• Explain the basic valuation model to value bonds/debentures, preference shares and equity shares
• Apply the basic valuation model to bonds/debentures to evaluate the relationship between both required return and time to maturity and bond values
• Explain yield-to-maturity (YTM), its calculation and the procedure used to value bonds that pay interest semi-annually
• Discuss the valuation of perpetual and redeemable preference shares applying the basic valuation model
• Understand basic share valuation under each of three cases—zero growth, constant growth and variable growth
• Discuss three other approaches—book value, liquidation value and price-earnings/multiple—that are used to estimate shares values
• Review the relationship between the impact of financial decisions on both expected return and risk and their combined effect on the value of a firm
