company with shareholders. AssignmentSee Revision Kit 2016,BPP Learning MediaSection A Questions1-5 MCQ bank – Financial management and financial objectivesSection B Questions 16-20 ABC CoChapter 2 The economic environment for businessThe economic environment for business(a) Identify and explain the main macroeconomic policy targets.(b) Define and discuss the role of fiscal, monetary, interest rate and exchangerate policies in achieving macroeconomic policy targets.(c) Explain how government economic policy interacts with planning anddecision-making in business.(d) Explain the need for, and the interaction with, planning and decision-makingin business of:(i) Competition policy(ii) Government assistance for business(iii) Green policies(iv) Corporate governance regulationKey teaching points(a) Identify and explain the main macroeconomic policy targets.(b) Define and discuss the role of fiscal, monetary, interest rate and exchangerate policies in achieving macroeconomic policy targets.(c) Explain how government economic policy interacts with planning anddecision-making in business.Exam guideThe emphasis in the exam will be on discussing how economic conditions or policies affect particular businesses, for example the impact of a change in interest rates.Assignment21-35 MCQ bank – Financial management environment36-40 CBE style OTQ bank – Financial management environmentChapter 3 Financial markets, money markets and institutions1 The nature and role of financial markets and institutions(a) Identify the nature and role of money and capital markets, both nationallyand internationally.(b) Explain the role of financial intermediaries.(c) Explain the functions of a stock market and a corporate bond market.(d) Explain the nature and features of different securities in relation to therisk/return tradeoff.2 The nature and role of money markets(a) Describe the role of the money markets in:(i) Providing short-term liquidity to the private sector and the public sector(ii) Providing short-term trade finance(b) Explain the role of banks and other financial institutions in the operation ofthe money markets.(c) Explain the characteristics and role of the principal money-marketinstruments:(i) Interest-bearing instruments(ii) Discount instruments(iii) Derivative productsKey teaching pointsExplain the role of financial intermediaries.The nature and role of money marketsExplain the characteristics and role of the principal money-marketInstrumentsExam guideYou are unlikely to be asked a whole longer question on financial markets and institutions. You might,however, be asked a part question or Section A multiple choice question that relates to the circumstances of a particular company, for instance how they could raise funds using a stock market.AssignmentChapter end quick quizChapter 4 Working capital1 The nature, elements and importance of working capital(a) Describe the nature of working capital and identify its elements.(b) Identify the objectives of working capital management in terms of liquidity andprofitability, and discuss the conflict between them.(c) Discuss the central role of working capital management in financial management.2 Management of inventories, accounts receivable, accounts payable and cash(a) Explain the cash operating cycle and the role of accounts payable and accounts receivable.(b) Explain and apply relevant accounting ratios, including:(i) Current ratio and quick ratio(ii) Inventory turnover ratio, average collection period and average payable period (iii) Sales revenue/net working capital ratioKey teaching pointsAll are very importantExam guideWorking capital is highly examinable. Questions are likely to be a mixture of calculations and discussion. Always make sure your discussion and explanations are applied to the specific organization in the question.AssignmentSection A Questions41-45 MCQ bank – Working capital80 Wobnig Co (6/12, amended) (a)Chapter 5 Managing working capital1 Management of inventories, accounts receivable, accounts payable and cash(a) Discuss, apply and evaluate the use of relevant techniques in managing inventory,including the economic order quantity model and Just-in-Time techniques.(b) Discuss, apply and evaluate the use of relevant techniques in managing accountsreceivable, including:(i) Assessing creditworthiness(ii) Managing accounts receivable(iii) Collecting amounts owing(iv) Offering early settlement discounts(v) Using factoring and invoice discounting(vi) Managing foreign accounts receivable(c) Discuss and apply the use of relevant techniques in managing accounts payable, including:(i) Using trade credit effectively(ii) Evaluating the benefits of discounts for early settlement and bulk purchase (iii) Managing foreign accounts payableKey teaching pointsDiscuss, apply and evaluate the use of relevant techniques in managing inventory Discuss and apply the use of relevant techniques in managing accounts payable Exam guideQuestions in this area are likely to be a mixture of calculations and discussion. The material in this chapter is highly examinable.Assignment46-55 CBE style OTQ bank – Managing working capital78 WQZ Co (12/10, amended)79 Bold Co (12/11, amended)Chapter 6 Working capital finance1 Management of inventories, accounts receivable, accounts payable and cash(a) Explain the various reasons for holding cash, and discuss and apply the use ofrelevant techniques in managing cash, including:(i) Preparing cash flow forecasts to determine future cash flows and cash