financial management

1. TYBBA
AFM
“TIME VALUE OF MONEY”
FORMULAS
1. COMPOUNDING VALUE OF A LUMPSUM AMOUNT
‘OR’
F = P(FVIF)
2. COMPOUNDING VALUE OF AN ANNUITY IF INVESTMENT MADE AT END
OF THE YEAR
‘OR’
F = A(FVIFA)
3. COMPOUNDING VALUE OF AN ANNUITY IF INVESTMENT MADE AT
BEGENNING OF THE YEAR
‘OR’
F = A(FVIFA)(1+i)
4. PRESENT VALUE OF A SINGLE AMOUNT
‘OR’
‘OR’
P = F(PVIF)
H.D.PAWAR 9824315606

2. TYBBA
AFM
5. PRESENT VALUE OF AN ANNUITY IF AMOUNT TO BE RECEIVED AT THE
END OF YEAR
OR
P = A(PVIFA)
6. PRESENT VALUE OF AN ANNUITY IF AMOUNT TO BE RECEIVED IN THE
BIGINNING OF THE YEAR
OR
P = A(PVIFA) (1+i)
7. PRESENT VALUE OF PERPECTUITY
8. EFFECTIVE INTEREST RATE
9. MULTIPERIOD COMPOUNDING
H.D.PAWAR 9824315606

3. TYBBA
AFM
FORMULAS
VALUATION OF BOND AND SECURITIES
1. VALUATION OF PERPECTUAL/IRREDEEMABLE BOND(DEBENTURE):
2. VALUATION OF REDEEMABLE BOND (DEBENTURE):
‘OR’
V = I (PVIFA) + MV (PVIF)
3. APPROXIMATE YIELD TO MATURITY(YTM):
‘OR’
TRIAL AND ERROR METHOD
4. BOND VALUE AMORTISATION:
5. VALUATION OF PERPCTUAL PREFERENCE SHARE:
6. VALUATION OF REDEEMABLE PREFERENCE SHARE:
H.D.PAWAR 9824315606

4. TYBBA
AFM
7. VALUATION OF EQUITY SHARE:
CONSTENT GROWTH MODEL
TWO STAGE GROWTH MODEL
8. H- MODEL
Were: P0 = Intrinsic value of the share
D0 =Current dividend per share
r = Rate of return expected by investors
gn = Normal long run growth rate
ga = Current growth rate
H = One half of the period during which ga will level off to gn
H.D.PAWAR 9824315606