PDF -Effective Communications: Raising the profile of your archive - CA Final Sfm Formula Booklet by CA Aaditya Jain
Wait Loading...


PDF :1 PDF :2 PDF :3 PDF :4 PDF :5 PDF :6 PDF :7 PDF :8 PDF :9


Like and share and download

CA Final Sfm Formula Booklet by CA Aaditya Jain

Effective Communications: Raising the profile of your archive

casansaar files CA Final SFM Formula concepts & formulae booklet for ca final index s no topic page no 1 mergers & acquistion 3 2 dividend policy 8 3 bond valuation 14 4 mutual funds 21 5 portfolio management 22

Related PDF

STRATEGIC FINANCIAL MANAGEMENT CONCEPTS & FORMULAE BOOKLET

casansaar files CA Final SFM Formula concepts & formulae booklet for ca final index s no topic page no 1 mergers & acquistion 3 2 dividend policy 8 3 bond valuation 14 4 mutual funds 21 5 portfolio management 22 6 derivatives futures 33 7 derivatives options 36 8 valuation of business 46 9 leasing 49 10 capital budgeting 52 11 foreign exchange 59 12
PDF

Note: Aaditya Jain - memberfilesfreewebscom

memberfiles freewebs 41 54 99475441 11 CA Aaditya Jain SFM For those who want to score 90+Delhi 9911442626 ; Kolkata 9339238834 Dare To Dream Beyond 90 Aaditya Jain The Best FM Faculty Of India Po = Current Market Price Per Share Ex Dividends, g = Growth rate of dividend = b r
PDF

Strategic Financial Management - WordPresscom


PDF

TRATEGIC FINANCIAL MANAGEMENT Strictly As Per New Syllabus

s3 amazonaws caclubindia cdn forum files 107475
PDF

futurecasweeblycom

futurecas weebly uploads 8 2 9 7 8297943 ca final 8 CA Aaditya Jain Delhi 9911442626 ; Kolkata 9339238834SFM For those who want to score 90+ Dare To Dream Beyond 90 Aaditya Jain The Best FM Faculty Of India EXPRESSION OF DI
PDF

Strategic Financial Management - apps2mdpacid

apps2 mdp ac id perpustakaan ebook Karya Umum Download free books at BookBoon Strategic Financial Management 8 PART ONE AN INTRODUCTION 1 Finance An Overview Introduction In a world of geo political, social and economic uncertainty, strategic financial management is in
PDF

Engineering Formula Sheet - madison-lakek12ohus

madison lake k12 oh us userfiles 680 Classes 16192 Engineering Formula Sheet Probability Conditional Probability Binomial Probability (order doesn’t matter) P k (= binomial probability of k successes in n trials p = probability of a success –p = probability of failure k = number of successes n = number of trials Independent Events P (A and B and C) = P A P B P C
PDF

STAINLESS STEELS FOR MACHINING - nickelinstituteorg

nickelinstitute media 1814 stainless Availability–The final step in the selection specification process is to determine the availability of the candidate material(s) Depending on the quantity involved, an inquiry can be prepared and submitted to a steel service center or directly to a mill that produces stainless steel
PDF

Effective Communications: Raising the profile of your archive


PDF

CA June 2016 Eng Xaam.in

Download Professional Engineer Exam Questions PDF - Book library

PDF Cs Foundation Syllabus June 2019 Dec 2019 New Changesgumuslukhouses zebra tr cs foundation syllabus june 2019 dec 2019 new changes pdf PDF 2014 March Physical Science Exam Papernewsletter insegnareonline 2014 march physical science exam paper pdf PDF Vision Ias Prelims 2019

CA LIDAH

Buffet Paket Arundaya - Alfabet Catering

soulkeeper28 files wordpress 2009 01 artikel Lidah Buaya (Oleh Agung Wijaya Setiabudi) Tanaman lidah buaya (Aloe vera) lebih dikenal sebagai tanaman hias dan banyak digunakan sebagai bahan dasar obat obatan dan kosmetika, baik secara langsung dalam keadaan segar atau diolah oleh perusahaan dan dipadukan dengan bahan bahan yang lain

CA Serviks Dan Kehamilan

PREEKLAMPSIA - EKLAMPSIA - staffuiacid

digilib unimus ac id files disk1 135 jtptunimus gdl Kanker serviks merupakan gangguan pertumbuhan seluler dan merupakan kelompok penyakit yang dimanifestasikan dengan gagalnya untuk mengontrol proliferasi dan maturasi sel pada jaringan serviks Kanker serviks biasanya menyerang wanita berusia 35 55 tahun, 90 dari kanker serviks berasal

CA-Tiger Beer-competitive Watch Summary

Sample Grant Proposal - Kurzweil Edu

CA Unified Infrastructure Management CA Uim Trial Run Book

CAT-540, CA Unified Infrastructure Management 8x Proven

ca content dam ca us files ebook ca uim 2 | CA UNIFIED INFRASTRUCTURE MANAGEMENT MOST COMPREHENSIVE HYBRID CLOUD AND IT MONITORING CA Unified Infrastructure Management (CA UIM) is the only solution that provides unified analytics to proactively resolve issues ca content dam ca

CA2594905A1

Thane Heins Coils Document

PDF Free Energy Research WordPress ferd041 files wordpress 2016 07 fe research3 pdf PDF ferd041 F transformer WordPress ferd041 files wordpress 2016 07 ferd041 pdf PDF Leistungsverstärker der Firma STEHO borderlands

Ca705 en Col15 Ilt Fv Inst a4

Adm900 Sap System Security The Fundamentals - Ian Kilgore | iank

PDF Scm550 En Col15 Labeliumytanalytics labelium scm550 en col15 pdf PDF Adm900 Sap System Security The Fundamentals hort iastate edu adm900 sap system security the fundamentals pdf PDF Scm550 En Col15 ASSEaudubon assewp scm550 en col15

