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MANAGERIAL FINANCE FORMULA - Coggle Diagram
MANAGERIAL FINANCE FORMULA
Capital Budgeting
internal rate of return (IRR):
net present value (NPV):
Bonds and Their Valuation
value of financial assets
Opportunity cost of debt: discount rate (ri) is the Opportunity Cost of Capital
ri = r* + IP + MRP + DRP + LP
Value a bond:
Cost of Capital
cost of preferred stock:
weighted average cost of capital (WACC): (% of dbt)(after-tax cost of dbt)+(% of pref. stck)(cost of pref.stck)+(% of cmmn stck)(cost of cmmn stck)
cost of common equity:
Capital Structure and Dividend Policy
breakeven quantity:
residual dividend model:
stock price after split: new price = old price x (No. old shares/ No. new shares)
Stock Valuation
preferred stock valued:
expected return on common stock
Discounted dividend model:
constant growth stock:
corporate valuation model:
