Formulas Revision Flashcards
Variance
(With proba + with historical data)


Simple Interest=
X(1 + rT)
Future Value
X(1 + r)T
Present Value (2)
DF * X

Discount Factor
PV of $1

Net Present Value

PV Perpetuity

PVp2 = value of a perpetuity paying C per year with first payment in T+1 years

PV of an annuity: (3)

- PVp - PVp2
*

PV of an annuity paid at the beginingof the year
PVa * (1 + r)
PVp with growth

PVa with growth

Effective Annual Rate

Effective Monthly Rate

Continuous Compounding
Xer
Continuous discounting
PV= Xe-rT
Real interest rate
(1+r)/(1+pi)
i=real interest rate
r=nominal interest rate
𝜋(pi)=inflation rate

Approximate Yield To Maturity

Relationship formula YTM/PV

Gordon Growth Formula

Stock Price with constant dividend

Return on Equity/Return on investment
= Amount of earnings a dollar of equity creates
EPS= earning per share
Earning growth
Plowback ratio = 1 -payout ratio

Nominal Interest rate =
Real rate + Inflation














