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BUSM 301 BYU: Test 2
Dr. Holme's finance class
12
Finance
Undergraduate 3
11/17/2011

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Cards

Term
par value
Definition
how much you get paid at the end of a bond term (FV)
Term
coupon rate
Definition
interest rate of the bond (I)
Term
maturity
Definition
the length of a bond (N)
Term
DOL
Definition
(Sales - variable costs)/EBIT
Term
DFL
Definition
EBIT/(EBIT-I)
Term
DCL
Definition
(Sales - Variable costs)/(EBIT - I)
Term
Payment on a bond
Definition
coupon rate * par value
Term
YTM
Definition
average annual rate of return on a bond, i.e. discount rate
Term
discount rate
Definition
rate of return on a bond, i.e. YTM
Term
duration
Definition
If interest rates go down 1%, the price of the bond will go up D%.
Term
preferred stock
Definition
price = dividends / required rate of return
Term
Common stock (gordon growth)
Definition
Price in year 0 = Dividends in year one /(Required rate of return - growth)
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