Investments Formulas Flashcards
1
Q
Current Yield
A
Annual interest in dollars (Yearly coupon)/ Bond mkt price
2
Q
Property’s intrinsic Value
A
Net Operating Income (NOI)/Capitalization Rate
3
Q
Intrinsic Value of a Call Option
A
Remember COME
Call Option = Market Price - Excercise Price
4
Q
Intrinsic Value of a Put Option
A
Remember POEM
Put Option = Excecise Price - Market Price
5
Q
Taxable Equivalent Yield (TEY)
A
Tax-exempt yield / (1 - marginal tax rate)
6
Q
ROE
A
EPS / Common Equity (net worth or book value)
7
Q
Dividend Payout Ratio
A
Common dividends paid / EPS
8
Q
Stock Yield
A
Dividend per share / Stock price per share
9
Q
Margin Call
A
[(1 - initial margin percentage) / (1 - maintenance margin percentage)] x Purchase price of stock
10
Q
P/E Ratio
A
Current Market Price / Earnings
