Principles of Corporate Finance
Short Cuts w Sometimes there are shortcuts that make it very easy to calculate the present value of an asset that pays off in di ...
Short Cuts Perpetuity - Financial concept in which a cash flow is theoretically received forever. PV C r = = present value cash ...
Short Cuts Perpetuity - Financial concept in which a cash flow is theoretically received forever. r C PV^1 discount rate cash fl ...
Short Cuts Annuity - An asset that pays a fixed sum each year for a specified number of years. ( ) + = × − t r r r C ...
Annuity Short Cut Example You agree to lease a car for 4 years at $300 per month. You are not required to pay any money up front ...
Annuity Short Cut Example - continued You agree to lease a car for 4 years at $300 per month. You are not required to pay any mo ...
Compound Interest i ii iii iv v Periods Interest Value Annually per per APR after compounded year period (i x ii) one year inter ...
Compound Interest 0 2 4 6 8 10 12 14 16 18 (^036912151821242730) Number of Years FV of $1 10% Simple 10% Compound ...
Inflation Inflation - Rate at which prices as a whole are increasing. Nominal Interest Rate - Rate at which money invested grows ...
Inflation 1 + real interest rate =^1 +nominal in 1 +inflation terest ratrate e ...
Inflation 1 + real interest rate =^1 +nominal in 1 +inflation terest ratrate e approximation formula Real int. rate ≈ nominal in ...
Inflation Example If the interest rate on one year govt. bonds is 5.9% and the inflation rate is 3.3%, what is the real interest ...
Inflation Example If the interest rate on one year govt. bonds is 5.9% and the inflation rate is 3.3%, what is the real interest ...
Inflation Example If the interest rate on one year govt. bonds is 5.9% and the inflation rate is 3.3%, what is the real interest ...
Valuing a Bond Example If today is October 2000, what is the value of the following bond? w An IBM Bond pays $115 every Sept for ...
Valuing a Bond Example continued If today is October 2000, what is the value of the following bond? w An IBM Bond pays $115 ever ...
Bond Prices and Yields 0 200 400 600 800 1000 1200 1400 1600 0 2 4 6 8 10 12 14 5 Year 9% Bond 1 Year 9% Bond Yield Price ...
u The Value of Common Stocks Principles of Corporate Finance Brealey and Myers Sixth Edition Chapter 4 ...
Topics Covered w How To Value Common Stock w Capitalization Rates w Stock Prices and EPS w Cash Flows and the Value of a Busines ...
Stocks & Stock Market Common Stock - Ownership shares in a publicly held corporation. Secondary Market - market in which alr ...
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