additional stuff for the exam corporate finance Flashcards
1
Q
Expected return formula
A
E(CF)/Equity - 1
2
Q
Equity of a firm (perpetuity) formula
A
Net income / risk free interest rate
3
Q
Value of a firm (equity)
A
EBIT - Interest expenses- taxes
4
Q
Debt (in perpetuity)
A
Interest payments/risk free interest rate
5
Q
Value of an unlevered firm
A
Expected cash flows/cost of capital
6
Q
maximum additional debt a firm can issue (formula)
A
Taxable income / interest rate
7
Q
Equity formul including share price
A
Equity = E/E+D *VL
8
Q
In a binomial tree, the risk-neutral probability 𝜌that the stock price will increase is given by:(formula)
A
p = (1+rf)*S-Sd/Su-Sd
9
Q
Price of a call option binomial tree (formula)
A
C = pCu + (1-Cu)*Cd/(1+rf)
10
Q
leverage ratio formula
A
N(d1)*S/C
