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8 Cards in this Set
- Front
- Back
Cost of debt |
Risk free rate + default risk premium |
|
Cost of equity |
Risk free rate + (beta*market risk premium) |
|
WACC |
((Cost of debt * (1-t))* debt ratio) + ( cost of equity * equity ratio) OR (((Cost of debt * (1-t))* (total debt / total debt + market cap)) + ( cost of equity * (market cap/ total debt+ market cap))) |
|
Market Value Added |
Market value of equity - book value of equity |
|
Market values added (second approach) |
(Price/share - BV/share)*# of shares outstanding |
|
Terminal value |
(Free cash flow (from year before) * (1+g)) / (WACC-g) |
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NPV |
Sum of (cash flow * (1+g))/(1+r)^ number of years |
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Stock price |
P = (EPS/r) + NPVGO |