
Value of a bond
 PV of Principal + PV of interest
 can use TVoM on calculator all at once entering years, yield, interest payments, principal on bond solve for PV
 if semi annual years is x2, yield and interest payments are /2

yield to maturity formula
to use calculator look to find yield

preferred stock formula
 P=D/K
 P is price
 D is divident
 K is rate of return

common stock
 P=D/(kg)
 p is price
 d is dividend
 k is rate of return
 g is growth rate

cost of debt  estimated Yield to Maturity
 interest + [(principalprice)/#years]
 divided by
 .6(bond price)+.4(principal payment)
multiply answer by 100 to get %

cost of debt  Yield to maturity after tax
Yield to Maturity X (1tax rate)

cost of new preferred stock
 K = D/(PF)
 K is rate of return
 P is price
 D is dividend
 F is flotation cost

cost of new common equity
 K = [D/(PF)]+g
 K is rate of return
 P is price
 D is dividend
 F is flotation cost
 g is growth rate

Payback of debt
 is the number of years to get back cost
 if part of a year left needed/total payback for year

NPV
 is the sum of the PV of each cash inflow minus the cash outflow (initial investment)
 or
 use NPV on calculator
 NPV(rate,outlay,{inflows}{inflow counts})

IRR
 when NPV is equal to 0 so if
 NPV is positive raise the rate
 if NPV is negative lower the rate
 or
 calculator IRR (outlay,{cash inflows}, {inflow counts})

NPV w/ PI
(NPV + outlay)/outlay

