Discounted Cash Flow Evaluation思维导图模板大纲
FV & PV of muitiple cash flows
Annuities and Perpetuities
Annuity
finite series of equal payments occurring at regular intervals
example
ordinary annuity
first payment occurs at the end of the period
annuity due
first payment occurs at the beginning of the period
Perpetuity
infinite series of equal payments
Loan types and Loan Amortization
Effective Annual Rate vs. Annual Percentage Rate
EAR
the actual rate paid (or received) after accounting for compounding that occurs during the year
APR is the quoted rate, and m is the number of compounding periods per year
APR
period rate=APR/number of periods per year
Loan types
Pure DIscount Loans
如Treasury bills(T-bills),零息债券一定要折价发行
Interest-only Loan
如corporation bond到期还本,分期付息
Amortized Loan with Fixed Principal Payment
Amortized Loan with Fixed Payment
Make sure the interest rate match with time periods.思维导图模板大纲
mortgage debt is an example of an amortized loan思维导图模板大纲