Formula Sheet

Corporate Finance
A = L + SE

MVE
MB
BVE
DE

TD
TE

DA

TD
TA

EBIT
ICR
IE
EV = MVE + D - C

EPS

NI
SO

OM

OI
TS

NPM

NI
TS

CA
CR
CL
QR

CAEI
CL

ARD

AR
ADS

NI
ROE
BVE
P/E

MC
SP

NI
EPS

RE = NI D
NPV = PV(ACF)
P(S) = PV(CF)

GAEY
IC

P(C) = P(A+B) = P(A)+P(B)

E R

E GAEY
IC

rs = r f + RPs

FVt C 1 r n

PVt

Cn

1 r n
N

PVt

Cn

1 r
n 0

FVt PV 1 r n

PVt

C
r

PVt

C
r

FVt

C
1 r N 1
r

PVt

C
rg

PVt

C
r-g

FVt

C
1 r N 1 g N
rg

1 r

1 - 1 + g

1+ r

NPV PV PMT

1
RATE

1 RATE

P
1
1
1

r
1 r N

r t 1 r n 1

Page 1 of 5

NPER

FV

1 RATE N

rt

APR
k

APR

1 EAR 1

FV

P
k

1 YTM n n

rn = YTMn

r i
rr
r i
1 i

CPN
y

r r r 1

CPN
CPN
CPN FV

2
1 YTM 1 1 YTM 2
1 YTM n n

Div1 P1
1 rE

rE

Div1 P1
Div1 P1 P0 Div1
1

g
P0
P0
P0
P0

EVAn = Cn rI n-1 - Dn

NPV
PI
RC
IT EBIT C

UNI EBIT 1 c R E D 1 c
NWC = CA CL = C + I + AR AP

FCF R E 1 c CE NWC c D

1 y

FV

1 y N

Div1 Div2 P2

1 rE 1 rE 2

Div N
PN
Div1
Div2

2
N
1 rE 1 rE
1 rE 1 rE N

CG = SP BV
ATCF = SP (C x CG)

FCF UNI D CE NWC

FCF R E D 1 c D CE NWC

Divn

1 r
n 1

P0

Div1
rE g

CE NI RONI
NI E RR
g RR RONI

PN

CPN

CR FV
NCPR

Div N 1
rE g

Div N
Div1
Div 2
1

2
N
1 rE 1 rE
1 rE 1 rE N

P0

PV FTDAR
SO0

Page 2 of 5

Div N 1

rE g

EV = MVE + D C

FCF EBIT 1 C D CD NWC

Vi
TVP

xi

xR

RP

V0 = PV(FFCF)

E RP

x E R

P0

V0 C0 D0
SO0

V0

FCFN
VN
FCF1
FCF2

2
N
1 rWACC 1 rWACC
1 rWACC 1 rWACCCov
N Ri , R j

VN

pR R

Var R

SD R

Rt 1

pR R E R 2

Divt 1 Pt 1 Pt

Pt
Pt

1
T

FCFN

SE A

t 1

Var RP

x Cov R , R

Var RP

Var RP

1
AVIS 1 1 ACBS
n
n

SD R P

xi x j Cov Ri , R j

SD Ri Corr Ri , R P

SD Ri Corr Ri , RP

x
i

SD Ri

E R xP 1 x r f xE R P r f x E R P r f

SR

SD( IO)
NO

iP

MRP = E[Rmkt] - r f

SD Ri SD R j

1 x 2Var rf x 2Var RP 21 x xCov rf , RP

SD(RxP) = xSD(RP)

E R rf E RMkt r f

Cov Ri , R j

Var R p x12 SD R1 2 x 22 SD R2 2 2 x1 x 2 Corr R1 , R2 SD R

SD RxP

1
T 1

t 1

Ri R j ,t R j

i ,t

Var R p x12Var R1 x22Var R2 2 x1 x2Cov R1 , R2

Var R

1
T 1

Corr Ri , R j

Var R

1+RL = (1+RS1) (1+RS2) (1+RS3).

R

P0
Div1 EPS1
DPR

EPS1
rE g
rE g

V0
FCF1 EBITDA1

EBITDA1
rwacc g FCF
E R

Cov Ri , R j E Ri E Ri R j E R j

1 g wacc
FCFN 1

rwacc g FCF rwacc g FCF

P/E

E RP r f
SD RP

SD Ri Corr Ri , RP Cov Ri , RP

SD RP
Var RP

Page 3 of 5

ri rf iP E RP rf

RE RU

E Ri ri rf iEff E REff rf

SD Ri Corr Ri , R Eff

iEff

SD R Eff

ri rf iEff E REff rf

E
D

rE
rD rU rA
DE
DE

SD R xCML xSD RMkt

E Ri ri rf i E RMkt rf

x
i

xi

E 1 U
E

ND = D CRFS

CFL = CFU + ITS

ITS = CTR x IP

VL = VU + PV(ITS)
PV(ITS) = C x D

Pi

VL = VU + CD

E
D

rE
rD 1 C
ED
ED

MV j

rWACC

Ri rf i i RMkt rf i

E Ri ri r* i E RMkt r *
2
1
ABSi i 1.0
3
3

rMkt

D
U D
E

SD Ri Corr Ri , RMkt Cov Ri , RMkt

SD RMkt
Var RMkt

MVi

E
D
E
D
ED
ED

E U

s E Rs rs E Rs rf s E RMkt rf
MVi = Ni

D
rU rD
E

rWACC

E R xCML r f x E RMkt r f

i iMkt

rE rU

D
RU RD
E

Div1
g
P0

E = A D
E+D=U=A

E
D
RE
RD RU R A
ED
ED

E
D
D

rE
rD
rD C
E

D
E

D
E
D

rWACC

* 1

1 c 1 e
1 i

VL = VU + D
*
ex

e i
1 i

VL = VU + PV(ITS) PV(FDC)
VL = VU + PV(ITS) PV(FDC) PV(ACD) + PV(ABD)

Pcum Pex 1 g Div1 d

Page 4 of 5

Pcum Pex Div 1 d*

Sx = S PV(Div)
Sx = S/(1+q)

d g

d*

= N(d1)

1 g

Pcum

1 d
Pex Div 0
1 g

1 c 1 g
1

Pretain Pcum
*
retain

B = -PV(K)N(d2)

*
1 retain

= -[1-N(d1)]
B = PV(K)[1-N(d2)]

C S N d1 K e rT N d 2

1 i

C = max(S K,0)
P = max(K S,0)
S + P = PV(K) + C

2
S
r
2
K
T

ln
d1

d 2 d1 T
rf er 1

P = C S + PV(K)
S + P = PV(K) + PV(Div) + C
P = C S + PV(K) + PV(Div)
Su + (1+r f)B = Cu
Sd + (1+r f)B = Cd

Cu C d
Su S d

Cd S d
1 rf

r = ln(1 + rf)

option

S
S
S B

D 1

A
E

U 1 1 U
D
D

E
D

1
E

= N(d1)

C = S + B

C S N d1 PV K N d 2

d1

PV K T
2
T

ln

d 2 d1 T

P PV K 1 N d 2 S 1 N d1
Page 5 of 5