Formulae Sheet
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Expected return
E ( R) 
n
pR
i 1
  Standard deviation
PV0  (1Cr1 )1  (1Cr2)2  ....  (1Crt )t
i
i
  Variance   2

n
 (k
i 1
T
NPV0  C0   (1Crt )t
t 1
i
 kˆ) 2 Pi
T
IRR  NPV0  0  C0   (1Crt )t
t 1
The cost of preferred, Rp = D/P0
WACC = (D/V) × Rd (1 – T) + (P/V) × Rp + (E/V) × RE
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