Formulas For Exam 2 - Summer

Formulas for Exam 2

FVn = PV (1 + i )n = PV(FVIF i, n) PV =

FV (1 + i) n

= FV(PVIF i, n)

FVA = PMT(FVIFA i, n) PVA = PMT(PVIFA i, n)

PV =

PMT i

EAR = (1 +

i nominal m ) −1 m

PV = PMT(PVIFA k d , N ) + FV(PVIFk d , N ) PV =

PMT (PVIFA k d /2 , N(2) ) + FV(PVIFk d /2 , N(2) ) 2

PV = PMT(PVIFA k d , Nc ) + Call Price(PVIFk d , N c ) PV =

PMT (PVIFA k d / 2 , Nc(2) ) + Call Price(PVIFk d / 2 , Nc(2) ) 2

CY = PMT / PV CGY = YTM - CY D1 = D0 (1 + g)

Pˆ0 =

D 0 (1 + g) D1 = ks − g ks − g

D kˆ s = 1 + g P0 Pˆ0 =

D3 D1 D2 (D + Pn ) + + + ... + n 1 2 3 (1 + k s ) (1 + k s ) (1 + k s ) (1 + k s ) n

k s = k RF + (k M − k RF )b D Pˆp = p kp D kˆ p = p Pp kp =

Dp Pn

Formulas for Exam 2

ks =

D1 +g P0

ke =

D1 +g Pn

Breakpoint = Retained Earnings available for investment wc WACC1 = wdkd(1 - T)+ wpkp + wcks WACC2 = wdkd(1 - T)+ wpkp + wcke