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Corporate Finance Professional Certificate MOOC

This document provides an overview of key concepts in corporate finance and valuation, including net present value, rates of return, discounting, and perpetuities. It defines concepts such as future value, present value, and formulas for calculating things like net present value, future value, perpetuities, and growing perpetuities. The document is the first module of an online course on corporate finance and introduces basic financial concepts.

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kolya viktor
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50 views1 page

Corporate Finance Professional Certificate MOOC

This document provides an overview of key concepts in corporate finance and valuation, including net present value, rates of return, discounting, and perpetuities. It defines concepts such as future value, present value, and formulas for calculating things like net present value, future value, perpetuities, and growing perpetuities. The document is the first module of an online course on corporate finance and introduces basic financial concepts.

Uploaded by

kolya viktor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Corporate

Finance Professional Certificate MOOC


Course 1, Introduction to Corporate Finance MOOC
Module 1, Basic Finance Concepts
Valuation Basics Net Present Value
Rate of Return Net Present Value
The gain experienced over a period of time The present value of all the cash flows
expressed in terms of the initial investment. including all the costs.
Future Value (FV) Net Present Value Formula
The value of a given amount of money today at 𝐶,
some point in the future. 𝑁𝑃𝑉 = 𝐶/ + ⋯
(1 + 𝑟)1
Present Value (PV) PV = Present Value
The amount of money today. 𝐶/ = Initial Investment
Ct = Cash Flow at Time t
Future Value (FV) Formula r = rate
𝐹𝑉 = 𝑃𝑉 × (1 + 𝑟) T = time
FV = Future Value Perpetuity
PV = Present Value A cash flow stream in which all the cash flows
r = rate
are the same and go on forever.
Compounding Perpetuity Formula
Earning a return on past returns 𝐶
General Future Value Formula 𝑃𝑉 =
𝑟
𝐹𝑉 = 𝑃𝑉 × (1 + 𝑟), PV = Present Value
FV = Future Value C = Cash Flow
PV = Present Value r = rate
r = rate
Annuity
t = time
A cash flow stream in which all cash flows are
Discounting the same and last for a fixed number of
The process of computing the present value of a periods
future cash flow.
Annuity Formula
Present Value (PV) Formula 𝐶 1
𝐹𝑉 𝑃𝑉 = 21 − 4
𝑃𝑉 = 𝑟 (1 + 𝑟)1
(1 + 𝑟), PV = Present Value
FV = Future Value C = Cash Flow
PV = Present Value r = rate
r = rate T = time
t = time
Growing Perpetuity
Valuation Cash flows growing at a constant rate and last
Appraising or estimating the worth of something forever.
having economic or monetary value.
Growing Perpetuity Formula
𝐶
𝑃𝑉 =
𝑟−𝑔
PV = Present Value

C = Cash Flow
r = rate
g = growth rate of cash flows

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