Scribd
Upload
72 views2 pages

Formula Sheet: Annuity Present Value C ! 1" Present Value Factor C ! 1" 1 (1+ R) # $ % &% ' (%) %

This document contains formulas for calculating present and future values using compound interest, annuity valuation, portfolio expected returns and risk, weighted average cost of capital, and option pricing. Key formulas include: - Present value and future value calculations using compound interest rates - Methods for valuing annuities, including present value factors and formulas for ordinary vs. annuity due values - Equations for calculating portfolio expected returns, standard deviation, covariance, and systematic vs. unsystematic risk - The capital asset pricing model formula for calculating expected returns based on beta - Formulas for weighted average cost of capital and weights of equity, preferred stock, and debt - Black-Scholes pricing of European call options

Uploaded by

Billie Jean
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
72 views2 pages

Formula Sheet: Annuity Present Value C ! 1" Present Value Factor C ! 1" 1 (1+ R) # $ % &% ' (%) %

This document contains formulas for calculating present and future values using compound interest, annuity valuation, portfolio expected returns and risk, weighted average cost of capital, and option pricing. Key formulas include: - Present value and future value calculations using compound interest rates - Methods for valuing annuities, including present value factors and formulas for ordinary vs. annuity due values - Equations for calculating portfolio expected returns, standard deviation, covariance, and systematic vs. unsystematic risk - The capital asset pricing model formula for calculating expected returns based on beta - Formulas for weighted average cost of capital and weights of equity, preferred stock, and debt - Black-Scholes pricing of European call options

Uploaded by

Billie Jean
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Formula Sheet

t
PV × (1 + r) = FVt [5.3]
FVt
PV0 =
(1+ r )t

C C %# 1 %' [6.1]
Annuity present value =
r
( )
! 1 " Present value factor = ! $1" (
r %& (1 + r)t %)

" (1+ r )t ! 1 % [6.2]


Annuity FV factor = (Future value factor ! 1) / r = $ '
# r &

Annuity due value = Ordinary annuity value × (1 + r) [6.3]

Perpetuity present value × Rate = Cash flow [6.4]


PV × r = C

1 [6.5]
Annuity present value factor = ! (1- Present value factor)
r

C [6.6]
PV =
r−g

t [6.7]
C ⎡ ⎛1 + g ⎞ ⎤
PV = ⎢1 − ⎥
r − g ⎢ ⎜⎝ 1 + r ⎟⎠ ⎥
⎣ ⎦

m [6.8]
! QR $
EAR = # 1 + & '1
" m%

EAR = eq − 1 [6.9]

1 + R = (1 + r) × (1 + h) [7.2]

R≈r+h [7.4]
r = (D1/P0) + g
[8.5]

[ IdT c ] [1 + .5k ] Sn dT c 1 [10.5]


PV tax shield on CCA = × − ×
d+k 1+ k d + k (1 + k )n

Total dollar return = Dividend income + Capital gain (or loss) [12.1]

" 1 % ) [12.3]
Var(R) = $ ( (R ! R) 2 + ... + (RT ! R) 2 +
# (T ! 1) '& * 1 ,

Geometric average return = [(1 + R1 ) ! (1 + R2 ) ! ! ! (1 + RT )]1/T ! 1 [12.4]

Ross_FormulaSheet_For_Exam_cleaned.doc

1
Risk premium = Expected return − Risk-free rate = E(RU) − Rf [13.1]

E ( R) = Σ R j × Pj [13.2]
j

σ2 = Σ[ R j − E ( R)]2 × Pj [13.3]
j

σ = σ2

E(RP ) = x1 ! E(R1 ) + x2 ! E(R2 ) + ! + xn ! E(Rn ) [13.4]

n
( )(
Covariance of returns: COVL,U = " Probi rL,i ! E ( rL ) rU ,i ! E ( rU )
i=1
)
! 2P = x 2L! 2L + xU2 !U2 + 2x L xU CORR L,U ! L!U [13.5]

! P = ! 2P

Covariance L,U = CORR L,U ! L !U [13.6]

Total return = Expected return + Unexpected return  R = E(R) + U

Announcement = Expected part + Surprise [13.7]

R = E(R) + Systematic portion + Unsystematic portion [13.8]

Total risk = Systematic risk + Unsystematic risk [13.9]

E(Ri) = Rf + [E(RM) − Rf] × βi [13.10]

COV(R2 , RM ) [13A.4]
!2 = 2
! (RM )

RE = Rf + βE × [RM − Rf ] [14.2]

! E$ ! P$ !D $ [14.6]
WACC = # & ' RE + # & ' RP + # m & ' RD ' (1 ( TC )
"V% "V% " V %

C1 = 0 if (S1 − E) ≤ 0 [25.1]

C1 = S1 − E if (S1 − E) > 0 [25.2]

C0 ≥ 0 if S0 − E < 0 [25.4]
C0 ≥ S0 − E if S0 − E ≥ 0

Ross_FormulaSheet_For_Exam_cleaned.doc

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy