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Fundamentals of Finance Formula Sheet

This document provides formulas for calculating key financial metrics such as holding period return, future and present value of sums and annuities, expected return and standard deviation of portfolios and assets, beta, bond and stock valuation, and cost of capital. It includes formulas for z-scores, future and present value, portfolio expected return and risk, capital market line, security market line, and bond, stock, and cost of capital calculations.

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Trent
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1K views1 page

Fundamentals of Finance Formula Sheet

This document provides formulas for calculating key financial metrics such as holding period return, future and present value of sums and annuities, expected return and standard deviation of portfolios and assets, beta, bond and stock valuation, and cost of capital. It includes formulas for z-scores, future and present value, portfolio expected return and risk, capital market line, security market line, and bond, stock, and cost of capital calculations.

Uploaded by

Trent
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Formula Sheet

Holding Period Return: Z-Score:


HP ̂

Future Value of a Single Sum: Expected Return of a Portfolio of Assets:


( )
̂ ∑ ̂
Present Value of a Single Sum:

( * Standard Deviation for a 2-Asset Portfolio:


( )
√
Future Value of an Ordinary Annuity:
( )
( ) Standard Deviation for an n-Asset Portfolio:

Present Value of an Ordinary Annuity: √∑ ∑∑

( )
( )
Capital Market Line:

̂ (̂ )
Future Value of an Annuity Due:
( )
( )(1+i) Beta of an Asset/Portfolio:

Present Value of an Annuity Due:


( )
( )(1+i)
Security Market Line:
(̂ )
Present Value of a Perpetuity:

Bond Valuation:

( )
Effective Interest Rate: ( )
( )
( *

Stock Valuation (No Growth):


Nominal Interest Rate (From Effective Rate):
( ) ⁄
√

Expected Return of an Asset: Stock Valuation (Constant Growth):

̂ ∑ ̂

Cost of Capital:
Standard Deviation of an Asset:
( * ( * ( )

√∑( ̂) ( )

Coefficient of Variation:

̂ Student #_________________________________

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