CAA SERVICE REGULATIONS (1).pdf

aip aeronautical information publication - ICAO

Jan 15, 2000 CAA EMPLOYEES CONDUCT REGULATIONS Page 1 CIVIL AVIATION AUTHORITY SERVICE REGULATIONS CHAPTER 1 Format (PDF) to allow easy viewing and navigation between terms and sections The Congressional Accountability Act (CAA), enacted in 1995,

  1. The Federal Government CAA Service Regulations
  2. CAA Handbook
  3. Guide to Separation of Service Provision and Regulation
  4. CAA International Structures
  5. Manual of Air Traffic Services
  6. MDS 3.0 RAI Manual v1.16_October 2018
  7. The regulation of civil aviation 1972-2002
  8. CAA Consolidation
  9. Mandatory Occurrence Reporting Manual
  10. Audit Policy and Procedure Manual

Independent Self Study Courses Use your curriculum guide for course registrations for the 2018 2019 academic year students' levels of learning in their courses Assistant Principal for Academic Programs on a case by case basis Jul

  1. 2018-2019 Curriculum Guide
  2. honors course
  3. Program of Studies 2018-2019
  4. Microsoft Certified Educator Study Guide
  5. Upper School Curriculum Guide
  6. Curriculum Case Study
  7. Curriculum Guide
  8. Monitoring and Evaluation Training Curriculum
  9. Okemos High School Guide to Curriculum 2017-18
  10. A Guide to Curriculum Development
Home back Next

l Sfm Formula Booklet by CA Aaditya Jain

Description

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

The Best CA Final

STRATEGIC FINANCIAL MANAGEMENT

Aaditya Jain

Strictly As Per New Syllabus

Short FORMULA Notes In the World of Darkness,

Let There Be Light

! The Best FM Faculty Of India

you must shine your own light,

and don't worry about the darkness,

for that is when the stars shine brightest”

CA Aaditya Jain By

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

PHOTO GALLERY ALL INDIA CA TOPPER-NOV 10

Dimpy Jindal

ALL INDIA CA TOPPER-NOV 08

Aaditya Jain Aaditya Sir Aaditya Sir

SURBHI AGARWAL

The Best FM Faculty Of India

WE ARE THE BEST Galib Auditorium,New Delhi,MAFA/SFM Batch

AADITYA JAIN SIR CA FINAL SFM CLASSES IS NOW AVAILABLE IN ALMOST ALL THE CITIES OF INDIA

FOR COMMERCE STUDENTS CA IS THE BEST PROFESSIONALS COURSE FOR THEIR CAREER

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

YET ANOTHER MILESTONE ACHIEVED

BY AADITYA JAIN SIR'S STUDENTS DIMPY JINDAL SECURED ALL INDIA

RANK 1 Aaditya Jain

IN CA FINAL

WITH 88 MARKS IN SFM & SHIVANGI PATNI RANK 6 WITH 89 MARKS IN SFM The Best FM Faculty Of India

SECURED ALL INDIA

MAFA /SFM is no more a Nightmare for Students

Dimpy Jindal

Aaditya Sir

Finally Delhi Had Got A Good MAFA Teacher

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

MARKSHEET OF ALL INDIA TOPPERS MARKSHEET OF DIMPY JINDAL-ALL INDIA

THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA EXAMINATION RESULTS,NOV 2010 ROLL NUMBER 64609 NAME DIMPY JINDAL MERIT

Aaditya Jain

MARKSHEET OF SHIVANGI PATNI-ALL INDIA THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA EXAMINATION RESULTS,NOV 2010 ROLL NUMBER 61847 NAME SHIVANGI PATNI MERIT

DONT THROW IT

RESPECT THIS MARKSHEET AND USE IT AS UR DREAM TARGET

Aaditya Sir

WE DEDICATE OUR SUCCESS TO AADITYA JAIN SIR-FOR OUR MAXIMUM MARKS IN SFM SUBJECTS

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

The Best CA Final

FORMULA BOOKLET Strictly As Per New Syllabus Aaditya Jain

For Those Who Want To Target 90+ The Best FM Faculty Of India

In the World of Darkness,

Let There Be Light

you must shine your own light,

and don't worry about the darkness,

for that is when the stars shine brightest”

By CA Aaditya Jain Classes Organised By Bright Professionals Pvt Ltd ,1st Floor,Lalita Park,Laxmi Nagar,Delhi-110092 Phone:47665555,9911442626,9811136987,9811042458

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

The Best CA Final

FORMULA BOOKLET

Strictly As Per New Syllabus

FOR THE FAaditya IRST TIME Jain IN INDIA FOR CA FINAL STUDENTS The Best FM Faculty Of India

CA Aaditya Jain

Undisputed Name For MAFA/SFM

Visiting Faculty Of ICAI “It’s Time To Be Busy BECAUSE Today Will Be Yesterday Very Soon ” When nothing seems to help,I go & look at a stonecutter hammering away at his rock ,

at the hundred-and-one blow it will spilt into two ,

and I know it was not that blow that did it but all that had gone before

Remember ,Failure is not final –until you make it final

“I’ve missed more than 9000 shots in my career

I’ve lost almost 300 games

Twenty-six times I’ve been trusted to take the game winning shot and missed

I’ve failed over and over and over again in my life

And that is why I succeed

Welcome to the amazing world of finance

We make our own fortunes and call them fate

"You are the lock and you are the key

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

From the desk of CA Aaditya Jain The Importance Of Patience In CA Career Sometimes in life there are situations which makes you to loose your patience

The best way to react at these situation is not to react at all

These situations are meant just to distract you from your goal

Believe it or not a one minute involvement in such situation will take away your 2-5 hours of precious time or sometimes even more

When ever you encounter such situation just keep your head cool and try to get out of the atmosphere if posssible and afterwards just relax your mind by cracking a joke or by taking 14-15 long breathes in a single stroke

