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Unformatted text preview: order to find the value of those multiple CFs at any point in time. Value at time k would be: FINC 322 Financial Management 1 Formulas for TVM, Bond and Stock Pricing, and Capital Budgeting (C. Lee) Where FV is the future value at time n PV is the present value at time 0, 0 < k < n Chapters 7 and 8: Bond and Stock Pricing • Bond Pricing ( “ m =2” ) or; Where = price of bond = semiannual coupon = face value = annual yield to maturity (YTM= r ; YTM/2= i ) where ACR is an annual coupon rate • Stock Pricing Constant Dividend Model Dividend Growth Model where g =growth rate R =required return (equivalent to i ) P i =stock price at time i ; , 0< j < n Chapter 9: Capital Budgeting Net Present Value (NPV) Internal Rate of Return (IRR) When you have a single cash outflow at t =0: At IRR, PV(CF inflow )=PV(CF outflow ) When you have a single cash outflow at t =0:...
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