Pv of a perpetuity - Study guides, Class notes & Summaries

Adventis Financial Modeling Certification (FMC) Level 2 Exam Prep (New 2023/ 2024 Update) Questions and Verified Answers_ 100% Correct QUESTION why is tax-effected EBIT used rather than net income Answer: - the valuation should not depend on capital structure - applying the tax-rate directly to EBIT without subtracting interest expense eliminates the impact of capital structure to cash flow QUESTION cash flow is projected out in the projection period which is typical...

Price change based on convexity - Answer--duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration - Answer-Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration - Answer-[(v-)-(v+)]/[2V0(change in yield)] Future Value - Answer-PV(1+(I/Y)^N) PV - Answer-FV/(1+r)^n PV of perpetuity - Answer-PMT / discount rate Approximate percentage price change of a bond - Answer-(-)(modified duration)(ΔYTM) Nominal Risk Free - A...

Price change based on convexity CORRECT ANSWER -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration CORRECT ANSWER Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration CORRECT ANSWER [(v-)-(v+)]/[2V0(change in yield)] Future Value CORRECT ANSWER PV(1+(I/Y)^N) PV CORRECT ANSWER FV/(1+r)^n PV of perpetuity CORRECT ANSWER PMT / discount rate Approximate percentage price change of a bond CORRECT ANSWER (-)(modified...

Solution Manual For Principles of Corporate Finance 14th Edition By Richard Brealey Stewart Myers Franklin Allen and Alex Edmans Complete Chapters 1-33 2024. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all real assets. Real assets are identifiable as items with intrinsic value. The others in the list are financial assets, that is, these assets derive value because of a contractual claim. Est time: 01-05 3. a. Financial assets, such as stocks or bank loa...

Solution Manual For Principles of Corporate Finance 14th Edition By Richard Brealey Stewart Myers Franklin Allen and Alex Edmans Complete Chapters 1-33 2024/2025. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all real assets. Real assets are identifiable as items with intrinsic value. The others in the list are financial assets, that is, these assets derive value because of a contractual claim. Est time: 01-05 3. a. Financial assets, such as stocks or ban...

Finance 310 Exam | Answered with complete solutions The value in t years of an investment made today at interest rate r is called the _________ of your investment. A: Present value B: Compound value C: Future value D: Simple value A dollar invested today at 8.0 percent interest compounded annually will be worth _________ three years from now. A: $1.08 B: $1.1664 C: $1.2597 FV = $1.00 x (1 + 0.8)^3 A dollar invested today at 8.0 percent simple annual interest will be worth __________three years...

CFA Level 1 - 101 Must Knows 368 Questions with Verified Answers Addition Rule of Probability - CORRECT ANSWER ADDITION: P(A or B) = P(A) + P(B) - P(AB) Roy's Safety First Criterion - CORRECT ANSWER Safety First Ratio = (E(R) - Rₜ) / σ Larger ratio is better If (Rₜ) is risk free rate, then it becomes Sharpe Ratio Sharpe Ratio - CORRECT ANSWER Sharpe Ratio = (E(R) - RFR) / σ Larger ratio is better If (Rt) is higher than RFR, then it becomes Safety First Ratio Centra...

Future Value (FV) correct answers PV(1+r)^n Present Value (PV) correct answers FV/(1+r)^n FV= cash flow for the period r= the rate in percentage n= the period nominal rate of return correct answers the rate of return expressly ignores potential changes in the purchasing power of associated currency compounding correct answers accumulation of the time value over multiple periods discount rate correct answers used to get FV back to PV perpetuity correct answers a stream of ca...

Price change based on convexity - -duration(change in yield)+1/2(convexity)(change in yield)^2 Effective Duration - Required if a bond has embedded options: [(v-)-(v+)]/[2V0(change in curve)] Modified Duration - [(v-)-(v+)]/[2V0(change in yield)] Future Value - PV(1+(I/Y)^N) PV - FV/(1+r)^n PV of perpetuity - PMT / discount rate Approximate percentage price change of a bond - (-)(modified duration)(ΔYTM) Nominal Risk Free - Real Risk Free + expected inflation Required Return - Nominal r...

CHAPTER 1 Introduction to Corporate Finance The values shown in the solutions may be rounded for display purposes. However, the answers were derived using a spreadsheet without any intermediate rounding. Answers to Problem Sets 1. a. real b. executive airplanes c. brand names d. financial e. bonds *f. investment or capital expenditure *g. capital budgeting or investment h. financing *Note that f and g are interchangeable in the question. Est time: 01-05 2. A trademark, a fa...