Exam (elaborations)
CPA Exam BEC Formulas (1)
- Course
- Institution
CPA Exam BEC Formulas (1)
[Show more]
Seller
Follow
lydiaomutho
Content preview
CPA Exam BEC FormulasEffective Periodic Rate - ANS-Interest Paid per Period/ Net proceeds from Loan
Interest paid - ANS-Stated interest rate * principle amount
Net Proceeds - ANS-the remaining amount after deducting charges and fees related to loan
origination
Annual Percentage Rate - ANS-Effective periodic rate * periods in a year
Effective APR - ANS-[1+(i/n)]^n -1
i= stated interest rate
n= Compounding periods per year
Simple Interest Amount - ANS-P(i)(n)
P= Original Principal
i= interest rate
n= number of periods
Future Value - ANS-P(1+i)^n
P= Original principal
i= interest rate
n= number of periods
Required rate of return - ANS-Maturity risk premium + inflation premium + liquidity premium +
default risk premium
Weighted average interest rate - ANS-effective annual interest payments / debt outstanding
After tax cost of debt - ANS-Pretax cost of debt * ( 1- Tax Rate )
WACC - ANS-Cost of Debt ( weighted) + Cost of Equity ( Weighted)
((Market value of Equity/ total capital) * Cost of Equity) +
(((Market value of debt/Total capital)* Cost of debt) *(1- tax rate))
Cost of Preferred stock - ANS-Preferred Stock Dividends/ net proceeds of preferred stock
, Cost of retained earnings ( Discounted cash flow) - ANS-(D/P) +g
D= dividends per share expected at year end
P= Current market value of common stock
g= Constant rate of growth in dividends
Cost of retained earnings ( Capital Asset Pricing Model) - ANS-Risk Free Rate +( Beta + Market
Risk Premium)
Market Risk Premium - ANS-Market Return- Risk free rate
Cost of retained earnings ( Bond Yield Plus Risk Premium) - ANS-Pretax cost of long term debt
+ Market risk premium
Growth Rate - ANS-( Return on assets * Retention)/ 1-( return on assets * Retention)
Retention - 1- Dividends Payout Rate
Return on investments - ANS-Profit Margin * Investment Turnover
Profit Margin - ANS-Net income/ Sales
Investment Turnover - ANS-Sales/ Invested capital
Return on Assets - ANS-Net Income/ Average total assets
Return on Equity - ANS-Net income/ average total equity
Financial Leverage - ANS-Average total assets/ total equity
Return on equity - ANS-financial leverage * return on assets
Return on equity - ANS-financial leverage ( asset turnover * net profit margin
Net Profit Margin - ANS-Net income/ revenue
Tax burden - ANS-net income/ pretax income
Interest burden - ANS-Pretax Income / Earnings before Interest & Taxes (EBIT)
Operating income margin - ANS-EBIT/Sales
Return on sales - ANS-Operating Profit / Net Sales
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 lydiaomutho. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
76747 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now