Formula Book FIN 2210

1 r 1 1 r 2 1 r n n x cft t t 0 1 r npv

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Unformatted text preview: = rd – rd T = rd ð1 – TÞ Dp Component cost of preferred stock = rp = Pp Required rate of return = Expected rate of return r rs = rRF + RP = D1 =P0 + g = ^s rs = rRF + ðRPM Þbi = rRF + ðrM – rRF Þbi rs = Bond yield + Risk premium D1 D2 . . . + D∞ ∞ 1+ 2+ ð 1 + rs Þ ð 1 + rs Þ ð 1 + rs Þ ∞ X Dt = t t = 1 ð 1 + rs Þ P0 = P0 = D1 rs − g r rs = ^s = D1 + Expected g P0 Cost of equity from new stock = re = D1 +g P0 ð1 − FÞ Flotation Adjusted Pure = − adjustment DCF cost DCF cost Flotation Cost of =r + external equity s adjustment Retained earnings Addition to retained earnings for the year = breakpoint Equity fraction CHAPTER 11 CF1 CF2 CFN + + ... + ð 1 + rÞ 1 ð 1 + r Þ 2 ð 1 + rÞ N N X CFt = t t = 0 ð 1 + rÞ NPV = CF0 + 0 + + 10 1 % of Cost of @ common A@ common A equity equity w c rs C-5 C-6 Appendix C Selected Equations and Tables CF1 CF2 CFN + + ... + =0 ð1 + IRRÞ1 ð1 + IRRÞ2 ð1 + IRRÞN N X CFt t=0 t = 0 ð1 + IRRÞ N X CIFt ð1 + rÞN–t N X COFt t=0 t= ð1 + MIRRÞN t=0 ð1 + rÞ CF0 + PV costs = TV ð1 + MIRRÞN Payback = Number of years prior to full recovery + Unrecovered cost at start of year Cash flow during full recovery year CHAPTER 12 Taxes paid on sa...
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This document was uploaded on 02/09/2014.

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