Management and Organizational Studies 2310A/B Study Guide - Midterm Guide: Retained Earnings

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2310A/B
• Professor: Erin Clements

Document Summary

= a(g) p(s)r (1 + g) Efn = p(s)r + [a p(s)r] g. Efn = p(s)r + [a p(s)r] g g = ps(r)/[a p(s)r] Efn = increase in total assets addition to retained earnings. Efn* = increase in total assets addition to retained earnings new borrowing. = a(g) p(s)r (1 + g) p(s)r (1 + g)[d/e] Efn* = 0 g = roe r/[1 roe r] p(s/a)(1 + d/e) r g = Future value = (1 + r)t. Pv = [1/(1 + r)t] = /(1 + r)t (cid:19) Pv = fvt/(1 + r)t = fvt [1/(1 + r)t] (cid:18) 1 present value factor (cid:26) 1 1/(1 + r)t (cid:27) r. Annuity fv factor = (future value factor 1)/r. Annuity due value = ordinary annuity value (1 + r) Perpetuity present value rate = cash ow. Annuity present value factor = (1 present value factor)/r. = (1/r) (1 present value factor) Ear = [1 + (quoted rate/m)]m 1.