Fin 600-03 - Final Exam – Equation Sheet

Chapter 12:

• Additional Funds Needed (AFN) equation:

𝐴∗& 𝐿∗&
𝐴𝐹𝑁 = % ) Δ𝑆 − % ) Δ𝑆 − 𝑃𝑀(𝑆0 )(1 − 𝑃𝑂𝑅)
𝑆& 𝑆&
• Self-supporting growth equation:
𝑃𝑀(𝑆& )(1 − 𝑃𝑂𝑅)
𝑔6 = ∗
𝐴& − 𝐿∗& − 𝑃𝑀(𝑆& )(1 − 𝑃𝑂𝑅)

Chapter 14:

• Residual model distribution amount:

𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑠 = 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 − [(𝑇𝑎𝑟𝑔𝑒𝑡 𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜) × (𝑇𝑜𝑡𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐵𝑢𝑑𝑔𝑒𝑡)]
• Remaining no. of shares, post-repurchase:
𝐶𝑎𝑠ℎZ[\]V^_`T[
𝑁RSTU = 𝑁RVWSV − X a
𝑃RVWSV

Chapter 15:

• Operating breakeven point:

𝐹
𝑄cd =
𝑃−𝑉
• NOPAT:
𝑁𝑂𝑃𝐴𝑇 = 𝐸𝐵𝐼𝑇 ∙ (1 − 𝑇)
• ROIC:
𝑁𝑂𝑃𝐴𝑇
𝑅𝑂𝐼𝐶 =
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
• Miller’s leveraged value model w/ corporate and personal taxes:
(1 − 𝑇k )(1 − 𝑇Rl )
𝑉g = 𝑉h + j1 − n∙𝐷
(1 − 𝑇Rm )
• Hamada’s leveraged beta equation:
𝐷 𝑤m
𝛽g = 𝛽h ∙ p1 + (1 − 𝑇) % )q = 𝛽h ∙ p1 + (1 − 𝑇) % )q
𝐸 𝑤l
• No. of shares, post-leveraged repurchase:
𝑉s\[V`UWStT,v[w − 𝐷v[w
𝑁RSTU = 𝑁RVWSV ∙ j n
𝑉s\[V`UWStT,v[w − 𝐷sxy
• Stock price, post-repurchase:
𝑆RSTU z𝑉s\[V`UWStT,v[w − 𝐷sxy {
𝑃RSTU = =
𝑁RSTU 𝑁RVWSV

Chapter 16:

• Cash conversion cycle:

𝐶𝐶𝐶 = (𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝐶𝑜𝑛𝑣. 𝑃𝑑. ) + (𝐷𝑎𝑦𝑠 ~ 𝑆𝑎𝑙𝑒𝑠 𝑂/𝑆) − (𝑃𝑎𝑦𝑎𝑏𝑙𝑒𝑠 𝐷𝑒𝑓𝑒𝑟𝑟𝑎𝑙 𝑃𝑑. )
• Nominal cost formula:
𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 % 365 𝑑𝑎𝑦𝑠
𝑟vS• = ×
1 − 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 % (𝐷𝑎𝑦𝑠 𝑇𝑎𝑘𝑒𝑛) − (𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑃𝑑. )