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18 Cards in this Set
- Front
- Back
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Growth in Purchasing Power
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(1+ Nominal Rate) / (1+Inflation Rate)
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Real Interest Rate
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(Nominal -Inflation Rate) / (1+ Inflation Rate)
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PV of risk free cash flow in n years
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PV = Cn / (1 + rn)^n
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Coupon Payment
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(Coupon Rate x Face value) / # of coupon payments per year
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Yield to Maturity of an n-year Zero Coupon Bond
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1 + YTMn = (FV/Price) ^1/n
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Bond Price of a Zero coupon
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Price = FV / (1 + r)^n
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Rate of Return on zero coupon bond investment
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(Price year 1/ Price year n)^1/n -- 1
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Yield to Maturity with credit risk and corporate bonds
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YTM for debt = (Basis points x .01) + Treasury note coupon rate %
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Current stock price with price + div one year from now
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Po = (Div1 + P1) / 1 + rE
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Equity Cost of Capital / Expected return for a one year investment
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rE = (Div1 / Po) + (P1 - Po/Po)
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Dividend Yield
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Div1 / Po
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Capital Gains Rate
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(P1 - Po) / Po
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Current stock price with multiple dividends in n years
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Po = (Div1/ 1 + rE) + (Div2/ (1 + rE)^2)) + (Div N + Pn/(1 + rE)^n)
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Constant Dividend Growth Model
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Po = Div1 / rE - g
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Earnings Growth Rate
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g = RR x RONI
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Estimate of rE when no prices given
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(Div 1 / Po) + g
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Constant Dividend Growth Model when a firm is expected to grow at rate g after year N+1
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Pn = Div n+1 / rE - g
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Total Payout Model
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PV (Future total dividends and net repurchases) / Shares outstanding
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