Believe me it’’ll work

So be ready to face such situations Murphy's Law " If anything can go wrong,it will "

Everything for the first time looks tough

REMEMBER

was also tough for you one day Practice makes a man perfect

Follow the proper approach you will definitely succeed Ending in this high note said by late Dhiru Bhai Ambani " For Those Who Dare n Dream There is A Whole world to win " Jinke honslo mein udaan hoti hai wo aasmaan ki uchayion se nahi darte " I Welcome You as a Bright in This Amazing World of Finance " TheFuture Best FMCA Faculty Of India

Aaditya Jain

“In Every Man There is Something of Which I May Also Learn,

and in All That He is My Teacher” I Wish All My Students to Always Aim High in Life

You have to grow From Inside Out

None Can Teach You,None Can Make You Spiritual

There is no Other Teacher But Your Own Soul

"Life is not measured by the number of breaths we take,

but by the moments that take our breath away

" Wishing You All The Best Remember You Can Do Wonders ,

Nobody Can Stop You From Achieving Success Except You Get Up and Keep Going ,

World Is Waiting For You

Now You Can Also Dream Of Scoring Good Marks In MAFA/SFM

"Targetting 90+ In Mafa/SFM" "All your life you are told the things you cannot do

All your life they will say you're not good enough or strong enough or talented enough

they will say you're the wrong height or the wrong weight or the wrong type to play this or be this or achieve this

THEY WILL TELL YOU NO,

until all the no's become meaningless

All your life they will tell you no,

AND YOU WILL TELL THEM YES

The only thing that will stop you from fulfilling your dreams is you Winning isn't everything,

but the only thing is doing your best

" Never look down on anybody unless you're helping him up

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

CA RESULT ANALYSIS:-May 2010 Pass % of CPT

37 (276*13

2 (37*6

So, Final Analysis is that if 1000 student get registered in ICAI then only 2 student will finally become Chartered accountant( i

CA FINAL EXAM RESULT-Last 15 Attempt Exam S No

MM/YYYY Nov-09 1 Jun-09 2 Nov-08 3 May-08 4 Nov-07 5 May-07 6 Nov-06 7 May-06 8 Nov-05 9 May-05 10 Nov-04 11 May-04 12 Nov-03 13 May-03 14 May-10[Old] May-10[New]

Appeared 25224 25848 21176 17552 16137 15083 14587 15355 15902 18211 16645 20724 19501 20290 20049

Group I Passed 5011 8379 5892 6444 6353 2289 5505 5832 5039 5748 4089 7011 4450 4469 2897

Group II Pass % Appeared Passed Pass % 19

Both Group Appeared Passed Pass % 18502 1454 7

Aaditya Jain

FOR ANY CLASS RELATED ENQUIRY PLEASE CONTACT US AT

DELHI-9911442626

KOLKATA-9339238834 Now All India Satellite Classes Also Available For IPCC-FM & CA Final SFM(MAFA) By CA Aaditya Jain Across India

For More Detail For Satellite Classes Contact :

com NOW YOU CAN ALSO JOIN SIR'S COMMUNITY ON FACEBOOKNAME OF COMMUNITY : CA ADITYA JAIN SFM 90+ TARGET

For Getting Last Time Important Suggestions Please mail or SMS your following details at : By E-Mail:[email protected] [Name,Mobile No

,E-mail Address,Exam Due,City]

By SMS:Delhi :9911442626

Kolkata:9339238834 Happiness always looks small if you hold in your hands

But learn to share it,you will realize how big and precious it is

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

SPECIAL ATTRACTIONS OF UPCOMING BATCH 15 MINUTES OF OUR CLASS WILL BE SPECIALLY DEDICATED TO STOCK MARKET PRACTICAL (ON SPECIAL DEMAND OF STUDENTS) 600 CONCEPTS TOPICS WILL BE COVERED 600 PRACTICAL QUESTION WILL BE COVERED 100% THEORY AS PER NEW SYLLABUS WILL BE COVERED SPECIAL BOOKLET COVERING ENTIRE SFM-FORMULA & THEORY BEST FOR LAST TIME REVISION WILL BE ISSUED

SFM Classes Conducted By Aaditya Sir Is A Rare Combination Of Concept+Practical Problem+Theory

Aaditya Jain

Its Time To Think Beyond 90+ In MAFA/SFM Limited Seats

First Come First Serve Basis Stop Memorizing Without Understanding The Concept

Its Time To Learn Finance Conceptually Congratulating Surbhi Agarwal For Securing All India Rank 1 In CA Final

I am excited and feeling great today…I must say that hard work and dedication is the path to success

I take this opportunity to thank my family,

friends and of course my Teachers whose guidance and support has always been with me

“I suggest the students to study the subjects not with the intention to mug up things but to gain knowledge

Given that we have eight subjects you cannot cram all of them so the best way out is to understand,

comprehend and revise it again and again so that it settles deep into your sub-conscious mind

”I will further like to thank Aditya Sir to make my MAFA conceptually clear

Finally Delhi has got a good MAFA teacher

His notes are really excellent and updated

For Fees & Other Detail Please Contact Delhi:9911442626

Kolkata:9339238834

MAFA /SFM is no more a Nightmare for Students To the question of your life you are the answer,

and to the problems of your life you are the solution

If one dream should fall and break into a thousand pieces,

never be afraid to pick one of those pieces up and begin again

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain Positive Feedback About The Theory Books And Classes 10

[mafabycaaadityajain] hello friends Friday,

10 April,

I am appearing my CA finals in this June

I have previously taken tutions for MAFA from a teacher

Though he was good but i was always scared of MAFA

By taking classes by Aditya Jain Sir,

now i am feeling very good & comfortable in MAFA even though i am not his regular student

