BFIN 620 Exam 2 Formula Sheet NEW

BFIN 620 Exam 2 Formula Sheet NEW - where payout ratio =...

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Business Finance 620 Exam 2 Formula Sheet Basic PV – FV Formula: K r) (1 PV FV + = PV of Perpetuity: = r C PV of Growing Perpetuity: = g r C 1 (r = required return; g = perpetuity growth rate) PV of Annuity: = + n r) (1 1 r C 1 FV of Annuity: = (PV of Annuity) x ( ) n r 1 + = () [ ] 1 r 1 r C n + PV of Growing Annuity: = + + n r 1 g 1 g r C 1 FV of Growing Annuity: = + + g r g) (1 r) ( C n n 1 Effective Annual Rate (EAR): = K APR 1 K 1 + where K = # compounding periods per year Sustainable Growth Rate: = ROE (1 – payout ratio)
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Unformatted text preview: where payout ratio = DPS / EPS Real Rate of Return: 1 Rate Inflation 1 Rate Nominal 1 + + = Expected Return (CAPM): ) r (r beta r r f m f + = Variance of Returns: = = N 1 i 2 i 1-N Return) Average (Return (sum the squared deviations over all N returns in the data set and then divide by N-1 to obtain the average squared deviation) Standard Deviation of Returns: = Square root of the Variance of Returns...
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