With an interest

Classified in Economy

Written at on English with a size of 1.83 KB.

Bonds and shares:


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


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 / R** preference shares provide consistent (no growth) dividends. 

Calculator functions:


to store: [STO]; variable (letter)

to recall [RCL]; variable (letter)

To clear all:


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