He makes us understand the concepts in a very easy manner

I just want to thank sir for removing my fear for MAFA

Before taking classes from sir i just used to target 45-50 in MAFA

But now i am targeting much more

Thank you sir

Thank you so much

Regards

Sweta Kothari Kolkata THANKS FOR YOUR THEORY BOOK Wednesday,

I have purchased ur theory book from Jayesh Sir and is extremely benefitted by it

Now I regret that why havenot I joined u

Actually when I did my MAFA classes I even didnot know your name

Your theory book is just marvellous

No doubt I am getting immense knowledge from it but one more thing is there which I got from your book

The Confidence,most important thing The Best Faculty OftoIndia for gaining courage and facing the exams

I would definitely ask FM all my friends join your classes

I have heard that your classes are really awesome

I would like to request you that please give some of your valuable suggestions to me for passing the exams in all the subjects

A very heartful thanks to you for publishing such a nice book

Aaditya Jain

Monday,

8 June,

I came across your book and I must complement you on writing an excellent book

I have never seen such a simple and excellent presentation of any subject by any one

I am badly stuck up in Group-I of C

I wish I could get your complete notes

I am sure it will prove to be extremely helpful

   Regards,Rajeev Nagpal,Assistant Financial Controller,Head Office Finance Control Department,Invest Bank,Sharjah,U

  Tel : 06- 5694440 Ext

Mob : 050-4996818

Fax :06-5681174 Wednesday,

June 3,

Aditya Jain,

I owe it to you,

I can heave a sigh of relief after my MAFA Exam

I happened to read only your Suggested Compilation for June 2009 exam during my revision time

Im not regretting it one bit

I dont know how you did it,

but so many questions came from your compilation (Which was obviously advantageous to me)

Thanks a lot for putting in such a diligent effort to compile the same

Regards,

Ashish P

Abhishek Jakhetiya CA Final-Roll No

N 1391,

Sector-4,

Gurgaon-122001 Exam Completion in CA : May 2008 Comments on your Classes: Finally Delhi has got some good MAFA classes as well

Aaditya Jain Sir has not only made us fearless but also made us think of MAFA as a high scoring paper just as Accounts or Indirect Taxes

Your Study material is fantastic

Thankyou

Never blame a day in your life

Good days give you " Happiness "

Bad days give you Experience

Both are essential in life

Start everyday with a smile

Success is a journey,

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

STUDENTS WHO WANTS SOFT COPY NOTES OF THEORY BOOK COVERING 30 MARKS & IMPORTANT LAST TIME SUGGESTION Aaditya Jain PLEASE MAIL YOUR FOLLOWING DETAILS The Best FM Faculty Of India

Please mail or SMS your following details at : By E-Mail:[email protected] [Name,Mobile No

,E-mail Address,Exam Due,City]

By SMS:Delhi :9911442626

Kolkata:9339238834

All India Satellite Classes Also Available Now

For IPCC-FM & CA Final SFM(MAFA) By CA Aaditya Jain Across India

For More Detail For Satellite Classes Contact :

com If you want to accomplish anything in life,you can’t just sit back & hope it will happen

You’ve got to make it happen”It is not because things are difficult that we do not dare,it is because we do not dare that things are difficult

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

DIVIDEND EXPRESSION OF DIVIDEND : Dividend may be expressed in the following manner : = Dividend Per Share  100

Face Value

Dividend Per Share

(ii) Dividend Yield ( Return ) = Market Price Per Share  100 Dividend Per Share

= Earning Per Share  100 Note:Dividend must be paid to perference share holders before any declaration of dividend to equity shareholders

Note:Dividend is always paid on face value of share and not market price

Aaditya Jain WALTER'S MODEL

The Best FM Faculty Of India

DPS Symbolically : Po = K + e

Po= Current Market Price Per Share Ex-Dividends

DPS = Dividend Per Share

Ke= Cost of Equity

r = Rate of Return /Internal Rate of Return (IRR) /Return on Equity(ROE)/Return on Investment EPS-DPS = Retained Earning Per Share OPTIMUM DIVIDEND AS PER WALTER'S MODEL (ALL OR NOTHING APPROACH) : Walter suggested that optimum dividend payout or optimum retention ratio depends on the relationship of Ke & r Nature of Firm Relationship Optimum Dividend Payout Optimum Retention Ratio Growth Company Ker 100% 0% Normal Company Ke =r Indifferent Indifferent GORDON GROWTH'S MODEL/DIVIDEND DISCOUNT MODEL DPS1

Symbolically :Po= K – g or Po = e

DPS0 ( 1  g) EPS1 (1  b) P0  or Ke  g Ke  g

DPS next year / Dividend to be paid / Expected Dividend

DPS of current year / Dividend just paid / DPS as on today/Last Year Divedend/Dividend Recently Paid

Earning Per Share of next year or at the end of the year

MPS at the end of the year

Ke = Cost of Equity for shareholders

Start living now

Stop saving the good thing for that special occasion

Stop withholding your love until that special event materializes

Every day you are alive is a special occasion

Every minute,

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

Po b r (1-b)

CA Aaditya Jain

Current Market Price Per Share Ex-Dividends,

g = Growth rate of dividend = b  r Retention Ratio (%) Rate of Return /Internal Rate of Return (IRR) /Return on Equity(ROE)/Return on Investment Dividend Payout Ratio

OPTIMUM DIVIDEND AS PER GROWTH MODEL (ALL OR NOTHING APPROACH)

Nature of Firm Growth Company Declining Company Normal Company

Relationship Ker Ke =r

Optimum Dividend Payout 0% 100% Indifferent

Optimum Retention Ratio 100% 0% Indifferent

GRAHAM & DODD MODEL E  Po= m   D'  3  Where,Po= Current Market Price Per Share Ex-Dividend,m=multiplier ,D =Dividend Per Share,E=Earning Per Share

Aaditya Jain

The Best FM Faculty Of India LINTER'S MODEL (CORPORATE DIVIDEND BEHAVIOUR MODEL)

