cheatsheetforfinance - NetCapSpending Dividends:NI-Change...

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Cost of Equity: Re = Rf + Be(E(Rm)-Rf) Cost of Debt: Rd= I/Y given expected Return for MKT: subtract Rf given MKT Risk Premium: DO NOT subtract Rf PMT: FV*Coupon divide by 2 if semi-annual coupon FV ALWAYS = 1000 N: multiply by 2 if semi-annual I/Y= B4 tax debt = Rd After Tax Cost of Debt: I/Y*(1-Tc) E: MKT value of Equity= (# O/S shares)(Price per share) D: “ “ Debt= (# O/S shares)(Bond Price) no #: [(Face Value)(Bond Price)]/FV V: MKT Value of Firm= D + E Wght of Equity: E/V= % financed with Eq. Wght of Debt: D/V= % financed with Debt (E/V+D/V)= 1 Tbill = free risk rate WACC: [(E/V)*Re]+[(D/V)*Rd*(1-Tc) E,D,V Re, Rd(I/Y) Plug In Cost of Capital Stock(KCS): (D1/PCS)+G After Tax Cash Flow: EBIT+Dep-Taxes Cap. Spending: (EndNFA-BegNFA)+Dep what did the firm do regarding cap.spend? look at diff in Gross FA( inc:purchase; dec:sold) Cash Flow from Assets: (OI(orEBIT)+Dep-Tax)+ (ChangeCA-ChangeCL)-(EndFA-BegFA+Dep) OR After-tax cash flow from Operations: additions to NWC-
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Unformatted text preview: NetCapSpending Dividends:NI-Change in Ret Erngs Sales-COGS=GP-Oper.Exp=Oper.Income-Int.Exp=EBIT-Taxes=NI Return: (Pt-Py)/Py Variance: Return + Avg. Rtrn=Dev X2 = Dev^2 Tot. Dev^2/ #rtrns-1=Variance of Rtrns Std.Dev: square root of variance Tot value of Port: tot. invstmnt prices Port Beta: sum of all invstmnt prices * invstmnt weights Required Return: Rf + (Be)(MKT Risk Prem) Expected Return of Port: weight*Beta=%*expected mkt ret. Total Risk measured by Std Dev Systematic Risk and Expected Return measured by Beta same systematic risk as the MKT Beta=1 Inflation Rate Premium:1+krf=(1+k*)(1+IRP) Total risk for Diversified Port systematic risk Constant growth of a Dividend: P= [D(1+g)] / k-g D= div$ g=const grwth rate k=Req Rate of Ret Op. CF:EBIT-tax+dep EBIT: sales-VCandFC-dep Most to Least Risky Bonds: Sub, Jr, Sr, Debentures more than notes(mortgage)...
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This note was uploaded on 04/19/2008 for the course RESEARCH M 4333 taught by Professor Noname during the Spring '08 term at Texas Tech.

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