Chapter 1 - Time Value of Money
1.1	Money and Time
1.1.1	Present and future value
1.1.2	Computing present and future value
1.2	Future Value
1.2.1	Future value of single amount
1.2.2	Compounding more frequently than annually
1.2.3	Future value of an annuity
1.3	Present Value
1.3.1	Present value - first principles
1.3.2	Single cash flow
1.3.3	Present value of cash flow streams
1.3.4	Present value of an annuity
1.3.5	Present value of a perpetuity
1.3.6	Constantly growing perpetuity
1.4	Legal applications
	Problems

Chapter 2 - Risk and Return
2.1	Risk and Return Fundamentals
2.1.1	Returns
2.1.2	Risk
2.1.3	Risk aversion
2.1.4	Fair division procedure
2.1.5	Value of life
2.2	Risk of a Single Asset
2.2.1	Probability distribution
2.2.2	Expected return
2.2.3	Standard deviation
2.2.4	Normal distribution
2.2.5	Coefficient of variation
2.3	Risk of Multiple Assets (Portfolio Risk)
2.3.1	Portfolio theory
2.3.2	Covariance defined
2.3.3	Diversification
2.4	Relationship of Risk and Return
2.4.1	Valuing probability distributions
2.4.2	Valuing certainty equivalents
2.4.3	Adjusting discount rates
2.5	Capital Asset Pricing Model (CAPM)
2.5.1	CAPM basics
2.5.2	Theoretical basis of CAPM
2.5.3	Critique of CAPM
2.6	The Arbitrage Pricing Theory
	Problems

Chapter 3 - Accounting Basics and Reading Financial Statements
3.1	Introduction to Accounting
3.1.1	History of accounting
3.1.2	Accounting reports and GAAP
3.1.3	Accounting principles
3.1.4	Critique of current accounting practices
3.2	Balance Sheet
3.2.1	Balance sheet items
3.2.2	Balance sheet analysis
3.2.3	Accumulated retained earnings statement
3.3	Income Statement
3.3.1	Income statement items
3.3.2	Income statement analysis
3.3.3	Statement of cash flows
3.4	Financial Statements in Valuation
3.4.1	Book value
3.4.2	Cash flow
3.4.3	Comparables
	Problems

Chapter 4 - Securities Valuation
4.1	Business Valuation Fundamentals
4.1.1	Cash flow (returns)
4.1.2	Required return (discount rate)
4.1.3	Discounted cash flow (DCF) model
4.2	Bond Valuation
4.2.1	Bond fundamentals
4.2.2	Basic bond valuation
4.2.3	Behavior of bond values
4.2.4	Yield to maturity
4.3	Stock Valuation Basics
4.3.1	Characteristics of common stock
4.3.2	Basic stock valuation
4.3.3	Stock valuation experts
4.3.4	Corporate decision-making and stock value
4.3.5	Stockholders vs. bondholders
4.4	Options - Characteristics and Valuation
4.4.1	Option fundamentals
4.4.2	Basic option valuation
4.4.3	Option applications
4.4.4	Other derivatives
	Problems

Chapter 5 - Business Valuation
5.1	Business Valuation - Asset Methods
5.1.1	Book value
5.1.2	Adjusted book value
5.1.3	Liquidation (or salvage) value
5.1.4	Industry standard ratios
5.2	Business Valuation - Income Methods
5.2.1	Income method (capitalization of earnings)
5.2.2	Basic DCF formulas
5.2.3	Applying DCF formulas
5.2.4	Excess earnings method
5.3	Stock Valuation - Market Method
5.3.1	Public company ratios
5.3.2	Comparable private company sales
5.3.3	Valuation in the "new economy"
5.4	Discounts and Premia
5.4.1	Ownership interests - bundle of rights
5.4.2	Control premia
5.4.3	Minority discounts
5.4.4	Marketability discounts
5.4.5	Other sources of discounts
5.5	Common Errors
5.5.1	Normalize financials
5.5.2	Method chosen
5.5.3	Owner's compensation
5.5.4	Professional competence
5.6	Business Valuations in Legal Contexts
5.6.1	Estate tax
5.6.2	Corporate appraisal
5.6.3	Bankruptcy
5.6.4	Other
	Problems


©2003 Professor Alan R. Palmiter	This page was last updated on: February 24, 2005