Symbolically :- D1  D'0  [(EPS1  Target Dividend Payout Ratio)  D'0 ]  AF Where D1 = Dividend to be declared in current year

D'0 = Dividend in previous year or Dividend paid

AF= Adjustment Factor / Speed of Adjustment / % increase in Dividend which can be maintained in future IRRELEVANCE THEORY : MODIGLIANI-MILLER (MM) MODEL Symbolically : Current Value of the firm taking investment budget and earning into consideration is given by : n Po =

(n  m) P1  E1 – I1 Where,

1  Ke

= Current or Prevailing Market Price Ex-Dividend

P1 = Year end Market Price Ex- Dividend

I1 = Total Investment made at year end

E1 = Total Earning at the end of the year

Ke = Cost of Equity

n = Present / Existing Number of Equity Shares

m = Additional or New Number of Equity Shares issued at year end at year end market price nP0 = Market Value of all existing shares in beginning of year/ Market Value of the firm as on today Other useful relation in respect of MM Approach are : (a) Current Market Price of the share in the absence of Investment & Earning is given by : D1  P1 1  Ke 1

This formula is normally used in calculating P1 i

e MPS at the end of the year 1 (b) Number of new equity shares to be issued by the company for Investment purpose is given by :

Investment 1 – [Earning 1 – n  DPS1 ] Market price at the end (P1 )

I met money and said why everyone runs behind you,

Money smiled and said ofcourse I am just a piece of paper,

but I haven’t seen a dustbin yet in my whole life

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

(c) Market Value of the firm at the end is given by : Market Price Per Share at the end  Total Number Of Equity Share at the end = P1  (n + m) PRESENT VALUE OF GROWTH OPPORTUNITY (PVGO) Present Value of Growth Opportunity

= Price of the Share with Growth – Price of the Share without Growth

 Present Value of Growth Opportunity

D o (1  g) Ke – g

OVERVALUED & UNDERVALUED SHARES:When Current Market Price and Theoretical Market Price i

e price which we calculate by applying present value concept are not same we will undertake following decision : Case Valuation Decision If Currenty Market Price > Present Value Market Price Overvalued Sell If Currenty Market Price < Present Value Market The Price Undervalued Buy Best FM Faculty Of India If Currenty Market Price = Present Value Market Price Correctly Valued Hold

Aaditya Jain

APPLICATION OF PRICE/EARNING (P/E) RATIO Price Earning Ratio =

Ke  EPS P/E Ratio

VALUE OF DECLINING FIRM OR WHEN GROWTH RATE IS NEGATIVE Market Price Per Share of a firm whose dividend is declining at a constant rate p

D 0 (1  g) Ke  g

CALCULATION OF HOLDING PERIOD RETURN (HPR) Holding Period Return or Total Yield 

D1  P1  P0  D1 P1  P0    Dividend Yield  Capital Gain Yield P0 P0 P0

PRICE AT THE END OF VARIOUS PERIOD

D1  P1 1  K e 1

D 2  P2 1  K e 1

D 3  P3 1  K e 1

D 4  P4 1  K e 1

accordingly price at the end year each year can be computed

UNEQUAL GROWTH RATE Dividend Growth Model cannot be applied directly in case dividend is not growing at a constant rate from year 1 onwards Death is more universal than life

everyone dies but not everyone lives

You have to put in many,

many tiny efforts that nobody sees or appreciates before you achieve anything worthwhile

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

In such case we will modify Dividend Growth Model and calculate Current Market Price in the following manner : P0 [ Assuming Dividend is growing constantly from year 4 onwards ] 

D1 D2 D3 D4 D'(1  g) 1     4  2 3 4 1  Ke (1  Ke) (1  Ke) (1  Ke) Ke – g (1  Ke) 4

DETERMINATION OF GROWTH RATE Assuming growth rate to be constant ,

we can find the growth rate by using any of the following two relation : (a) g = b  r (b) D'n  D'0 (1  g) n

D'n = Latest Year Dividend

Putting the values of Dn ,

Do and n in the above equation we may find growth rate

BOOK VALUE PER SHARE (BVPS)

Book Value Per Share ( BVPS ) =

Aaditya Jain

Total Equity Shareholder' s'Fund Total Number Of Equity Share The Best FM Faculty Of India

RETURN ON EQUITY (ROE )

Total Earnings of the Firm For Equity Shareholde r  100 Total Equity Shareholde r' s'Fund Note : EPS = Book Value Per Share  Return on Equity or EPS = BVPS x ROE Return On Equity (ROE ) ( r) =

EARNING YIELD

 Earnings Per Share  Earning Yield =  Market Price Per Share  100   EARNING PER SHARE (EPS)

Earning Per Share (EPS) =

Total Earning Available To Equity Shareholde r Total Number of Equity Share

DIVIDEND PER SHARE (DPS)

Dividend Per Share (DPS)

Total Dividend Paid To Equity Shareholde r Total Number of Equity Share

MARKET PRICE PER SHARE (MPS) To lose patience is to lose the battle

Every sunset gives us one day less to live

!But every sunrise give us,

Good Day & Good Luck

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

Market Price Per Share (MPS) =

CA Aaditya Jain

Total Market Value / Market Capitaliza tion / Market Cap Total Number of Equity Share

RETENTION RATIO Retention Ratio

DETERMINATION OF PE RATIO WHICH WILL NOT EFFECT MARKET VALUE

? Example : What should be P/E ratio at which dividend pay-out ratio will have no effect on the value of the share if r = 8 %

then the Dividend Payout Ratio (D/P Ratio) does not affect the price or value of the share

Here we have r = 8 %

Hence Ke should also be 8 %

Now we know that,

Ke = P/E Ratio

Aaditya Jain

5 times

The Best FM Faculty Of India

DATES WITH DIVIDEND : Dates relating to dividend in sequence of events are as follows : 1

