Formulas

During the past year, the market price of Kapco common stock has increased from $47 to $50 per share. Over that period, Kapco's earnings per share (EPS) have increased from $2.00 to $2.50 per share, and their dividend payout ratio has decreased from 50% to 40%. What is the annual dividend?

$1.00 ($2.50*40%)

During the past year, the market price of Kapco common stock has increased from $47 to $50 per share. Over that period, Kapco's earnings per share (EPS) have increased from $2.00 to $2.50 per share, and their dividend payout ratio has decreased from 50% to 40%. What is the current yield on Kapco common stock?

2% ($50/$1)

Rule of 72

72 / known interest rate or years

Current yield (stock)

Annual dividend / Current market price

Current yield (debt security)

Annual interest / Current market price

NAV of mutual fund share

Fund NAV / Number of shares outstanding

Number of shares for conversion

Par value / Conversion price

Gross Margin

Revenue - COGS / Revenue

CAPM

Risk-free rate + beta coefficient (expected market return - risk-free rate)

Average market price

Share price total / Number of investments

Dollar cost average

Total dollars invested / Number of shares purchased

Inflation-adjusted (real) return

Total return - CPI

After-tax return

Total return - marginal tax bracket

Annualized return

Total return on an annualized basis

Sharpe ratio

actual return - RF / standard deviation

Alpha (RF given)

(Actual return - RF) - (beta x [market return - RF])

Alpha (RF not given)

Actual return - (beta x market return)

Shareholder's equity

Assets - liabilities

Parity

Bond market value / Number of shares

Tax-free equivalent yield

Corporate rate x (100% - tax bracket)

Total return

Income (dividends or interest) + gain or less / original investment

Tax-equivalent yield

Municipal rate / (100% - tax bracket)