balances(ii) Assessing the benefits of centralized treasury management and cash control (iii) Cash management models, such as the Baumol model and the Miller-Orr model(iv) Investing short-term2 Determining working capital needs and funding strategies(a) Calculate the level of working capital investment in current assets and discuss thekey factors determining this level, including:(i) The length of the working capital cycle and terms of trade(ii) An organization's policy on the level of investment in current assets(iii) The industry in which the organization operates(b) Describe and discuss the key factors in determining working capital funding strategies, including:(i) The distinction between permanent and fluctuating current assets(ii) The relative cost and risk of short-term and long-term finance(iii) The matching principle(iv) The relative costs and benefits of aggressive, conservative and matching funding policies(v) Management attitudes to risk, previous funding decisions and organization size Key teaching points(a) Explain the various reasons for holding cash, and discuss and apply the use ofrelevant techniques in managing cash, including:(i) Preparing cash flow forecasts to determine future cash flows and cash balances(ii) Assessing the benefits of centralized treasury management and cash control (iii) Cash management models, such as the Baumol model and the Miller-Orr modelDescribe and discuss the key factors in determining working capital funding strategies Exam guideThe material covered in this chapter is again highly examinable. Any of the calculations could form part or all of a question and you also need to be able to explain the meaning of your answers.Assignment56-60 CBE style OTQ bank – Working capital finance80 Wobnig Co (6/12, amended) (b)84 Widnor Co (6/15, amended)Chapter 7 Investment decisions1 Investment appraisal techniques(a) Identify and calculate relevant cash flows for investment projects.(b) Calculate payback period and discuss the usefulness of payback as an investmentappraisal method.(c) Calculate return on capital employed (accounting rate of return) and discuss itsusefulness as an investment appraisal method.Key teaching pointsAll are very important as this chapter is a core area of this course.Exam guideYou should be able to use the techniques covered in this chapter, you may be asked to discuss their drawbacks. You must be able to apply your knowledge.Assignment85-94 MCQ bank – Investment decisionsChapter 8 Investment appraisal using DCF methods1 Investment appraisal techniques(a) Calculate net present value and discuss its usefulness as an investment appraisal method.(b) Calculate internal rate of return and discuss its usefulness as an investment appraisal method.(c) Discuss the superiority of DCF methods over non-DCF methods.(d) Discuss the relative merits of NPV and IRR.Key teaching pointsAll are very important as this chapter is a core area of this course.Exam guideYou may be asked to discuss the relative merits of the various investment appraisal techniques as well as to demonstrate your ability to apply the techniques themselves. Assignment95-104 MCQ bank – Investment appraisal using DCFChapter 9 Allowing for inflation and taxation1 Allowing for inflation and taxation in investment appraisal(a) Apply and discuss the real terms and nominal terms approaches to investment appraisal.(b) Calculate the taxation effects of relevant cash flows, including the tax benefits ofcapital allowances and the tax liabilities of taxable profit.(c) Calculate and apply before- and after-tax discount rates.Key teaching pointsAll are very important as this chapter is a core area of this course.Exam guideAs well as bringing inflation into your DCF calculations, you may be asked to explain the differences between real and nominal rates. In a long question, you can expect to have to deal with inflation, tax and working capital in an NPV question. Assignment105-114 MCQ bank – Allowing for tax and inflation146 Project E (6/14, amended)152 Uftin Co (12/14, amended)Chapter 10 Project appraisal and risk1 Investment appraisal process techniques(a) Calculate discounted payback and discuss its usefulness as an investment appraisal method.2 Adjusting for risk and uncertainty in investment appraisal(a) Describe and discuss the difference between risk and uncertainty in relation toprobabilities and increasing project life.(b) Apply sensitivity analysis to investment projects and discuss the usefulness ofsensitivity analysis in assisting investment decisions.(c) Apply probability analysis to investment projects and discuss the usefulness ofprobability analysis in assisting investment decisions.(d) Apply and discuss other techniques of adjusting for risk and uncertainty ininvestment appraisal, including:(i) Simulation(ii) Adjusted paybackKey teaching pointsCalculate discounted payback and discuss its usefulness as an investment appraisal method.Apply sensitivity analysis to investment projects and discuss the usefulness of sensitivity analysis in assisting investment decisions.Apply probability analysis to investment projects and discuss the usefulness of probability analysis in assisting investment decisions.Exam guideRisk and uncertainty are increasingly examinable in financial management exams andsensitivity calculations are particularly important. You will need to be able to explain these techniques as well as be confident and competent with the calculations. Assignment115-119 CBE style OTQ bank – Project appraisal and risk130-134 Sensitivity analysisChapter 11 Specific investment decisionsSpecific investment decisions (lease or buy; asset replacement; capital rationing) (a) Evaluate leasing and borrowing to buy using the before- and after-tax costs of debt.