Declaration Date : 2

Last cum-Dividend Date : 3

Ex- Dividend Date : 4

Record Date : 5

Payment Date : CONCEPT OF MAXIMUM DIVIDEND Maximum Dividend is the amount of Retained Earning or Cash Available which ever is lower

CONSTANT DIVIDEND AMOUNT APPROACH : Under this model,

a fixed amount of dividend is paid each year irrespective of the earnings

There would be no reduction in dividend even during the period of losses

Example : Assume Contant Dividend Amount = Rs

CONSTANT DIVIDEND PAYOUT APPROACH :“Tell me,

what is it you plan to do with your one wild and precious life

but it is worse never to have tried to succeed

Everything is always okay in the end

If it is not okay,

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

Dividend Payout Ratio is kept constant

There could be zero dividends during the period of losses

Example : Assume Contant Dividend Payout = 50 % Year 1 2 3 4 5 EPS 10 25 45 2

Example 1: Earnings Available : Rs

1,00,000

Invesment Required : Rs

Determine the amount of Dividend to be paid and external financing required under Residual Approach

Amount Of External Financing Required =Nil Example 2: Earnings Available : Rs

1,00,000

Invesment Required : Rs

1,30,000

Determine the amount of Dividend to be paid and external financing required under Residual Approach

Amount Of External Financing Required =Rs

Aaditya Jain The Best FM Faculty Of India

APPLICATION OF FLOTATION COST Flotation cost are the cost which are associated with issue of new share

For Example commission ,brokerage ,underwriting expenses etc

In case flotation cost is given in question we should take Current Market Price net of flotation cost in the following manner: If flotation Cost is expressed in Percentage : If flotation Cost is expressed in Absolute Amount : DPS1

Po [ 1- f ] = K – g Po

INCREASE OR DECREASE IN MPS DUE TO INVESTMENT Example : If Present MPS of the Company as per its existing policy is Rs

Now Company is undertaking an investment which is giving a positive NPV of Rs

2,00,000

Therefore increase in MPS due to investment will be Rs

And Revised MPS after the investment will be Rs

It is an appropriation of profit

Hence It should not be taken after tax

Now as per current regulation Dividend is not taxable in the hands of Shareholders

Company is required to pay Dividend Distribution Tax (or CDT) on behalf of Equity Shareholder

Hence if CDT is given in question we should take DPS(1+CDT)

The greater danger for most of us is not that our aim is too high and we miss it,

but that it is too low and we reach it

“You can be young without money but you cannot be old without it”

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

BOND VALUATION VALUE OF STRAIGHT COUPON BOND OR EQUAL INTEREST BOND Meaning : Straight Coupon Bonds or Equal Interest Bonds are those bonds which pay equal amount of interest upto maturity and also repay principal amount at the end of maturity period

Interest Interest Interest Face Value or Maturity Value  

  1 2 n (1  Yield) (1  Yield) (1  Yield) (1  Yield) n = Interest x PVAF ( Yield %,

n years) + Maturity Value x PVF ( Yield %,

n years) Where n = Number of Years to Maturity Value of Bond (B0 ) 

VALUE OF ZERO COUPON BOND OR DEEP DISCOUNT BOND Meaning :Zero Coupon Bonds are those bonds on which investors are not paid any interest but are entitled only to repayment of principal sum on the maturity period

Symbolically : Value of Bond (B 0 ) =

Aaditya Jain

Face Value or Maturity Value n (1  Yield) The Best FM Faculty Of India

VALUE OF PERPETUAL BOND OR IRREDEEMABLE BOND Meaning : These are bonds where interest payment is paid forever i

Symbolically : Value Of Bond (B0 ) 

Interest Yield

VALUE OF SEMI ANNUAL INTEREST BOND Meaning : Semi Annual Interest Bonds are those bonds which pay interest semiannually

Most of the bonds pay interest semi annually

To value such bonds we have to make three changes : Yield or Discount Rate 2 If coupon interest are paid quarterly or monthly then in such case we should use '4' & '12' in place of '2' in the above changes

Annual Interest Amount 2

Years To Maturity  2

SELF AMORTIZING BONDS Bonds which pay a principal amount over a period of time rather than on maturity are called Self Amortizing Bonds INFLATION BONDS Inflation Bonds are the bonds where interest rate is adjusted for inflation

Thus the investor gets an interest which is free from the effects of inflation

For example : If the interest rate is 10 % and the inflation is 2 % the investor will earn 12

20 % [ i

e ( 1+Interest Rate )  (1 + Inflation Rate )

e price which we calculate by applying present value concept are not same we will undertake following decision : Let others lead small lives,

Let others argue over small things,

Let others cry over small hurts,

Let others leave their future in someone else's hands,

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

Case If Currenty Market Price > Present Value Market Price If Currenty Market Price < Present Value Market Price If Currenty Market Price = Present Value Market Price

Valuation Overvalued Undervalued Correctly Valued

Decision Sell Buy Hold

BOND WITH CHANGING YIELD RATES OR FORWARD RATE-EQUAL COUPON BOND If Yield Rates are Y1

YTM n for year 1 ,

n then Value of Bond will be equal to : Interest Interest Interest Interest     (1  Y1 ) (1  Y1 )(1  Y2 ) (1  Y1 )(1  Y2 )(1  Y3 ) (1  Y1 )(1  Y2 )(1  Y3 )(1  Y4 )

Interest Maturity Value  (1  Y1 )(1  Y2 )(1  Y3 )(1  Y4 )

BOND WITH CHANGING YIELD RATES OR FORWARD RATE-ZERO COUPON BOND

Aaditya Jain

Bond Value Of One Year Zero Coupon Bond ( Bo) =

Maturity Value (1  YTM 1 )

Value The Best FMMaturity Faculty Of India

Bond Value Of Two Year Zero Coupon Bond ( Bo) = (1  YTM )(1  YTM ) 1 2 Likewise Value of Bond can be calculated according to maturity life

