FORMULAR

FV = C0×(1 + r)T Perpetuity Annuity

PV =
CT
( 1+r )T
PV =
C
r
PV =
C
r[1−
1
(1+r )T ]
( )
mT
r C C
FV =C 0 × 1+ PV =
r−g
FV =
r
[ (1+r )T −1 ]
m
Stock valuation
Model 1 Model 2 Model 3

( )
DT +1

[ ]
T R−g 2
Div Div D1 (1+g1 )
P0 = P0 = P0 = 1− +
R R−g R−g1 (1+R )
T
(1+R)
T

Bond valuation

[ ]
C 1 F Growth Rate = Retention Rate X Return on New Investment
PV = 1− +
r (1+r )T (1+r )T