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Finance Formulas

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Final Exam Formula Sheet
PVIFn,i 

=[
]
0

1
 (1  i ) -n n (1  i)

FVIFn,i  (1  i ) n

1⁄

[ ]
0
= ln⁡ 1 + )
(
1
FVIFA n,i  (1  i ) n  1 i 1
FVIFA - Duen,i  (1  i ) n  1 (1  i ) i t
(1  k t ) ft 
1
(1  k t-1 ) t-1

−1







1
1 - (1  i ) -n i 1
PVIFA - Duen,i  1 - (1  i ) -n (1  i ) i -in
PV  FVe
PVIFA n,i 







m

i 

EIR  1    1 m 

= [1 + (

 i j  1  
 2

+−

)]
⁡⁡



365⁄
⁡⁡

2

m



1

−1

NAB⁡≠⁡Principal⁡for⁡front-end fees, discount interest and compensating balance.
FV - Price 365 kn = kr +  + kr
Bond Equivalen t Yield 

or
Price
Term
(1 + ) = (1 + )(1 + )
YTM = kr + INF + MRP + LRP + DRP
C
C  FV
Pbond 

(1  k1 ) (1  k 2 ) 2
$FVn
(1  in ) n

Pzero 

Pbond  $C 

Holding Period Return 


P t 1

P





Holding Period Return 

D0 (1  g) t D0 (1  g)
D
P

 1 t (1  k) k-g k-g t 1 k Payout Ratio k-g D1
g
P0

Po
Price

BVPS Book value per share

COV(k i , k j ) σi σ j





n
~ ~
~
~
COV( k1 , k 2 )  Σ Pri k1i  E( k1 ) k 2i  E( k 2 ) i 1

Pt  Pt 1 C t

Pt 1
Pt 1



D
D
 t (1  k) k TP0 (1  g) TP1

k-g k-g Po
EPS1
ρ ij 

Pt  Pt 1 D t

Pt 1
Pt 1



1
$FV
1 - (1  k d ) -n  kd (1  k d ) n



σ

n

 Pr k i 1

i

 E(k) 

2

i

Final Exam Formula Sheet
E(k p )  x1  E(k1 )  ...  x n  E(k n )

2 σ  x 2σ a  (1  x) 2 σ 2  2x(1  x)ρa,bσ a σ b b E(k 1 )   Pri k1i

E(k i )  k f  βi (E(k M )  k f )

E(k i ) - k f βi β p  x1  β1  ...  x n  β n

βi 

n

i 1

Ti =

COV(k i , k M ) σ2 M

2 σ i2  β i2  σ 2  σ di .
M

Free Cash Flow = Operating Cash Flow – CAPEX – Change in NWC

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