Formulas

1.
2.
3.
4.
5.
6.

EPS = Earning / No of shares.

PE ratio = MV of share / EPS.
MV of share = EPS x PE ratio.
No. of shares to be issued = MV of further issue / Proposed right share price.
Ex right price = Total MV of equity / (Existing No. of share + New share issued).
MV of debt = Future cash flows of interest and redemption discounted with prevailing
market interest rate.

( )
)
7. Annual equivalent rate = (
(
) so monthly rate
.
8. Installment of debt: loan amount / annuity factor = repetitive cash flow.
9. Annualized cash flow (equivalent annual cost) = PV of first cycle / annuity factor.
10. In case of inflation only LCM method applicable.
11. In LCM method calculate PV of cash flows of each year but new purchase not include in
last year.

12. Correlation coefficient formula:

13. Percentage relation = 100

14. Coefficient of determination
15. Return of portfolio = r portfolio=
16. risk of portfolio.(decimal correlation)

) (

) +*

)(

)
(

) +

or weight