Summary
Summary Formulas for Finance 1
- Course
- Institution
- Book
These are the formulas you need for the final exam of Finance 1 of IBA.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Test Bank for Corporate Finance, 5th Edition by Jonathan Berk, DeMarzo Chapter 1-31 A++
-
UPDATED Finance 1 for Business Summary
-
Test Bank For Corporate Finance The Core, 5th Edition by Jonathan Berk, Peter DeMarzo Chapter 1-19
Seller
Follow
demivansoeren
Content preview
FINANCE 1 FORMULAS,TABLE OF CONTENTS
Chapter 1: Introduction ................................................................................................................................. 3
Chapter 3: Financial decision making and the law of one price ...................................................................... 3
Chapter 4: Time, Money and Interest rates .................................................................................................... 3
Chapter 5: Interest rates ................................................................................................................................ 4
Chapter 6: Valuing Bonds .............................................................................................................................. 5
Chapter 7: Investment Decision Rules ............................................................................................................ 5
Chapter 9: Valuing stocks .............................................................................................................................. 6
Chapter 10: Capital Markets and pricing of risk ............................................................................................. 7
Chapter 11: Optimal portfolio choice and the capital asset pricing model ...................................................... 8
Chapter 12: Estimating the cost of capital ..................................................................................................... 9
Chapter 13: Investor Behaviour and Capital Market Efficiency ..................................................................... 10
, CHAPTER 1: INTRODUCTION
No formulas
CHAPTER 3: FINANCIAL DECISION MAKING AND THE LAW OF ONE PRICE
- Present value:
𝐶
𝑃𝑉 =
1+𝑟
- Net present value (NPV):
𝑁𝑃𝑉 = 𝑃𝑉(𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠) − 𝑃𝑉(𝑐𝑜𝑠𝑡𝑠)
CHAPTER 4: TIME, MONEY AND INTEREST RATES
- Future Value of a Cash Flow:
𝐹𝑉! = 𝐶 ∗ (1 + 𝑟)!
- Present Value of a Cash flow:
𝐶
𝑃𝑉 =
(1 + 𝑟)!
- Present Value of a Stream of Cash Flows:
"
𝐶!
𝑃𝑉 = 8
(1 + 𝑟)!
!#$
- Present Value of a Perpetuity:
𝐶
𝑃𝑉(𝐶 𝑖𝑛 𝑝𝑒𝑟𝑝𝑒𝑡𝑢𝑖𝑡𝑦) =
𝑟
- Present Value of an annuity:
1 1
𝑃𝑉 (𝐴𝑛𝑛𝑢𝑖𝑡𝑦) = 𝐶 ∗ =1 − >
𝑟 (1 + 𝑟)"
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller demivansoeren. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.33. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79223 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now