Week 1 - Introduction to Business Finance and Financial Mathematics
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6 Terms
1
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corporations main objective
maximise shareholder wealth
means increasing the value of the company so that shareholders get higher returns on their investment.
2
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Time Value of Money
The idea that the value of money today is worth more than a dollar tomorrow
3
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Simple interest
principal*periods*interest rate
4
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Future value + PV + N + rate of return
Future value: =FV(
Present value =PV(
N (time) =NPER(
Rate of return = RATE(
5
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EAR
=EFFECT(
Apr is 10% not componded
Ear is 10.25% when compounded semi annually
apr is xx% compundede semi annualy = just use effect
xx% semi annually = multipoly by 2 then use effect
6
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Compounding continuously
FV = PV*2.71828^(rate*n)
Note 
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