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Plan for today (13 July) Introduce time value of money (TVM) by illustrating how TVM can help us understand why maximizing shareholder wealth is an appropriate.

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Presentation on theme: "Plan for today (13 July) Introduce time value of money (TVM) by illustrating how TVM can help us understand why maximizing shareholder wealth is an appropriate."— Presentation transcript:

1 Plan for today (13 July) Introduce time value of money (TVM) by illustrating how TVM can help us understand why maximizing shareholder wealth is an appropriate corporate objective. Various examples of the 4 learning objectives for chapter 5 (see next page):

2 Chapter 5 Learning Objectives

3 How Financial Markets Reconcile Preferences for Current vs. Future Consumption

4

5 Simple TMV problems using Financial Calculator

6 Time value of Money in Excel

7 Rule of 72 from Khan Academy 7

8 Rule of 72 and its generalization See Rule of 72 Worksheet.Rule of 72 Worksheet

9 Future Value and Present Value Tables See http://bit.ly/tvmtables (password is “baylorbears”)http://bit.ly/tvmtables Next, go to http://bit.ly/tvmspreadsheet and replicate the information contained in http://bit.ly/tvmtables.http://bit.ly/tvmspreadsheet http://bit.ly/tvmtables

10 Summary of Time Value Calculations

11

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