Do not forget the formula
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Level I

Corporate Issues;

NPV = CF0 + CF1/(1+r)^1 + … +CFn/(1+r)^n
NPV = 0 = CF0 + CF1/(1+IRR+ … +CFn/(1+IRR)^n
Change of Stock price = NPV/#shares
NPV with option = NPV + value of option – cost of option (BASE)
WACC = Wd * rd * (1-t) + Wps * rps + Wcs * rcs
rd = YTM p0 = PMT/(1+YTM)^1 + … + PMT/(1+YTM)^n + FV/(1+YTM)^n
re = rcs
rps = Dps/Pps
DIVIDEND DISCOUNT MODEL APPROACH: rcs =D1/P0 + g g = (1-payout ratio) * ROE
BUILD UP APPROACH: re = rd + Risk premium rd is before tax cost
CAPM: re = rf + beta * (rm - rf) rf = risk free rate rm = expected rate of return on market portfolio
rm - rf = risk premium or market premium
Adjusted β = (2/3)*Unadjusted β + (1/3)*1
1. β comp nL = β comp L/(1+(1-t)*(D comp/E comp))
2. β project nL = β comp nL
3. β project L = β project nL * (1 + (1-t) * (D project/E project))
NPVadj = NPV – flotation cost * (1-t)
MM (w/o tax): V leveraged = V unleveraged
re = (r0-rd) * D/E + r0 WACC = r0
MM (w/ tax): V leveraged = V unleveraged + t*D
re = (r0-rd)*(1-t)*D/E + r0 WACC = r0
V levered = Vunlevered + t*D -PV(costs of financial distress)
DOL = %change of EBIT/%change of Q
= (Q*(P-V))/(Q*(P-V)-F) = (EBIT + F)/EBIT
DFL = %change of NI/%change of EBIT
=Q*(P-V)-F / Q*(P-V)-F-I = EBIT/(EBIT – I)
DTL = DOL * DFL = %change of NI/%change of Q
=Q*(P-V)/Q*(P-V) -F-I = (EBIT + F)/(EBIT – I)
Breakeven point Q: Qbe = (F+I)/(P-V) NI=0
Operating beakeven point Q: Qobe = F/(P-V) EBIT=0

Equity Investments;

Pc = P0 * ((1 – initial margin rate)/(1 – maintenance margin rate)) Pc = Margin call
V = (niPi + …)/D
PR1 = (v1 – v0)/v0 = wiPRi + …
TR1 = (v1 – v0 + D1)/v0 = wiTRi + …
Price weighting:
Price return = %change index value
Index value = (P1 + P2 + P3 + …)/n
Stock-split e.g 1 to 2 (p1 + p2 + …)/x = old index value => x = …
Market-capitalization weight:
Index value = (P1 * Q1) + (P2 * Q2) + …
Return = (V end – V begin + Dividend)/V begin = (1 proportions * 1 %change) + (2 proportions * 2 %change) + …
Equal weighting:
Return = ((Va1/Va0) + (Vb1/Vb0) + …)/n
Index value = Return * base value
Fundamentally weighting:
Eg D/P
DDM
V0 = ∑ Di/(1 + r)^i
V0 = ∑ FCFEi/(1 + re)^i
Gordon Growth Model:
V0 = D1/(r – g) g = retention rate * ROE = (1 – divid payout ratio) * ROE
Two-stage DDM models:
V0 = ∑ (D0 * (1 + gh)^i)/(1 + r)^i + Vn/(1 + r)^n Vn = Dn+1/(r – gs)
Preferred Stock valuation: (Perpetual)
V0 = D/r
Price multiple:
Leading: P0/E1 = (D1/E1)/(r – g) = (1 – b)/(r – g)
Trailing: P0/E0 = (D1/E0)/(r – g) = ((D0 * (1 + g))/E0)/(r – g) = ((1 – b)(1 + g))/(r – g)
b = retention rate
Enterprise value multiple:
Enterprise value multiple = enterprise value/EBITDA
Enterprise value = market value of common stock
+ market value of preferred stock
+market value of debt
-cash and cash equivalents
Market value of equity:
Market value of equity = MV asset – MV liabilities

Fixed Income;