Details Title: CFA Exam Description: Book 4 Exam Total Flash Cards: 19 Created: 11/30/2008 15:33:42		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Finance Flashcards
Cards in this set: Term payback period Definition full years until recovery+(unrecovered cash at the beginning of the last year/cash flow during the last year) Term AAR Definition Avg. NI/Avg. Book value Term PI Definition PV of future cash flows/CF0 Term WACC Definition (Wd)*[Costd(1-t)]+(Wps)(Costps)+ (Wce)(Costce) Term Costce Definition (D1/P0)+g Term Costce Definition RFR+beta[E(Rm)-RFR Term Costce Definition bond yield+risk premium Term after-tax cost of debt Definition Costd(1-t) Term cost of preferred stock (Costps) Definition Dps/P Term break point Definition amount of capital at which the component's cost of capital changes/weight of the component in the capital structure Term Costce (with Country risk premium) Definition Rf + Beta[E(Rmkt)-Rf+CRP] Term sovereign yield spread Definition (annualized st. dev. of equity index of developing country/Annualized st. dev. of sovereign bond market in terms of the developed market currency) Term Sovereign yield spead Definition difference between government bond yield in the developing country denominated in the local currency, and a treasury bond of a similar marturity Term Extended DuPont Expression Definition (Operating income/revenues)*(EBT/operating income)*(1-(taxes/income before taxes))*(revenues/avg. total assets)*(avg. total assets/ avg. shareholders' equity) Term Extended Dupont Definition operating profit margin*effect of nonoperating items*tax effect*total asset turnover*financial leverage Term Expected rate of return from a probability model E(R) Definition sum of PiRi Term Expected rate of return from historical data AVG. R Definition Rt/n Term variance of returns Definition sum of Pi*(Ri-E(R))^2 Term variance of returns from historical data Definition [Rt-meanR]^2/n