Master Formula Sheet

# Master Formula Sheet - Master Formula Sheet Exam#1...

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Unformatted text preview: Master Formula Sheet Exam #1: Formulas #1-#21 Exam #2: Formulas #1-#29 Exam #3: Formulas #1-#34 Exam #4: Formulas #1-#38 1. € 2. ȹ ȹ CF ȹ 1 ȹ ȹ ȹ ȹ CF ȹ 1 ȹ ȹ 1 1− (1 + r) N r (1 + r) N r −1 ȹ ȹ ȹ ȹ ȹ Ⱥ ȹ ȹ ȹ Ⱥ 3. CF 1 r-g if r > g 4. CF1 r -g ȹ ȹȹ ȹ ȹ 1 ȹȹ CFN+1 ȹ = ȹ N ȹ ȹ (1 + r) Ⱥȹ r − g Ⱥ € € € Ⱥ Ⱥ ȹ 1 + g ȹN Ⱥ CF1 Ⱥ 1 - ȹ ȹ r - g Ⱥ ȹ 1 + r Ⱥ Ⱥ Ⱥ Ⱥ Ⱥ Ⱥ if r > g 2 5. Rich Curtis’ “Finance” Notes p ȹ APRȹ EAR = ȹ 1 + ȹ - 1 p Ⱥ ȹ 6. € D 7. € = ΔP 0 Δy ȹ ȹ CF1 ȹ ȹ ȹ ȹ ȹ ȹ (1 + y) Ⱥ ȹ ȹ ȹ( 1 ) ȹ P0 ȹ ȹ ȹ ȹ Ⱥ ≈ € 9. 1+ y € € € D ≡ Modified ΔP 0 P 0 ≈ + ... + -DP 0 € 8. + ȹ ȹ CF2 ȹ ȹ ȹ ȹ 2 ȹ ȹ (1 + y) Ⱥ ȹ ȹ ȹ( 2 ) ȹ P0 ȹ ȹ ȹ ȹ Ⱥ D if coupons are paid annually 1+ y -D Δy if coupons are paid annually Modified 10. P= 0 CF CF CF 1+ 2 + ... + T 2 1+ y (1+ y) (1+ y) T 11. P= 0 CF CF CF 1+ 2 T + ... + 2 1+ r (1+ r ) (1+ r ) T 0,1 0,2 0,T ȹ ȹ CFT ȹ ȹ ȹ ȹ T ȹ ȹ (1 + y) Ⱥ ȹ ȹ ȹ( T ) ȹ P0 ȹ ȹ ȹ ȹ Ⱥ Master Formula Sheet 3 12. CF1 P= 0 1+ r0,1 + CF2 ( 1+ r0,1)( 1+ f1,2) + CF3 ( 1+ r0,1)( 1+ f1,2)( 1+ f2,3) + ... + CFT ( 1+ r0,1)( 1+ f1,2)( 1+ f2,3) ... ( 1+ fT-1,T) €13. r =r + h + hr nominal real real ≈r +h real € 14. € 15. € 16. € 17. € D 1 ke - g P= 0 P 0 E 1 if k > g e = 1- b ke - g = (1- b)(1+ g) ke - g P 0 E 0 ke = D 1 +g P 0 if k > g e if k > g e 4 Rich Curtis’ “Finance” Notes 18. g = ρb 19. Free Cash Flow tp Common = + - + - Enterprise Value Value of Non-Operating Assets + 21. NOPAT Depreciation & Amortization Increases in Non-Cash Operating Working Capital Capital Expenditures + 20. Net Income Depreciation & Amortization Increases in Non-Cash Operating Working Capital Capital Expenditures Preferred Dividends PV of Free Cash Flows to the Firm Value of Non-Operating Assets Free Cash Flow to the Firm = Firm Value = = 22. = [Return on total capital – Cost of Capital] x Capital = [ρ– WACCat] x Capital = 23. EVA X(1-tc) - [WACCat x Capital] NI = [ (P − v)Q − FC − D ] [ 1 − tc ] €24. OCF = [ (P − v)Q − FC ] [ 1 − t ] + t D c c = [ (P − v)Q − FC − D ] [ 1 − t ] + D c € Master Formula Sheet 25. Q= OCF − tc D + FC 1 − tc P− v € 26. € 27. € 28. 29. € 30. Degree of Operating Leverage = 2 σp = % Change in OCF % Change in Q 2 2 2 w 2 σ A + w 2σ B + w 2σ C A B C + 2w A w Bσ A,B + 2w A w Cσ A,C + 2w Bw Cσ B,C σA,B = ρA,B σA σB Ⱥ ȹ B ȹȺ βL = βU Ⱥ1 + 1 - tc ȹ ȹȺ ȹ SL ȺȺ Ⱥ ( ) ȹ B ȹ ȹ ȹ ke (L) = ke (0) + [k (0) - ki (L)] ȹ L ȹ e ȹ S ȹ ȹ L Ⱥ if tc = 0 and WACC = k (0) at e € € 31. ke (L) = ke (0) + [ ȹ (1- t )B ȹ c L ȹ ke (0) − ki (L) ȹ ȹ SL ȹ ȹ Ⱥ and € Ⱥ t B Ⱥ Ⱥ Ⱥ WACC = k (0) Ⱥ 1 - c L Ⱥ at e V Ⱥ Ⱥ Ⱥ L Ⱥ if tc > 0 € 5 6 32. € 33. € 34. € 35. € 36. Rich Curtis’ “Finance” Notes VMAX = B = MAX P s,c − P s,x D EBIT ke (0) = Vu 1 - tc 1 − td 1 − tltg = Return on Equity = Net Income S/H' s Equity = Net Income Sales Assets x x Sales Assets S/H' s Equity E P =P +P c,0 s,0 p,0 (1+ r )τ f ȹ ȹ E ȹ P = P N(d ) - ȹ ȹ (1+ r )τ ȹ N(d2 ) c,0 s,0 1 ȹ f Ⱥ where N(.) € = d1 € = d2 = the Normal distribution function, ȹ P ȹ ȹ σ 2 ȹ ȹ τ ln ȹ s ,0 ȹ + ȹ r + ȹ E ȹ ȹ f 2 ȹ ȹ Ⱥ ȹ Ⱥ στ d -σ τ 1 € 37. € € € € Futures Price τ (1+ rf ) = Spot Price - PV(Dividends or Interest Forgone) 38. Futures Price (1+ rf )τ = Spot Price + PV(Storage Costs) - PV(Convenience Yield) ...
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