With an interest
Classified in Economy
Written at on English with a size of 1.83 KB.
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Bonds and shares:
Bonds:
coupon rate = % of Face Value paid out annually
coupon = interest paid
Par / face Value = the amount to be repaid at maturity
Yeild = Interest Amount (j) = Interest Rate(ir) = (nominal interest rate)
Bond Value = (PV of coupon payments) + (PV of face value)
Expected Yeild to Maturity = YTMNo Default x (1 - prob. Default) + YTM Default x prob. Default
Fischer effect:
nominal interest rate = real interest rate with the effect of inflation
rNominal = rreal + rinflation + (rreal x rinflation) ** use decimals
Shares:
Constant growth model:
Ordinary Shares:
VE = P0= D1/(Re - g). Where the div. For a future year is given
VE = D0 (1+g) / (Re - g). Where the dividend for a prev. Yr is given
Preference Shares:
Vp= Dp / Rp ** preference shares provide consistent (no growth) dividends.
Calculator functions:
Memory:
to store: [STO]; variable (letter)
to recall [RCL]; variable (letter)
To clear all:
[2ndF];[Alpha];0;0