CFS equations ⭐️
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20 Terms
Vu =
(EBIT(1-Tc)) / ru
P1 =
VL / shares
Repurchased =
D / P1
Share remaining =
outstanding - repurchased
EL =
VL - D
PV(tax shield) =
D x Tc
New shares =
(when vars fixed
(amount to raise) / (sub price)
Rights ratio =
(existing shares) / (new shares)
Total equity =
value of shares + cash
TERP = Pex =
(total equity) / (total shares)
Cum-rights price
the market price given in question
Value of 1 right =
(cum-rights price) - (TERP)
Discount rate (r) =
(pre-tax cost of debt) x (1 - Tc)
New shares =
(when given rights structure, so vars no fixed)
(shares) / (rights structure)
Sub price =
(amount to raise) / (new shares)
Hold =
shares x TERP
Sell =
rights x (value 1 right)
Pay sub =
(new shares) x sub
NPV
Sales
(VC)
(FC)
EBIT
(Tax)
Total CFs
Annuity =
(1 - (1+r))^-t / (r)
Note 
Flashcards (290)