Formulas

Question 1

Dividend payout ratio

Answer 1

Common divs paid / earnings available for common (eps)

Question 2

Stock yield

Answer 2

Dividend per share / stock price per share

Question 3

Margin call

Answer 3

(1 - initial margin) / (1 - maintenance margin) x purchase price

Question 4

P/E ratio

Answer 4

Price to earnings
Current market price / earnings

Question 5

Return on Equity ROE

Answer 5

Earnings available for common (EPS) / common equity per share (net worthper share or book value per share)

Question 6

Current yield

Answer 6

Annual interest in dollars / bonds market price

1000 dollar bond with a 10% coup is selling for 900. What is current yield?

100/900 = 11.11%

Question 7

Propertys intrinsic value

Answer 7

Net operating income NOI / cap rate

This is net operating income of the property NOT the individual. Doesnt include mortgage pmt

Question 8

Intrinsic value of a call option

Answer 8

MP - EP

IV cannot be negative

Question 9

Intrinsic value of a put

Answer 9

EP - MP

IV cant be neg

Question 10

Conversion value of a convertable bond

Answer 10

Par/CP x Ps

Par=par value of bond (typically 1000)
Ps= current market price of underlying stock
CP= conversion price

Question 11

Value a rental property formula

Answer 11

NOI / cap rate = value