Finance Final Cheat Sheet
Finance Final Cheat Sheet
-1 -> m # compound/yr
Quiz 1 & 2
F
F
1 / 1 r
DF
T
1 r
Quiz 3
P~E
P
EPS
rT (1 / DFT )T 1
real
Continuous compounding
1
1
1 g
PV C *
*
r
g
r
g
1 r
CF1
r
Peer group
Valuation
Scale
2
FCF2
3
FCF3
FCFN
Earn/NI
PV ( FCF )
FCFt
(1 r )t
Enterprise Val
Earnings (NI),
Book Equity,
EPS
EBIT, EBITDA,
Revenue
CT
PT
= T t
ST-K
-(ST-K)
0
0
ST
-ST
K
-K
Call
Put
Rf
ST
Cov(i, m)
m2
EPS1 DIV1
EPS1
= ( *
Erngs0
Re v0 Costs0
# Shares
# Shares
) /m
EPS1 EPS0 * (1 g )
DIV 0 EPS0 * 1 PB
E ( Rm R f )
) * p
Cov( Ri R j ) Corr ( Ri R j ) i j
g ROE * PB ROE *
CML E ( R p ) R f (
InitialCos t Salvage
LifeOfAsset
Payoffs
Action ST<K
ST>K
Call (Buy)
0
Call (Sell)
0
Put (Buy)
K-ST
Put (Sell)
-(K-ST)
Stock (Buy)
ST
Stock (Sell)
-ST
Lend/Buy PV(K) K
Borrow/Sell PV(K) -K
Buy K
K(1+r)t K(1+r)t
Sell K
-K(1+r)t -K(1+r)t
Diversified Portfolios
Dep
Equity
Holders
2. PV(Div)
Quiz 4
Assumes constant growth:
DIVt
P0 PV DIV
(r g )t
EPS0
Put/Call Parity
-P
Perpetuity (infinite)
PV
Writer = Seller
C
Annuity (finite)
1
PV CF1 / r * 1
T
Options
SML (CAPM ) E ( Ri ) R f E ( Rm R f ) ) * i
To Find the efficient combinations of X 1&X2
WACC