1.1 Lump Sum (Single) Payment 1.1.1 Simple Interest (Short-term Debt Valuation - PV and Implied Yield) 1.1.1a. FV PV = 1+ixt 1.1.1c. 1 FV i=-x 1) PV 1.1.1b. FVPV (1+ixt) 1.1.1d. 1 FV t=x( 1) PV 1.1.2a. PV FV (1+r)n = FV (1+r) 1.1.2 Compound Interest (Long-term Debt Valuation - PV of Face Value) 1.1.2b. FVPV (1+r) n 1.1.2c. 1.1.2d. 1.1.2e. FV. n FV r = 1 1 Ln(pv n = ie = (1+)m m PV Ln(1+r) m 1 1.2 Cash Flow Streams (Multiple Payments) with Compound Interest 1.2.1 Multiple Cash Flows (Equity Valuation - PV of Uneven Dividend Stream) PV = = 1.2.1a. n j=1 n = j=1 CF (1+r) [CF; (1+r)-] n 1.2.1b FV = =[CF; (1+r)^-1] j=1 1.2.2 Ordinary Annuity (Long-term Debt Valuation - PV of Coupon Stream) 1.2.2b 1.2.2a [1 (1+r)"]) ([(1 + r)" 1]) - PV = PMT x FV = PMT X r r 1.2.3 Annuity Due 1.2.3a MAF101 Fundamental of Finance 1.2.3b - [1 (1+r)"]) PV = PMT x (1 ([(1+r) 1]) - r FV = PMT X +r) (1+r 1.2.4 PV of Perpetuity (Preferred Share) and Growing Perpetuity (Ordinary Share) 1.2.4a Perpetuity PMT PVj-1 r 1.2.4b Growing Perpetuity CF PVj-1 = r-g First payment made at time j (j1) First cash flow paid at time j (j1), r>g