Formula Book FIN 2210

Of equity equitynet incomeequity cost of equity

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Unformatted text preview: income Sales Total assets   = Sales Total assets Total common equity Market=Book ðM=BÞ = EVA = Net income – ½Equity  Cost of equityŠ = ðEquityÞ½Net income=Equity – Cost of equityŠ = ðEquityÞðROE – Cost of equityÞ Appendix C Selected Equations and Tables C HAPTER 5 Future value = FVN = PVð1 + IÞN Present value = PV = FVN ð1 + I ÞN FVAN = PMTð1 + IÞN-1 + PMTð1 + IÞN-2 + PMTð1 + IÞN-3 + . . . + PMTð1 + IÞ0 " # ð1 + IN − 1 = PMT I FVA due = FVAordinary ð1 + IÞ PVAN = PMT=ð1 + IÞ1 + PMT=ð1 + IÞ2 + . . . + PMT=ð1 + IÞN 2 13 1− 6 ð1 þ IÞN 7 7 = PMT6 5 4 I PVA due = PVAordinary ð1 + IÞ PMT I PV of a perpetuity = PV = N X CFt CFN CF2 CF1 + + ... + = t ð1 + IÞ1 ð1 + IÞ2 ð1 + IÞN t = 1 ð1 + IÞ Periodic rate ðIPER Þ = Stated annual rate = I=M Number of payments per year Number of periods = ðNumber of yearsÞðPeriods per yearÞ = NM   INOM M Effective annual rate ðEFF%Þ = 1 + − 1:0 M CHAPTER 6 Quoted interest rate ðrÞ = r* + IP + DRP + LP + MRP = rRF + DRP + LP + MRP rT-bill = rRF = r* + IP rT-bond = r*t + IPt + MRPt rC-bond = r*t + IPt + MRPt + DRPt + LPt rRF with cross-product term = r* + IP + ðr*  IPÞ CHAPTER 7 INT M INT INT ... + + N 1+ 2+ ð 1 + rd Þ ð 1 + rd Þ N ð 1 + rd Þ ð 1 + rd Þ N X INT M = + ð 1 + rd Þ t ð 1 + r d Þ N t=1 Bond’s value = VB = Price of callable bond = VB ¼ 2N X t=1 N X INT Call price t+ ð 1 + rd Þ N t = 1 ð1 + rd Þ INT=2 M + ð1 + rd =2Þt ð1 + rd =2Þ2N 1 N...
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This document was uploaded on 02/09/2014.

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