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8 Cards in this Set
- Front
- Back
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WACC |
((E/v) x Re)+((D/v) x Rd x (1-Tc)) |
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WACC with Prefered Stock |
Add ((P/v x Rp) to WACC equation |
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Dividend Growth Model |
Re = (D1/Po) + G D1 = Do x (1+g) Po = D1/(Re-g) |
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Security Market Line Approach |
Re = Rf + ((Be x (Rm - Rf)) |
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Equity and Debt Weight |
V = E + D
E/V + D/V = 1
(E+D)/V = 1 |
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Po Do D1 G Re |
Current Price Current Dividend Future Dividend Expected Growth Required return on equity |
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Re Rf Be (Rm-Rf) |
Cost of equity (Required return) Risk free rate (short term t-bills) Beta of equity (or corporation) Market Risk Premium |
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E D V Tc P Re Rd Rp |
Equity Debt Value Tax Rate Preferred Stock Required return on equity Required return on debt Required return on preferred stock |
