Financial

Management
Cheatsheet
A quick guide
to your Mid Term Exam

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 Key Checks before
attempting the Mid-Term
Exam

1. Revise the formulas taught in the videos

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and by the faculty

2. Go through the LVC recording
3. Attempt the practice quizzes provided in
your LMS
4. The Mid Term Exam will be based on your
Week 1 & 2 Content and the associated
LVCs

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 Key formulas to check
upon
Finance and Time Value of Money
Future Value (FV)
FV = PV * (1 + r)^n
where PV = Present Value, r = interest rate, n =
number of periods

Present Value (PV): PV = FV / (1 + r)^n

Compounding and Discounting

Compounded Future Value (FV):

FV = PV * (1 + r/n)^(nt)
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where n = number of compounding periods per

year, t = number of years

Discounted Present Value (PV):

PV = FV / (1 + r/n)^(nt)

Calculating Risk
Variance (σ^2):
σ^2 = Σ [(X - μ)^2 / n]
where X = individual data point, μ = mean, n =
number of data points

Standard Deviation (σ):

σ = √σ^2

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 Calculating Return

Simple Return:
Simple Return = (Ending Value - Beginning
Value) / Beginning Value

Compound Annual Growth Rate (CAGR):

CAGR = [(Ending Value / Beginning
Value)^(1/n)] - 1
where n = number of years

Capital Budgeting Techniques

Net Present Value (NPV):

NPV = Σ (Cash Flow / (1 + r)^t)
where r = discount rate, t = time period
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Internal Rate of Return (IRR):

NPV = Σ (Cash Flow / (1 + IRR)^t) = 0

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 Cost of Equity and Retained Earnings:

Cost of Equity using Dividend Discount Model

(DDM):
Cost of Equity = (Dividends per Share / Current
Stock Price) + Growth Rate of Dividends

Cost of Debt

Cost of Debt (Kd) = Interest Expense / Total

Debt

Where:
Interest Expense: The annual interest payments
on the debt.
Total Debt: The total amount of debt (short-term
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and long-term) that a company has.

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 Read the instructions carefully :
This will be a subjective type
exam for 35 marks, with a
duration of 130 minutes, where 10
additional minutes are provided
for file upload.
You are not allowed to copy
content from books or the
internet.
Once you start to attempt, you
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cannot pause and continue at a

later stage.
Do NOT refresh the browser while
taking the test.
Ensure there is a proper internet
connection while taking this
exam.

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 Points to remember while
uploading file:

Make sure to include the excel

screenshots in your report
wherever required along with the
inferences.

The exam duration is 130 mins. An

additional 10-minute allowance is
given to ensure a smooth file
upload process.
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You need to upload two seperate

files for each question.

Please upload the correct file

pertaining to the exact question.

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