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FIN205- Overview - Coggle Diagram
FIN205- Overview
Basics
PV
FV
PMT
NPER
RATE- annuity yield
NPV
IRR- uneven CF yield
Goal-seek
CF at constant interval
Ordinary annuity (CF at constant intervals for fixed period)
Constant
PV
Formula
Function = PV / NPV
Individual CF method
PMT/CF
Formula
Nper
Formula
Goal-seek
FV
Formula
Rate
Formula
Goal-seek
Growing
PV
Formula (depends on 1st CF in timeline)
Individual CF method- compute individual CF'S PV, then sum together
Function
Using growth adjusted k (not taught)
Using NPV (to compute individual CF first)
FV
Formula
Perpetuity (CF at constant intervals forever)
Constant
PV
Formula
Growing
PV
PV
Variants
Constant vs growing
Ordinary vs annuity due
Valuation
Bonds
Price/value
Function- PV / Price
Function of r/s btw YTM (current market int rate) and coupon rate
YTM
Function- Yield
YTM = market's int rate?
Stock
Price
Dividend discount model (DDM)
If selling- PV of future dividends within holding period and price of sold share
If holding- PV of all future dividends
Variant
Zero-growth CS- constant div i.e. perpetuity
Constant growth
Dividend
Dividend/Gordon growth model
Rate
Estimating growth rate
Sustainable growth rate
Non-constant growth
2 stage formula
Alternate CF method
Count div/cf for 1st stage
Calculate Pt for 2nd stage
Sum Pt and divt
NPV relevant values
Free CF to equity (FCFE)- applicable for stocks that doesnt pay div
Possible negative FCFE
Huge losses
Many capex, bought new PPE
WC changes
High debt repayment
Potential div payout after meeting obligations to stakeholders
Others
APR vs. EAR
EAR- accounts for compounding effects
APR- quoted annual rate
