Business Finance Formulae Sheet: R PV FV

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BUSINESS FINANCE FORMULAE SHEET

FV PV 1 r
n
1. FUTURE VALUE OF A SINGLE SUM

2. PRESENT VALUE OF A SINGLE SUM


PV FV 1 r
-n

1 r n 1
3. FV PMT FUTURE VALUE OF AN ORDINARY ANNUITY
r

1 1 r n
4. PV PMT PRESENT VALUE OF AN ORDINARY ANNUITY
r
1 r n 1
5. FV PMT (1 r )
1
FUTURE VALUE OF AN ANNUITY DUE
r

1 1 r ( n 1)
6. PV PMT PMT PRESENT VALUE OF AN ANNUITY DUE
r

PMT
7. PV PRESENT VALUE OF A PERPETUITY
r

m
NIR
8. ie 1 1 EFFECTIVE RATE OF INTEREST
m

1 1 rd n
Bondprice PMT FaceValue 1 rd
n
9. BONDPRICE
rd
d1
10. P0 CONSTANT DIVIDENDS PRICING MODEL
re
d 1 g d1
11. P0 0 for re g CONSTANT GROWTH IN DIVIDENDS PRICING MODEL
re g re g

d1
12. DIVY DIVIDEND YIELD
P0

P1 P0
13. CGY CAPITAL GAINS YIELD
P0

Average.net. profit
14. ARR = Average.book .value ACCOUNTING RATE OF RETURN

n
CFt
15. NPV CF0 NET PRESENT VALUE
t 1 1 r t

1
BUSINESS FINANCE FORMULAE SHEET

1 b
16. re g
PRICE-EARNINGS RATIO
n
17. Ri Rt Prt INDIVIDUAL ASSET - EXPECTED RETURN
t 1

R R
n
2
18. i t i Prt INDIVIDUAL ASSET - STANDARD DEVIATION (RISK)
t 1

19. COV A, B A, B A B INDIVIDUAL ASSET - COVARIANCE

cov i ,m i , m i m
20. INDIVIDUAL ASSET - BETA
2m 2m

21. E ( R ) i R f Rm R f i CAPM/SECURITY MARKET LINE (SML) EQUATION

22 E ( R ) p w A R A wB R B .....wn R n PORTFOLIO EXPECTED RETURN

23. p w A2 A2 wB2 B2 2 w A wB A, B A B PORTFOLIO STANDARD DEVIATION (RISK) (2 ASSET)

p = w11 + w22 + w33 +........... wnn PORTFOLIO BETA

25. E ( R ) p R f Rm R f p
CAPITAL MARKET LINE (CML) EQUATION
m

E ( Ri ) R f
26. Re ward .to.risk REWARD-TO-RISK RATIO
i

E D
27. WACC re rd 1 Tc WEIGHTED AVERAGE COST OF CAPITAL (WACC)
V V

d pref
28. R pref COST OF PREFERENCE SHARES
P0

29. E ( R ) i R f Rm R f i COST OF ORDINARY SHARES (CAPM)

30. IMPUTATION TAX-CREDIT

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