Mgt 301

CHAPTER =1

Simple interest:
FV=Po (1+i*n)
PV=FV/ (1+i*n)

unite interest:
FV=Po (FVIF i%, n)
PV=Po (PVIF i%, n)

perpetuity:
PVA &=R/i

Annuity:
FVAn=R (FVIFA i%, n)
PVAn=R (PVIFA i%, n)
Annuity due or number one of the social class: FVAn=R (FVIFA i%, n) (i+1) OR PVAn=R (PVIFA i%, n) (i+1)
Ordinary annuity or end of the year: FVAn= R (FVIFA i%, n) OR PVAn=R (PVIFA i%, n)

Suppose…. i=5%, n=1year, Po=1000
Once a year or annually (1) =$1000(1+0.05/1) ^1
Half yearly or semiannually (2) =$1000(1+0.05/2) ^1*2
Quarterly (4) =$1000(1+0.05/4) ^1*4
Monthly (12) =$1000(1+0.05/12) ^1*12
endlessly (continuous compound): FVn=PVo (e) ^i*n ….. 1000(2.71828) ^0.05*1
{Value of e =2.



71828}
in effect(p) annual interest tramp: [(1+i/m) ^n*m]-1

CHAPTER = 4

maturity date Value = MV
Coupon Payment = I
Investors Required rate of Return or expected rate of return = kd
PV=I (PVIFA kd%, n) +MV (PVIF kd%, n)

* Perpetual wed : V = I / Kd
* Zero-Coupon Bond : V= MV (PVIF Kd,n)
* Preferred Stock Valuation : V = Dp / Kd {Par value $100;kd=12%,dp=9%


* Common Stock Valuation :
V = D1 / (ke- g)
= Do (1+g)/ke-g
{D6=Do (1+g) ^6}
{P5=D6/ke-g}

Interpolated discount rate =
iL+ (iH iL) (PVL PVYTM)
(PVL PVH)

Preffered stock YTM: KP=Dp/Po
Common stock YTM: Ke= (D1/Po) +g

CHAPTER = 5
* Dt = Dividend at the end of time t
* Pt = security departments price at time t
* Pt-1 = Securitys price at time t-1
* What is the risk?
R = [Dt + (Pt Pt-1)] / Pt-1

* Expected Return , ?
* Standard Deviation, ?
* Possible Return= Ri
* prospect of Occurrence =Pi
* Expected Return, ?= Ri x Pi
* partitioning , ?² = (Ri ?)² (Pi)

* CV = ? / ?

* Expected Return of each securities in the portfolio, ?...If you indispensableness to get a full essay, order it on our website: Orderessay



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