(b) Evaluate asset replacement decisions using equivalent annual cost and equivalent annual benefit.(c) Evaluate investment decisions under single period capital rationing, including: (i) The calculation of profitability indexes for divisible investment projects(ii) The calculation of the NPV of combinations of non-divisible investment projects Key teaching pointsAll are very important as this chapter is a core area of this course.Exam guideYou may be asked to calculate the results of different options and careful, methodical workings will be essential. These calculations can be quite difficult and will need lots of practice.Assignment120-129 CBE style OTQ bank – Specific investment decisions145 Calvic Co147 AGD Co (FMC, 12/05, amended)Chapter 12 Sources of finance1 Sources of and raising business finance(a) Identify and discuss the range of short-term sources of finance available to businesses, including:(i) Overdraft(ii) Short-term loan(iii) Trade credit(iv) Lease finance(b) Identify and discuss the range of long-term sources of finance available tobusinesses, including:(i) Equity finance(ii) Debt finance(iii) Lease finance(iv) Venture capital(c) Identify and discuss methods of raising equity finance, including:(i) Rights issue(ii) Placing(iii) Public offer(iv) Stock exchange listing(d) Identify and discuss methods of raising short- and long-term Islamic finance, including:(i) Major difference between Islamic finance and the other forms of business finance(ii) The concept of riba (interest) and how returns are made by Islamic financial securities(iii) Islamic financial instruments available to businesses, including:(i) Murabaha (trade credit)(ii) Ijara (lease finance)(iii) Mudaraba (equity finance)(iv) Sukuk (debt finance)(v) Musharaka (venture capital)Key teaching pointsIdentify and discuss methods of raising equity financeIdentify and discuss methods of raising short- and long-term Islamic financeExam guideSources of finance are a major topic. You may be asked to describe appropriate sources of finance for a particular company, and also discuss in general terms when different sources of finance should be utilized and when they are likely to be available.Assignment154-158 MCQ bank – Sources of finance147 AGD Co (FMC, 12/05, amended)199 Bar Co (12/11, amended)Chapter 13 Dividend policy1 Sources of and raising business finance(a) Identify and discuss internal sources of finance, including:(i) Retained earnings(ii) Increasing working capital management efficiency(iii) The relationship between dividend policy and the financing decision(iv) The theoretical approaches to, and the practical influences on, the dividend decisions, including legal constraints, liquidity, shareholding expectations andalternatives to cash dividendsKey teaching pointsIdentify and discuss internal sources of finance(i) Retained earnings(ii) Increasing working capital management efficiencyExam guideThis chapter is likely to be examined as a discussion question, perhaps combined with ratio analysisAssignment159-163 MCQ bank – Dividend policyChapter 14 Gearing and capital structure1 Sources of finance and their relative costs(c) Identify and discuss the problem of high levels of gearing.(d) Assess the impact of sources of finance on financial position, financial risk and shareholder wealth using appropriate measures, including:(i) Ratio analysis using statement of financial position gearing, operational and financial gearing, interest coverage ratio and other relevant ratios(ii) Cash flow forecasting(iii) Leasing or borrowing to buy2 Finance for small and medium-sized entities (SMEs)(a) Describe the financing needs of small businesses.(b) Describe the nature of the financing problem for small businesses in terms of the funding gap, the maturity gap and inadequate security.(c) Explain measures that may be taken to ease the financing problems of SMEs, including the responses of government departments and financial institutions.(d) Identify and evaluate the financial impact of different sources of finance for SMEs, including sources already referred to in syllabus section E1, and also:(i) Business angel financing(ii) Government assistance(iii) Supply chain financing(iv) Crowdfunding/peer to peer fundingKey teaching pointsRatio analysis using statement of financial position gearing, operational and financial gearing, interest coverage ratio and other relevant ratiosFinance for small and medium-sized entities (SMEs)Exam guideYou may be asked to explain the implications of different financing decisions on investment opportunities and the company's continued health. Capital structure is a significant topic in this exam and can be examined in conjunction with a number of other areas.Assignment164-173 MCQ bank – Gearing and capital structureChapter 15 The cost of capital1 Estimating the cost of capital(a) Estimate the cost of equity including:(i) Application of the dividend growth model and discussion of its weaknesses(ii) Explanation and discussion of systematic and unsystematic risk(iii) Relationship between portfolio theory and the capital asset pricing model(CAPM)(iv) Application of the CAPM, its assumptions, advantages and disadvantages (b) Estimating the cost of debt:(i) Irredeemable debt(ii) Redeemable debt(iii) Convertible debt(iv) Preference shares(v) Bank debt(c) Estimating the overall cost of capital including: 2(i) Distinguishing between average and marginal cost of capital(ii) Calculating the weighted average cost of capital (WACC) using book value and market value weightings2 Sources of finance and their relative costs(a) Describe the relative risk-return relationship and describe the relative costs of equity and debt.