Formula Sheet

 

Future Value

Present Value

   

Present and Future Value Interest Factors

Compounding

Statistics

   

Risk and Return

Bond Value

   

Stock Value

Capital Budgeting

Topics in Capital Budgeting

 
   

Leverage

Capital Structure

 

Notation Conventions

r

interest rate

fv

future value

pv

present value

fvif

future value interest factor

pvif

present value interest factor

t

number of years

pmt

annuity payment deposited or received at end of each year

m

number of periods per year

pp

constant dollar amount provided by the perpetuity

EX

expected cash flow

xi

ith possible cash flow

p(xi)

Probability of receiving

ER

expected rate of return

ri

ith possible rate of return

p(ri)

probability of ith possible rate of return

standard deviation

required rate of return for jth security

rf

risk-free return

bj

investmentís non-diversifiable risk

ERm

expected return for the market

DA

duration of an annuity

DB

duration of bond B

B

coupon bearing bond value

F

zero coupon bond value

A

value of interest flow (annuity value)

T

maturity date (life of bond)

B

intrinsic/ present value of an asset

ct

cash flow to be received at time t

FV

bondís maturity/ par value

pp

valuation of preferred stock

d

annual dividend

pc

valuation of common stock

p1

anticipated market price at year end

g

dividend growth rate

npv

net present value

ct

annual after-tax cash flow

I0

initial cash outlay

pi

profitability index

eaa

equivalent annual annuity

ebit

expected earnings before interest and taxes

p

unit sales price

q

number of units sold

avc

unit variable cost

fc

total fixed costs

qb

breakeven point quantity

vc

total variable cost

s

associated level of sales

dol

degree of operating leverage

dfl

degree of financial leverage

dcl

degree of combined leverage

eps

earnings per share

Pj

preferred dividend

sf

sinking fund payment

 

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