CURRENT YIELD / FLAT YIELD /CURRENT INTEREST YIELD/ BASIC YIELD : Interest Current Annual Interest Amount or B O Current Value of Bond Note : Current Yield is always calculated on per annum basis

Note : If Current Market Price and Intrinsic/Fair Value are different we will take Current Market Price and not Intrinsic Value for all the calculation of yield

YEILD ( K d') OR YIELD TO MATURITY (YTM) OR COST OF DEBT /REDEMPTION YIELD / INTERNAL RATE OF RETURN/MARKET RATE OF INTEREST/ MARKET RATE OF RETURN / PROMISED YTM / OPPORTUNITY COST OF DEBT Yield to Maturity is the overall return on the bond if it is held till maturity

Symbolically : It can be calculated by using two method : Trail n Error Method/IRR Technique

Interest Interest Interest Face Value or Maturity Value  

  1 2 n (1  Yield) (1  Yield) (1  Yield) (1  Yield) n Now for finding Yield we should use IRR Technique : Value of Bond (B0 ) 

Lower Rate NPV

Kd = Lower Rate + Lower Rate NPV – Higher Rate NPV  Difference in Rates U can complain b'coz roses have thorns,or u can rejoice because thorns have roses

In the middle of difficulty lies opportunity

For true success ask yourself these 4 questions:Why

?Why not

?Why not me

?Why not now

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

 Maturity Value – Issue Value  Interest    n   Approximation Method : Kd  Maturity Value  Issue Value 2

Note : If Current Market Price and Intrinsic/Fair Value are different we will take Current Market Price and not Intrinsic Value for all the calculation of yield

YIELD TO CALL ( YTC ) :  Call Value – Issue Value  Interest    Call Years   YTC  Call Value  Issue Value 2

Aaditya Jain YIELD TO PUT ( YTP ) :

 Put Value – Issue Value  Interest    Put Years   YTP  Put Value  Issue Value 2

The Best FM Faculty Of India

YIELD TO WORST (YTW) : The yield to worst is the lowest yield of yield to maturity,

Example : Given the following data calculate Yield To Worst:YTM = 10%,YTC = 7%,YTP=9% Solution:YTW = 7 % HOLDING PERIOD RETURN(HPR) : Holding Period Return (R) or Total Return =

Interest  (B1  B0 ) Interest (B1  B0 )  or or Current Interest Yield + Capital Gain Yield B0 B0 B0

Where Bo is the Price of bond as on today ,

and B1 is the price of the bond at the end of the holding period or Sale Price of Bond at the end of holding period

Note : The holding period is generally assumed to be of one year period unless otherwise stated

Kd OF PERPETUAL BOND Yield or Kd 

Annual Interest Bo

Duration Of Normal Bond or Fredric Macaulay 's Duration 1 

Interest

Interest

Interest

Symbolically : Duration Of Bond = B 1  (1  Kd)1  2  (1  Kd) 2 

n  (1  Kd) n  n  o 

Maturity Value   (1  Kd) n 

“Hope is always available to us

When we feel defeated,

we need only take a deep breath and say,

“Yes,” and hope will reappear

”Success is the ability to go from failure to failure without losing your enthusiasm

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

Duration 

CA Aaditya Jain

DURATION OF A ZERO COUPON BOND : For a zero coupon bond ,

the duration is simply equal to the maturity of the bond while the duration of a normal coupon bond is less than the maturity

DURATION OF PERPETUAL BOND Duration Of Perpetual Bond =

VOLATILITY /SENSITIVITY/MODIFIED DURATION : Macaulay Duration

Symbolically :Volatility or Modified Duration or Sensitivity [ % ] = Yield To Maturity

Aaditya Jain

Note : % Change in Bond Price =

The Best FM Faculty Of India

CONVEXITY Convexity is calculated as follows : Convexity 

 Interest  1 Interest Interest  MaturityValue 2 (12  1)  (2 2  2) 

 (n  n)  2  1 2 n Bo  (1  YTM)  (1  YTM) (1  YTM) (1  YTM) 

The percentage change in a bond's price =

e Bo = Par Value Coupon Rate > YTM Premium Bond i

e Bo > Par Value Coupon Rate < YTM Discount Bond i

e Bo < Par Value Note : For the above relationship to be true the maturity value of the bond must be equal to face value

APPLICATION OF FLOTATION COST Flotation costs are the cost which are associated with issue of new debentures like underwriting ,

If Flotation cost is given we simply take Bond Value Net of Flotation Cost

- f ] 2

Where "f" is the flotation cost expressed in percentage

Flotation Cost may also be expressed in absolute amount in such case we will simply deduct flotation cost by bond value i

”“Life is either a daring adventure,

” Impossible is a word to be found only in the dictionary of fools

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

TAXATION EFFECT If income tax rate is given in question then Interest should be taken after tax

If Capital Gain Tax Rate is given then Maturity Value should be taken after tax i

e after adjusting it for Capital Gain Tax

Equation:  Maturity Value Net Of Capital Gain Tax – Issue Value  Interest(1

Where : Maturity Value Net Of Capital Gain Tax =Maturity Value

BOND IMMUNIZATION How we can achieve Immunization : This can be attained by selecting the bonds whose duration is equal to the investor's investment horizon

Aaditya Jain

The Best FM Faculty Of India VALUE OF IRREDEMABLE PREFERENCE SHARES

Value Of Irredemable Preference Shares =

Annual Dividend Kp

COST OF REDEEMABLE PREFERENCE SHARES Redeemable Preference Shares are those shares which can be redeemed after a specific period of time

 Maturity Value – P0  Dividend    n   How to Calculate Kp of Redeemable Preference Share: K p  Maturity Value  P0 2

Where Po

- Discount

As the maturity approaches a Premium Bond will decrease in value As the maturity approaches a Discount Bond will increase in value As the maturity approaches a Par Value Bond will remain same in value Note : For the above relationship to be true the maturity value of the bond must be equal to face value

