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Study Guide

FIN/571 Version 7

Week 6 Study Guide: Applications of Finance


Readings and Key Terms

Ch. 19
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Financial and strategic planning


Pro forma financial statements
Percent of sales method
External funding needed (EFN)
Payout and plowback ratios
Internal and sustainable growth rate

Ch. 21 of Fundamentals of Corporate Finance


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Globalization
Multinational corporation
Transnational corporation
Country risk
Exchange rate
Spot rate
Forward rate
Exchange rate risk
Hedge
London Interbank Offer Rate (LIBOR)

Content Overview

International financial management


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Concepts
Identify and define various axioms of international finance, such as globalization, multinational companies, foreign exchange, spot rate, forward rate, LIBOR, and so on.
Calculate cross rates.
Calculate forward premium (Discount).
High-level understanding of exchange rate risk.

Note: Ch. 19 content is also referred to in this week. Be sure to review the Week 3 Study Guide to
reference Ch. 19 content.

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