Ch 2 · Time Value of Money & Cost of Capital

🧮 Formula sheet

1. 1.PV = FV / (1+r)ⁿ
2. 2.Kd (after tax) = Interest × (1−t) / Net Proceeds
3. 3.Kp = Pref Dividend / Net Proceeds
4. 4.Ke (CAPM) = Rf + β(Rm − Rf)
5. 5.Ke (DDM) = (D₁ / P₀) + g
6. 6.WACC = (E/V)Ke + (D/V)Kd(1−t) + (P/V)Kp