Formulae Sheet

Economic order quantity

2CooD
Economic order quantity =
C
Economic order quantityHH =

2CoD
CH

Miller Orr Model

Miller Orr Model
Miller Orr Model
1
Return point = Lower limit + ( x sp
pread)
1
3
Return point = Lower limit + ( x sp
pread)
3
1
1

3
3
4
4

x transaction cost x variance of cash flows 33

Spread = 3
3
x transaction
cost x variance of cash flows
interest rate
Spread = 3 4
interest rate
The Capital Asset Pricing Model

The asset beta formula

The Growth Model

Gordons growth approximation

The weighted average cost of capital

The Fisher formula

Purchasing power parity and interest rate parity

1
3

  

       


   
      
  









































 








































 








 





























 




























 




























 




























































 



 










 










 









































 







 






 
























 






 



































































 



























 






























 















































 

       



  

   
    
  





























 












 

 





 




 



 








 
























 







 




 







 

















 












 



 





























 
 









 
 

 


























 













 






























































 
 






 

 



 









 











 

















 








 



 


 


 


 








































 





























 
 


















 
 

 












 
 


















 











End of Question Paper

9