Formula Sheet

BFW1001 Foundations of Finance – Semester 1, 2022

Xn = X0 (1 + rb )n (L1.2)
Xn = X0 (1 + ri )n (L1.3)
Vn
V0 = (L1.4)
(1 + r)n
n
C1 C2 Cn X Ct
V0 = + + · · · + = (L1.5)
(1 + r) (1 + r)2 (1 + r)n t=1
(1 + r)t
rm = r × m (L2.1)
Xt = X0 etrc (L2.4)
 rm m
(1 + rA ) = 1 + = erc (L2.6)
m
C
V0 = (L2.7)
r
 C
r−g
if r > g
V0 = (L2.8)
∞ if r ≤ g and C > 0
 
C 1
V0 = 1− (L2.9)
r (1 + r)n
Vn
V0 = (L3.1)
(1 + rf )n
h i
E Ṽn
V0 = (L3.3)
(1 + k)n
h i h i h i
E C̃1 E C̃2 E C̃n
V0 = + + ··· + (L3.4)
(1 + k) (1 + k)2 (1 + k)n
 
Cov R̃m , R̃i σ
ki = rf + βi (µm − rf ) , βi =   = m,i 2
(L3.6)
V ar R̃m σm

C1 C2 Cn
V0 = C0 + 1 + 2 + ··· + (4.∗)
(1 + k) (1 + k) (1 + k)n
P0 = Fv (1 − D) (4.2)
360
idy = D × (4.3)
h
Prof. Keshab Shrestha Tutorial 3 BFW1001 – Page 1
  
h 
P0 = Fv 1 − idy × (4.4)

| {z360}

D
m
rA = (1 + R) − 1 (4.5)
F v − P0 365
return = R = m= .
P0 h
∞
D1 D2 D3 X Dt
V0 = + 2 + + ··· = (5.1)
(1 + k) (1 + k) (1 + k)3 t=1
(1 + k)t
t t−1
Dt = D0 (1 + g) = D1 (1 + g) (5.2)
 D1
k−g
if k > g
V0 = (5.3)
∞ if k ≤ g and D1 > 0

Prof. Keshab Shrestha Tutorial 3 BFW1001 – Page 2