Investment Formulas To Memorize Flashcards
1
Q
Current yield
A
Annual interest in dollars / bond’s market price
2
Q
Property’s intrinsic value
A
Net operating income / capitalization rate
3
Q
Intrinsic value of a call
A
Market price - exercise price
4
Q
Intrinsic value of a put
A
Exercise price - market price
5
Q
Tax-exempt yield
A
Taxable yield * (1 - Marginal Tax Rate)
6
Q
Return on Equity (ROE)
A
Earnings available for common (EPS) / Common equity (net worth or book value)
7
Q
Dividend Payout Ratio
A
Common dividends paid / Earnings available for common (EPS)
8
Q
Margin call
A
[(1 - initial margin percentage)/ (1 - maintenance margin percentage)] * purchase price of stock
9
Q
Price / Earnings Ratio = P/E Ratio
A
Current market price / earnings
