Math 5621 (369) Financial Mathematics II

(Applied Mathematics of Corporate Finance)


Fall 2010

Instructor James G. Bridgeman

instructor's web site

syllabus for the course

Opportunity Cost of Capital and WACC


The solution manual has an error for exercise 5.14 part (b). A hint for the correct solution: when you sell something short you get cash in return.


Papers due 5 PM Monday 12-13, in my mailbox, under my office door, or by email.


Here is the Final Exam.

Here are the Solutions and Solution Spreadsheet

Grades have been posted. Here is the Grading Worksheet

Cumulative assignments (most recent assignment at top)


Read ch. 9 for background

Do exercises 16.1, 16.5, 16.6, 16.7, 16.8 and 16.10

Study sections 16A-D and 16G

Study sections 7G, H, and I and read 7J and 7K for background

Do exercises 15.1-15.9, 15.11-15.15, 15.17-15.18, and 15.20-15.21

Read for background 15K-L

Study Section 14C and Sections 15A-15J

Study ch. 13B and do exercises 13.1-13.5

Read ch. 12 and 13A and 13C for background

Do exercises 11.1, 11.3, 11.4, 11.8, and 11.9

Study Chapter 11 sections A, D, E, F and G (read the other sections for background only)

Do exercises 10.1, 10.2, 10.5, 10.6, 10.8

Study Chapter 10, sections A, C, E, and F (read the other sections for background only)

Submit a topic for your paper

Do exercises 6.2-6.18, 6.21

Study Chapter 6

Do exercises 5.3-5.7, 5.9-5.11, and 5.13-5.14; make sure you understand exercise 5.8 (but no need to prove)

Study Chapter 5 

Read chapters 3 and 4 only for background

Do exercises 14.1 thru 14.5

Study Chapter 14, section B keep connections with financial analysis statement handout, chapter 2 and chapter 14A in mind.

Work out formulas like 14A but without assuming that depreciation equals investment required to maintain prior investments

Study Chapter 7, sections A-E

Study Chapter 14, section A keep in mind the connections with chapter 2 and with financial statements

Do exercises 2.1 thru 2.11

Study Chapter 2 C-H

Study Opportunity Cost of Capital and WACC (download it just above)

Read for background Chapter 1 and Chapter 2, sections A and B

Study the financial statement analysis handout, do all Quiz questions, Practice Qu. 4,7,8,9,10 and Challenge Qu. 1

(the quiz solutions are in the handout; the PQ and CQ solutions are here.)