Updated
20070213 08:25
Companies
Type of Company  liability 
hostile takeover  gain control of shares 
s corporation  no double tax, 75% american, c corporation 
transaction cost  bidask difference/ broker cost 
 memorize 
Basic Finance Equations
Question  Answer 
RoI or RoA  NI / Total Assests 
ACP  AR/(Credit Sales/365) 
 memorize 
Interest
Type of Interest  formula 
discount interest free  1(1/r) 
NPV  pv = pv(benefits)PV(costs) / use discount rate 
Arbritage  taking advantage of price difference 
Bond  price of bond / discount rate 
expected return of a risky investement  expected gain/ intial cost 
 memorize 
Time
Type of  formula 
Rule 1  can only compare prices at the same time 
Rule 2  multiply by (1+r) to get wat the value will be in the future 
Rule 3  divide by (1+r) to get PV of future cash flow 
FV  PV * (1+r)^n 
PV  c/(1+r)^n 
FV of annuity  Anuity 1 
Loan Payment  C=P/(1/r)(1(1/(1+r)^n)) 
Bond  Cost/(1+r) 
EAR  Effective annual rate (all interest earned in a year) 
APR  Annual Payement Rates 
real interest  (ri)/(1+i) 
after tax interest  r(1t) 
EVA growing  CnrI 
EVA downward  CnrI(n1) 
 memorize 
Time
Type of  formula 
Rule 1  can only compare prices at the same time 
Rule 2  multiply by (1+r) to get wat the value will be in the future 
Rule 3  divide by (1+r) to get PV of future cash flow 
FV  PV * (1+r)^n 
PV  c/(1+r)^n 
FV of annuity  Anuity 1 
Loan Payment  C=P/(1/r)(1(1/(1+r)^n)) 
Bond  Cost/(1+r) 
EAR  Effective annual rate (all interest earned in a year) 
APR  Annual Payement Rates 
real interest  (ri)/(1+i) 
after tax interest  r(1t) 
EVA growing  CnrI 
EVA downward  CnrI(n1) 
Same Resource project  npv/ resources consumed 
 memorize 
Bonds
Question  Answer 
Coupon Payment  coupon rate * FV / # of payments in a year 
YTM  annuity + FV/(1+y)^n 
 memorize 
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