(b) Describe the creditor hierarchy and its connection with the relative costs of sources of finance.Key teaching pointsAll are very important as this chapter is a core area of this course.Exam guideIn the exam you may be asked to calculate the weighted average cost of capital and its component costs, either as a separate sub-question, or as part of a larger question, most likely an investment appraisal. Remember that questions won't just involve calculations; you may be asked to discuss the problems with the methods of calculation you've used or the relevance of the costs of capital to investment decisions.Assignment174 -183 CBE style OTQ bank – The cost of capital201 NN Co (12/10, amended)202 AQR Co (6/11, amended)203 BKB Co (12/12, amended)Chapter 16 Capital structure1 Sources of finance and their relative costs(a) Impact of cost of capital on investments including:(i) The relationship between company value and cost of capital(ii) The circumstances under which WACC can be used in investment appraisal (iii) The advantages of the CAPM over WACC in determining a project-specific cost of capital(iv) Application of CAPM in calculating a project-specific discount rate2 Capital structure theories and practical considerations(a) Describe the traditional view of capital structure and its assumptions.(b) Describe the views of Miller and Modigliani on capital structure, both without andwith corporate taxation, and their assumptions.(c) Identify a range of capital market imperfections and describe their impact on theviews of Miller and Modigliani on capital structure.(d) Explain the relevance of pecking order theory to the selection of sources of finance.Key teaching pointsAll are very important as this chapter is a core area of this course.Exam guideThe theories covered in this chapter could be needed in a discussion part of a question. Gearing andungearing a beta is an essential technique to master using the formula which will be given to you in the exam.Assignment184- 193 CBE style OTQ bank – Capital structure204 Fence Co (6/14, amended)205 Tinep Co (12/14, amended)Chapter 17 Business valuations1 Nature and purpose of the valuation of business and financial assets(a) Identify and discuss reasons for valuing businesses and financial assets.(b) Identify information requirements for valuation and discuss the limitations ofdifferent types of information.2 Models for the valuation of shares(a) Asset-based valuation models, including:(i) Net book value (statement of financial position basis)(ii) Net realisable value basis(iii) Net replacement cost basis(b) Income-based valuation models, including:(i) Price/earnings ratio method(ii) Earnings yield method(c) Cash flow based valuation models, including:(i) Dividend valuation model and the dividend growth model(ii) Discounted cash flow basis3 The valuation of debt and other financial assets(a) Apply appropriate valuation methods to:(i) Irredeemable debt(ii) Redeemable debt(iii) Convertible debt(iv) Preference sharesKey teaching pointsModels for the valuation of sharesThe valuation of debt and other financial assetsAssignment207-216 MCQ bank – Business valuations222-226 Phobis Co (12/07, amended)Chapter 18 Market efficiency1 Efficient market hypothesis (EMH) and practical considerations in the valuation of shares(a) Distinguish between and discuss weak form efficiency, semi-strong formefficiency and strong form efficiency.(b) Discuss practical considerations in the valuation of shares and businesses, including:(i) Marketability and liquidity of shares(ii) Availability and sources of information(iii) Market imperfections and pricing anomalies(iv) Market capitalization(c) Describe the significance of investor speculation and the explanations of investor decisions offered by behavioral finance.Key teaching pointsDistinguish between and discuss weak form efficiency, semi-strong form efficiency and strong form efficiency.Discuss practical considerations in the valuation of shares and businessesExam guideMarket efficiency may need to be discussed as part of a business valuation question. Assignment217-221 CBE style OTQ bank – Market efficiencyChapter 19 Foreign currency risk1 The nature and role of money market(a) Describe the role of money markets in:(i) Allowing an organization to manage its exposure to foreign currency risk and interest rate risk2 The nature and types of risk and approaches to risk management(a) Describe and discuss different types of foreign currency risk:(i) Translation risk(ii) Transaction risk(iii) Economic risk3 Causes of exchange rate differences and interest rate fluctuations(a) Describe the causes of exchange rate fluctuations, including:(i) Balance of payments(ii) Purchasing power parity theory(iii) Interest rate parity theory(iv) Four-way equivalence(b) Forecast exchange rates using:(i) Purchasing power parity(ii) Interest rate parity4 Hedging techniques for foreign currency risk(a) Discuss and apply traditional and basic methods of foreign currency risk management, including:(i) Currency of invoice(ii) Netting and matching。