cumulative final equations

StudyBlue printing of cumulative final equations html, body, div, span, applet, object, iframe, h1, h2, h3, h4, h5, h6, p, blockquote, pre, a, abbr, acronym, address, big, cite, code, del, dfn, em, font, img, ins, kbd, q, s, samp, small, strike, strong, sub, sup, tt, var, b, u, i, center, fieldset, form, label, legend, table, caption, tbody, tfoot, thead, tr, th, td { margin: 0; padding: 0; border: 0; outline: 0; font-size: 100%; background: transparent; } body { line-height: 1; } blockquote, q { quotes: none; } blockquote:before, blockquote:after, q:before, q:after { content: ''; content: none; } /* remember to define focus styles! */ :focus { outline: 0; } /* remember to highlight inserts somehow! */ ins { text-decoration: none; } del { text-decoration: line-through; } /* tables still need 'cellspacing="0"' in the markup */ table { border-collapse: collapse; border-spacing: 0; } /* end RESET */ .header { min-width:800px; } .logo { padding:6px 20px 2px 20px; margin:0; font-size:25px; font-weight:bold; color:#808285; position:relative; border-bottom: 1px solid #c5c5c5; } .logo-blue { color:#70adc4; } .logo-desc { font-weight:normal; font-size:19px; color:#cccccc; margin-top:50px; position:absolute; display: none; } .back-button { position:absolute; top:20px; right:20px; font-size:13px; line-height:25px; color:rgb(0,175,225); font-weight:normal; } .back-button a { color:rgb(0,175,225); } .instructions { padding:0; margin:0; width:100%; position:relative; color:rgb(100,100,100); } .step-holder { border-left:1px solid #ededed; margin-left:20px; } .steps { padding:15px 0; float:left; width:24%; border-right:1px solid #ededed; text-align:center; } .steps-01 { } .steps-02 { } .steps-03 { } .steps-04 { } .label { padding:5px 10px; } .print-button { } .print-button a { background-color:rgb(0,175,225); color:white; line-height: 19px; padding:9px 8px 5px 30px; font-size:14px; text-decoration:none; background-image: url(images/printer.png); background-repeat: no-repeat; background-position: 7px 50%; -moz-border-radius: 5px; -webkit-border-radius: 5px; } .print-button a:hover { background-color:black; } .theNote .content { width: 8.0in !important; margin: 5px auto; padding:20px; background-color:white; } .theNote .header { border-bottom: 1px dashed #C8C8C8; font-size: 17px; padding: 0 0 10px; line-height: 19px; color: #00ADE1; min-width:500px; } .theNote .body { font-size: 14px; line-height: 19px; padding: 10px 0; } .theNote{ padding:6px 0; clear:both; background-color: rgb(200,200,200); } .theNote h3{ color: rgb(100,100,100); } .theNote h1, .theNote h3{ background-color:white; padding:2px 20px; width:8.0in !important; margin: 0 auto; font-size: 15px; } .theNote h1{ padding-top: 10px; font-size: 15px; } .theNote h1:first-child{ font-size: 20px; } .theNote h3 { font-size: 14px; font-weight: normal; } #options { border: 3px double #ccc; padding: 5px 12px; margin: 10px 50px 10px 20px; float: left; } #info { border-top: 1px solid #ccc; padding-top: 5px; font-style: italic; } li { margin: 5px 10px 5px 25px; } ul li { list-style: disc; } ol li { list-style: decimal; } img { border: 0; } table { clear: both; width: 100%; border: 1px solid #c5c5c5; border-width: 1px 0; margin: 0; page-break-after: always; } table#page { page-break-after: auto; } td { text-align: center; font-size: 12px; border-bottom: 1px dashed #c5c5c5; height: 1.75in; width: 50%; padding-left: 15px; } .leftside { border-right: 1px solid #cccccc; padding: 0 15px 0 0; } .bottom td { border-bottom: none; } .clearfix { clear:both; line-height:1px; height:1px; } img { max-width:80%; max-height:150px; margin:20px; } @media print {.header { display: none; } .content .header{ display:inherit; } table { border: 1px dashed #bbb; border-width: 1px 0; } .theNote{ background-color:white; } } shareholder wealth maximization total shareholder wealth = # of shares outstanding x market price per share example: t million shares outstanding market price per share = $35 value of firm = shareholder wealth = 35 (1 million shares) = $35 million common stock & capital surplus 300,000 shares @ $5 per share issued at $7.33 per share receive: 7.33 (300,000) = $2,199,000 7.33 - 5.00 = $2.33/share paid in excess of par value entries: common stock [5.00(300,000)] = 1,500,000 capital surplus [2.33(300,000)] = 699,000 total accounted for: 1,500,00 + 699,000 = $2,199,000 free cash flow FCF = operating cash flow - [net capital spending + change in net operating working capital] FCF = [EBIT(1-t) + depr. & amortization]-[capital expenditures + change in net operating working capital] FCF = [283.8 (1-0.4) + 100] - {230 + [(1,000 - 810) - (200-160)]} = 270.3 - [230 + 150] = (109.72) million marginal & average tax rates tax on income of $5000 = 10% tax on all above $5,000 = 15% earnings before tax: $25,000 tax calculation 5000 x .10 = 500 20,000 x .15 = 3,000 Total = 3,500 marginal tax: 15% average tax: 3500/25000 = 14% interest problem principal = 1000 rate = 9% F=P +I I=Prt F= P + Prt F = 1000 + (1000)(.09)(1) = 1000 + 90 = 1,090 in 1 year you have $1,000 in principle plus $90.00 in interest for a total of $1,090 at the end of the year compounding 7%, 3 periods factor = (1 + .07)^3 = 1.2250 $1 invested at 7% for 3 periods grows to $1.2250 12%, 5 periods factor = (1 + .12)^5 = 1.7623 $1 invested at 12% for 5 periods grows to $1.7623 rule of 72 double money at 4% 72/4 = 18 years periodic rates & APR at 12% periodic rate = APR/m # of periods at the periodic rate = nm m = # of compounding periods per year examples: annual m=1 .12/1 = .12 semiannual m=2 .12/2=.06 quarterly m=4 .12/4=.03 monthly m=12 .12/12=.01 risk free rate (1 + risk free rate) = (1 + nominal rate) (1+ inflation premium) example: r* = .02