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Essential Formulas for COMM 298 Midterm Exam Success

School
University of British Columbia**We aren't endorsed by this school
Course
COMM 298
Subject
Communications
Date
Dec 10, 2024
Pages
2
Uploaded by MinisterEnergy12608
COMM 298 2024W1 MIDTERM EXAM FORMULA SHEET PAGE 1 of 2 Single Cash Flow Compounding/Discounting: 𝐹𝐹𝑉𝑉𝑛𝑛=𝐢𝐢0Γ— (1 +π‘Ÿπ‘Ÿ)𝑛𝑛𝑃𝑃𝑉𝑉0=𝐢𝐢𝑛𝑛×1(1 +π‘Ÿπ‘Ÿ)𝑛𝑛Effective Interest rates (1 +Effective n-Period Rate) = (1 +π‘Ÿπ‘Ÿ)𝑛𝑛APR into effective period rate: 𝐴𝐴𝑃𝑃𝐴𝐴=π‘šπ‘šΓ—π‘Ÿπ‘ŸAPR into effective annual rate: (1 +𝐸𝐸𝐴𝐴𝐴𝐴) =οΏ½1 +π΄π΄π‘ƒπ‘ƒπ΄π΄π‘šπ‘šοΏ½π‘šπ‘šβ‡’ 𝐸𝐸𝐴𝐴𝐴𝐴=οΏ½1 +π΄π΄π‘ƒπ‘ƒπ΄π΄π‘šπ‘šοΏ½π‘šπ‘šβˆ’1APR into effective period rate (cash flow period): π‘Ÿπ‘Ÿ=οΏ½1 +π΄π΄π‘ƒπ‘ƒπ΄π΄π‘šπ‘šοΏ½π‘šπ‘š/π‘˜π‘˜βˆ’1Present value of a stream of cash flows: 𝑃𝑃𝑉𝑉0=𝐢𝐢0+𝐢𝐢1(1 +π‘Ÿπ‘Ÿ)+𝐢𝐢2(1 +π‘Ÿπ‘Ÿ)2+β‹―+𝐢𝐢𝑛𝑛(1 +π‘Ÿπ‘Ÿ)𝑛𝑛Future value of a stream of cash flows: 𝐹𝐹𝑉𝑉𝑛𝑛=𝐢𝐢0Γ— (1 +π‘Ÿπ‘Ÿ)𝑛𝑛+𝐢𝐢1Γ— (1 +π‘Ÿπ‘Ÿ)π‘›π‘›βˆ’1+𝐢𝐢2Γ— (1 +π‘Ÿπ‘Ÿ)π‘›π‘›βˆ’2+β‹―+𝐢𝐢𝑛𝑛Present value of a Perpetuity: 𝑃𝑃𝑉𝑉0=πΆπΆπ‘Ÿπ‘ŸPresent value of an Annuity: 𝑃𝑃𝑉𝑉0=𝐢𝐢×�1βˆ’(1 +π‘Ÿπ‘Ÿ)βˆ’π‘›π‘›π‘Ÿπ‘ŸοΏ½Future value of an Annuity: 𝐹𝐹𝑉𝑉𝑛𝑛=𝐢𝐢×�(1 +π‘Ÿπ‘Ÿ)π‘›π‘›βˆ’1π‘Ÿπ‘ŸοΏ½One-Period Investor Stock Price: 𝑃𝑃0=𝐷𝐷1+𝑃𝑃11 +π‘Ÿπ‘Ÿ
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COMM 298 2024W1 MIDTERM EXAM FORMULA SHEET PAGE 2 of 2 Stock Return: π‘Ÿπ‘Ÿ=𝐷𝐷1𝑃𝑃0οΏ½Dividend Yield+𝑃𝑃1βˆ’ 𝑃𝑃0𝑃𝑃0οΏ½οΏ½οΏ½οΏ½οΏ½Capital GainYieldDividend discount model (DDM 𝑃𝑃0=𝐷𝐷11 +π‘Ÿπ‘Ÿ+𝐷𝐷2(1 +π‘Ÿπ‘Ÿ)2+𝐷𝐷3(1 +π‘Ÿπ‘Ÿ)3+β‹―Constant Dividend Growth Model: 𝑃𝑃0=𝐷𝐷0(1 +𝑔𝑔)π‘Ÿπ‘Ÿ βˆ’ 𝑔𝑔=𝐷𝐷1π‘Ÿπ‘Ÿ βˆ’ 𝑔𝑔Cum-Dividend Stock Price: 𝑃𝑃0π‘π‘π‘π‘π‘šπ‘š=𝐷𝐷0+𝑃𝑃0𝑒𝑒𝑒𝑒Price Earnings Ratio: 𝑃𝑃𝐸𝐸=𝑃𝑃0𝐸𝐸𝑃𝑃𝑆𝑆1=Payout Ratioπ‘Ÿπ‘Ÿ βˆ’ 𝑔𝑔Zero-coupon bond price: 𝑃𝑃0=𝐹𝐹(1 +π‘Ÿπ‘Ÿ)𝑛𝑛Bond YTM: π‘Œπ‘Œπ‘Œπ‘Œπ‘Œπ‘Œ=π‘Ÿπ‘ŸΓ—π‘šπ‘šCoupon payment: 𝐼𝐼=πΉπΉΓ—πΆπΆπ΄π΄π‘˜π‘˜Coupon bond price: 𝑃𝑃0=𝐼𝐼×�1βˆ’(1 +π‘Ÿπ‘Ÿ)βˆ’π‘›π‘›π‘Ÿπ‘ŸοΏ½+𝐹𝐹(1 +π‘Ÿπ‘Ÿ)𝑛𝑛
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