FIN 300 Study Guide - Final Guide: Corporate Tax, Capital Asset Pricing Model, Covariance
Document Summary
Pvif = 1 / (1 + r)n r = interest rate per period. Bond value = [annuity present value of the coupons] The zero growth model formula is: formula is: D1= do (1+g) , dt= do (1+g)t so, for d3=do(1+g)3 then again for. P0 *1+g/(r-g) , p1 = p0(1 + g) D1= do (1+g) expected dividend per share= yld x close r =required return, dy=dividend yield, and cgy=capital gains yield. The peg ratio = divide the p/e ratio by the percentage growth rate in earnings. Pt = benchmark price sales ratio * sales per share. The npv decision rule is: if npv is greater than zero (npv > 0), accept the project (otherwise reject it) The payback period decision rule is: if the payback period is 2 years or less (or some other arbitrary cut-off), accept the project. The discounted payback period decision rule is: if the payback period is 2 years or.
