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R02 > Formulas > Flashcards

Formulas Flashcards

1
Q

Interest/running yield

A

(coupon/clean price) x 100

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2
Q

Redemption yield

A

Interest yield +- ((gain/number of years to maturity)/clean price)) x 100

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3
Q

Stamp Duty

A

Amount x 0.005(0.5%) rounded up to nearest multiple of £5

  • Stock transfer form transaction
  • Only on transactions >£1,000
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4
Q

Stamp Duty Reserve Tax

A

Amount x 0.005(0.5%) rounded to nearest penny

  • Crest transaction
  • No minimum amount
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5
Q

EPS

A

profit attributable to ordinary shareholders/number of ordinary shares

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6
Q

Dividend Yield

A

dividend per share/share price x 100

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7
Q

Dividend Cover (individual)

A

profit attributable to ordinary shareholders/dividends paid to ordinary shareholders

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8
Q

Dividend Cover (total profit)

A

Earnings per share/Dividend per share

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9
Q

PE Ratio

A

Current share price/Earnings per share

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10
Q

NAV

A

Net assets attributable to ordinary shareholders*/number of ordinary shares

*minus long term debt and preference shares

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11
Q

Property rental yields

A

(gross rent - expenses) / (market price + cost of buying) x 100

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12
Q

Residential SDLT (Up to £125,000)

*Exc current SDLT holiday

A

0%

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13
Q

Residential SDLT (£125-£250,000)

*Exc current SDLT holiday

A

2%

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14
Q

Residential SDLT (£250-925,000)

*Exc current SDLT holiday

A

5%

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15
Q

First time buyers

A

No SDLT up to £300,000

*No relief above £500,000

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16
Q

Purchase of second home SDLT

A

Usual rate + 3%*

*If above £40,000

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17
Q

SDLT on residential dwellings bought by companies/collective investment schemes

A

If over £500,000. House price x 15%

18
Q

Commercial SDLT (Up to £150,000)

A

0%

19
Q

Commercial SDLT (Up to £150,000-£250,000)

A

2%

20
Q

Commercial SDLT (£250,000+)

A

5%

21
Q

SDLT on NPV of rent payable under lease

A
  1. ((Annual rent x term) - discount for inflation - threshold figure)
  2. Above threshold amount x 1% up to £5m and then 2% thereafter

*No SDLT up to £125k/£150k(residential/commercial)

22
Q

CAPM

A

E(R) = Rf + B(Rm-Rf)

E(R) = expected return on risky investment
Rf = risk free rate of return
B = beta
Rm = market portfolio return
23
Q

Compound interest formula

A

FV = PV(1+r)^n

r = interest
n = years
24
Q

Effective Annual Rate (EAR or AER or APR)

A

(1+(r/n))^n - 1

r = interest
n = frequency of compounding ie monthly = 12
25
Q

Future value/accumulation

A

P((1+(r/n))^n - 1)/r***

Check study book on page 139

26
Q

Discounted cash flow

A

PV = FV / ((1+r)^n)

27
Q

Annuity formula

A

A = P*(1-(1+r)^-n / r)

28
Q

Real returns/nominal returns

A

Rreal = Rnom - Rinf

29
Q

Gearing

A

1) Calculate gain or loss on investment (price sold - price bought for)
2) Show this as a % of original investment (minus gearing)

30
Q

Diluted NAV

A

(Net assets + money subscribed by warrant holders)/(Number of ordinary shares + new shares issued to warrant holders)

31
Q

Undiluted NAV

A

Net assets /number of ordinary shares

32
Q

Discount (investment trust)

A

Share price - NAV per share/NAV per share

*trading at discount if share price < nav per share

33
Q

Dividend income

A

Dividend allowance: £2000

Income within BR threshold: 7.5%
Income within HR threshold: 32.5%
Income within AR threshold: 38.1%

*if reinvested, still liable to income tax on dividends

34
Q

CGT Tax (onshore)

A

Annual exempt amount: £12,300

Taxable gain beyond this amount:
BR = 10%
HR/AR = 20%

35
Q

CGT Tax (offshore funds)

A

Reporting:
Annual exempt amount £12,300 then 10%/20%

Non reporting:
Subject to income tax without annual exempt amount at 20%, 40%, 45%

36
Q

Chargeable gain on investment bond (no withdrawals)

A
  1. (calculate gain) Surrender value - amount invested
  2. Gain + other income = tax rate band
  3. If BR then no further tax, if HR/AR then top slicing calculation
37
Q

Top slicing calculation

A

Gain on disposal / number of years bond held

partial withdrawal: includes existing year
full withdrawal: complete existing year

38
Q

Chargeable gain on investment bond (withdrawals)

A
  1. Calculate 5% x capital for annual withdrawal allowance to see if tax deferred or paid
  2. (calculate gain) Surrender value - amount invested + withdrawals
  3. Gain + other income = tax rate band
  4. If BR then no further tax, if HR/AR then top slicing calculation
39
Q

Chargeable gain taxation (onshore vs offshore)

A

Onshore: Income tax rates less basic rate tax
Offshore: Income tax rates

40
Q

Income tax relief (EIS)

A

Investment x 30%

41
Q

Income tax relief (SEIS)

A

Investment x 50%

42
Q

Income tax relief (VCT)

A

Investment x 30%

R02 (8 decks)

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