{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Formulas

# Formulas - Formulas Future value and present value n FV =...

This preview shows pages 1–2. Sign up to view the full content.

Formulas: Future value and present value: FV = PV ° (1 + i ) n ; PV = FV (1 + i ) n Non-annual compounding and e/ective annual interest rate: FV = PV ° ° 1 + i m ± m ° n ; Eff:Int:Rate = ° 1 + i m ± m ± 1 Present value and future value of an (ordinary) annuity: PV = PMT ° ( 1 ± 1 (1+ i ) n i ) ; FV = PMT ° ² (1 + i ) n ± 1 i ³ PV (or FV) of Annuity Due: (1 + i ) ° PV ( or FV ) of ordinary annuity : Present value of a perpetuity and a growing perpetuity: PV = PMT i ; PV = PMT i ± g Price of an n -period zero-coupon bond ( FV : face value; y : yield to maturity): P 0 = FV (1 + y ) n Price of an n -period coupon bond ( PMT : coupon; FV : face value; y : yield to maturity): P 0 = n X t =1 PMT (1 + y ) t ! + FV (1 + y ) n Market value of a stock ( ^ D t : expected amount of dividend at t ; r is the stock°s required rate of return): P 0 = 1 X t =1 ^ D t (1 + r ) t : Gordon°s constant dividend growth model: P 0 = ^ D 1 r ± g : Expected return on a portfolio, ° R p : ° R p = n X i =1 w i ° ° r i ; n X i =1 w i = 1 : CAPM formula (Security Market Line formula) ° R i = R f + ° i ´ ° R m ± R f µ ; ° i = Cov ~ R i ; ~ R m · V ar ~ R m · = ± i

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}