Final Exam Review - Exam 1 Perpetuity o PV= PMTi o Type of...

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Exam 1 Perpetuity o PV= PMTi o Type of Question: How much is the person willing to pay for an investment? Holding Period Return o Ending Price - Beginning Price + DistributionsBeginning Pricex 100% o Distributions DividendsNumber of Shares Future Value Single Sum o FV = PV1+in Future value of an Ordinary Annuity o FVA = PMT x FVIFAi,n o Solve for payment Present Value of an Ordinary Annuity o PVA = PMT x PVIFAi,n o Solve for Payment Present Value Single Sum o PV = FV 1+in Value of money compared to another o Appreciated Amount Decreases o Depreciated Amount Increases Tax Liability o Taxable Income ($) o Tax Calculation o Up to 50,000 o $0 + (15% Amount over $0) o 50,001-75,000 o $7500 + (25% Amount over $50,000) o 75,001- 100,000 o $13,750 + (34% Amount over $75,000) o 100,001- 335,000 o $22,250 + (39% Amount over $100,000) o 335,001- 10,000,000 o $113,900 + (34% Amount over $335,000) o 10,000,001- 15,000,000 o $3,400,000 + (35% Amount over $10,000,000) o 15,000,001- 18,333,333 o $5,150,000 + (38% Amount over $15,000,000) o Over 18,333,333 o 35% X Taxable Income o Look at the amount and complete the equation o True False Way Table with every year and the taxable income Find a certain year, if negative year before you have to subtract starting from first year
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Average Tax Rate o Total Tax DueTaxable Income Marginal Tax Rate o Look in Table Payment o Beginning of each year o ( + ) Payment Per Year 1 Interest Rate Uneven Cash Flow o PV =t=1nCFt1+it Taxable Portion of Preferred Dividends Received
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This note was uploaded on 09/28/2011 for the course FINA 3332 taught by Professor Darlachisholm during the Spring '08 term at University of Houston.

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Final Exam Review - Exam 1 Perpetuity o PV= PMTi o Type of...

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