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BEC2015 > Financial Valuation > Flashcards

Flashcards in Financial Valuation Deck (5):
1

How do you calculate the PV factor?

FV / ( 1 + r )^n
Future Value divided by
1 + Interest Rate exponent # of periods (n)

2

How do you calculate the PV factor of an annuity?

Step 1:
Compute the PV factor for 1 = 1/ (1+r)^n
Step 2:
( 1 - PV Factor ) / Interest Rate

3

What is the formula for the PV of an annuity?

Pmt X [ 1 - (PV factor)] / r

4

How do you calculate the PV of a perpetuity

PV = Div ( par X %) / R
where R is the required return

5

How do you calculate the PV of stock value p/share perpetuity?

P = D / R