Cost of Debt k d I +(MV −P 0)/n

kd =
0.6 P0 +0.4 MV
Cost of Preference Shares k p D+(MV −P0 )/n
kp=
0.6 P0 +0.4 MV
Cost of Retained Earnings/Equity, k e D
k e = 1 + g - DDM Model
P0
k e = r f + β (r m - r f ) – CAPM
D1
ke = + g – Floatation cost
P 0 (1−F)
Weighted Average Cost of Capital (WACC) WACC = w e k e + w p k p+ w d k d (1- t)
BEP in units Total Fixed Cost/Contribution margin per
unit
BEP in INR Total Fixed Cost/ Contribution margin ratio
Contribution margin per unit Selling price per unit– variable cost per unit
Contribution margin ratio Contribution margin per unit/ Selling price
per unit
Target Sales in units Total Fixed Cost + Desired Profit
Contribution margin per unit
Target Sales in INR Total Fixed Cost + Desired Profit
Contribution margin ratio
Operating Leverage = %ge change in EBIT / %ge change in sales
Total Contribution∈INR
=
Earningsbefore Interest∧Taxes (EBIT )
Financial Leverage EBIT
Earning Before Tax(EBT )
Total Leverage =DOL X DFL
Contribution
=
EBT
Expected Return (With probability) n
R= ∑( Ri )( P i )
i=1

√∑
Risk (with probability) n
2
= (R i−R) X ( Pi)
i=1
Portfolio return n
R p = ∑ ( W i )( R i )
i=1
Portfolio risk 2 2 2 2 2
σ P= W 1 σ 1 + W 2 σ 2 + 2W 1 W 2 ρ12 σ 1 σ 2
Future Value of a Single Amount F V n = PV(1+r )n
Present Value of a Single Amount PV = FV n /(1+r )
n

Shorter Compounding Period F V n = PV(1+r /m)mXn

[ ]
Effective Interest Rate r
n ×m
1+ −1
m

[ ]
Future Value of An Annuity regular n
F VA n = CF (1+r ) −1
r
 [ ]
Present Value of An Annuity regular n
(1+ r) −1
PVA n = C F
r (1+r )n

[ ]
Future Value of An Annuity Due n
F VA d = CF (1+r ) −1 ∗(1+r )
r

[ ]
Present Value of An Annuity Due (1+ r)n −1
PVA d = C F ∗(1+ r)
r (1+r )n
Present Value of a Perpetuity = CF/r
Present Value of Growing perpetuity Annuity
r−g

[ ]
Present Value of an Uneven Series n
CF t
V n= ∑ t
t =1 (1+r )