## Corporate Finance Basics

### Formula Quick Reference

###

### FORMULA FOR CAPM:

### R(r_{s})=
r_{f} + B_{s}
[E(r_{m})-r_{f}]

### FORMULA FOR DIVIDEND VALUATION:

### V= D1 /
{R(r)-g_{n}}

### FORMULA FOR NPV:

### NPV= -II + (sum of) [OCF/
(1+R(r))^{t}] +
[TCF/(1+R(r))^{n}]

### FORMULA FOR IRR:

### II=(sum of)
OCF_{t}/(1+IRR)^{t}+
TCF_{n}/(1+IRR)^{n}

### RATIO FOR PROFITABILITY INDEX:

### present value of future cash
flow/ initial investment

### FORMULA FOR FINDING PRESENT VALUE OF A SINGLE CASH FLOW
WITH COMPOUND INTERST:

### PV_{0}=FV_{n}(1+r)^{-n}

### FORMULA FOR FINDING FUTURE VALUE OF A SINGLE CASH FLOW
WITH SIMPLE INTEREST:

###
FV^{s}_{n}=PV_{0}(1+nr)

### FORMULA FOR FINDING FUTURE VALUE OF A SINGLE CASH FLOW
WITH COMPOUND INTEREST:

### FV_{n}=PV_{0}(1+r)^{n}

### FORMULA FOR FINDING WACC:

###
W_{d}(K_{d})(1-t)+(W_{pfd})(K_{pfd})
+(W_{e})(K_{e})

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