TMV

Question 1

When to pay taxes early

Answer 1

Only if the taxes will be lower (e.g. if you have a capital gain), otherwise defer

Question 2

TMV Cash Flow

Answer 2

Usually the payment / outflow

Question 3

PV / FV Single vs PV / FV Annuity

Answer 3

Single is just one CF, annuity is multiple CFs

Question 4

b

Answer 4

fraction of retained earnings, what company retains to invest in itself

1-b is fraction of earnings paid as dividend

Question 5

k-e

Answer 5

cost of equity capital

what level of equity investors need to bare risk

discount rate for future dividends

Question 6

interest rates effect on k-e

Answer 6

high interest rates raise k-e because investors are motivated to bare more risk

Question 7

PEG Ratio

Answer 7

P:E/g

lower the better, b/c it implies low price and high growth

Question 8

g

Answer 8

growth rate of earnings / dividends, p * b

Question 9

p

Answer 9

rho, return on retained earnings

Question 10

APR multiple compounds p.a.

Answer 10

Annual rate will be understated