With an interest

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(i_r) =  (nominal interest rate)

Bond Value = (PV of coupon payments) + (PV of face value)

Expected Yeild to Maturity = YTM_{No Default} x (1 - prob. Default) + YTM _Default x  prob. Default

Fischer effect:

nominal interest rate = real interest rate with the effect of inflation

r_Nominal = r_real + r_inflation + (r_real x r_inflation) ^{** use decimals}

Shares:

Constant growth model:

Ordinary Shares:

V_E = P₀= D₁/(R_e - g). Where the div. For a future year is given

V_{E =}  D₀ (1+g) / (R_e - g). Where the dividend for a prev. Yr is given

Preference Shares:

V_p= D_p / R_p ^{** 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