FAIR VALUE OF CONVERTIBLE BOND Fair Conversion Value = Number Of Equity Shares Received on Conversion  Market Price Per Share prevailing at the time of conversion Fortune favours the brave

Men are born to succeed,

The fear of death follows from the fear of life

A man who lives fully is prepared to die at any time

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

PERCENTAGE OF DOWNSIDE RISK/PREMIUM OVER INVESTMENT VALUE Market Price Of Convertible Bond

CONVERSION PREMIUM OVER CONVERTIBLE VALUE Market Price Of Convertibl e Bond

CONVERSION PARITY PRICE Conversion Parity Price =

Market Price Of Convertibl e Bond No

of Equity Shares on Conversion

BREAKEVEN PERIOD FOR CONVERTIBLE PERIOD Breakeven Period =

Aaditya Jain

Excess Value On Conversion Annual Excess Receipt

The Best FM Faculty Of India

BOND STRIPS Bond Strips = Interest Strips + Principle Strips Value of a Bond is the sum of present value of two distinct cash flows streams viz Present Value Of Interest called the Interest Strips and Present Value of Principal repaid on maturity called the Principal Strip

An issuer may split the bond in two strips and sell them to different investors having different investment objectives

Example :Nominal Value of 12% bonds issued by a company is Rs

The bonds are redeemable at Rs

Coupons are paid annually

Determine value of interest strip & principal strip

Annual Yield rate is 10%

Solution: Interest Strip = 12 x PVAF (10%,5 Years) = 12 x 3

791 = 45

621 = 77

Existing Coupon rate:14%

New Coupon Rate:12%

Tax Rate:40%

Overlapping Period:2 Months

calculate the amount of Overlapping Interest

? Solution:The effect on overlapping Interest will only be applicable in case of Old Bond: Interest:300,00,000 x 14 % x 2/12 = 7,00,000 Tax Saving : Benefit @ 40 % 2,80,000 Overlapping Interest 4,20,000 CONFUSION REGARDING COUPON RATE & YTM Coupon Rate is the rate

at which company pays interest

YTM or Yield is the rate of return required by the investor of a bond

No matter how hard the past,

It is not because things are difficult that we do not dare,

it is because we do not dare that they are difficult

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

Note:It may be noted that any change in interest rate will only change yield and not coupon rate

In other words Coupon rate always remain constant unless otherwise specifically stated

RELATIONSHIP BETWEEN BOND VALUE AND YTM YTM and the Bond Value has inverse relationhip :

Other things remaining constant CALLABLE BONDS AND PUTABLE BONDS A Callable Bond is one when the issuer/borrower has an option to retire or redeem the bonds prior to the date of maturity A Puttable Bond is one where the holder (investor) has an option to get the bond redeemed prior to the date of maturity CALCULATION OF YTM OF HALF YEARLY INTEREST PAYMENT BOND

Aaditya Jain

Value – Issue Value   Maturity The Best FM Faculty Of India Interest per 6 months   nx2   Kd Of 6month  Maturity Value  Issue Value 2

Now Kd p

a = Kd for 6 month x 2 Example :Bond face Value:1000

Issue Value = 900

Interest paid half yearly

Coupon Rate=10%

Life= 5 years

Calculate YTM

?  Maturity Value – Issue Value   1000 – 900  Interest per 6 months    50    nx2 5x2      Solution: Kd Of 6 month  Maturity Value  Issue Value 1000  900 2 2

a EX-INTEREST & CUM INTEREST When Bond Value include the amount of Interest ,it is known as Cum-Interest,otherwise not

In all the Bond Equation Formula,Bond Value should be taken Ex-Interest

If Bond Value is given Cum-Interest then first we have to make it Ex-Interest then we should proceed with our calculation Note: (1)1 % = 100 basic points (2) If the question is silent about the maturity period of any investment say preference shares ,

debentures etc then we will assume such investmet as irredeemable or perpetual

(3)Interest is paid on face value

(4)If silent bond are always assumed to be redeemed at face value

Everything that is happening at this moment is a result of the choices you've made in the past

Failure is simply the opportunity to begin again,

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

MUTUAL FUND NET ASSET VALUE(NAV) Net Asset Of The Scheme

Total Asset

Symbolically : NAV = Number Of Units Outstanding = Number Of Units Outstanding Total Asset = Market Value of Investments + Receivables + Accured Income + Other Assets Total External Liability = Accured Expenses + Payables + Other Liabilities Note : In Mutual Fund ,

shares are termed as units and shareholders are termed as unitholders

VALUATION RULES In Mutual Fund NAV is calculated on a “mark to market” basis

In other words market value should be used for Mutual Fund valuation

If Market Value of any security is not given then in such case book value can be taken unless otherwise specifically stated

HOLDING PERIOD RETURN (HPR)

Holding Period Return 

Expense Ratio 

NPV at the end  NPV at the begining   Dividend Received  Capital Gain Received

Aaditya Jain NPV at the begining EXPENSE RATIO

Expenses Incurred Per Unit The Best FM Faculty OfOpening India NAV  Closing NAV Where Average NAV = Average NAV 2

RELATIONSHIP BETWEEN RETURN OF MUTUAL FUND,

RECURRING EXPENSES ,

INITIAL EXPENSES AND RETURN DESIRED BY INVESTORS Relationship Between Return Of Mutual Fund,

Recurring Expenses ,

Initial Expenses and Return Desired By Investors can be given by using following relation : Return Required By Investors  Return Of Mutual Fund  Recurring Expenses  (1  Issue Expenses)

ENTRY LOAD & EXIT LOAD Entry Load or Front End Load : When an investor purchase a unit of a Mutual Fund he has to pay a load in addition to the NAV of the units

Such load is known as Entry Lod

Total amount paid by the investor i

e purchase price or Sale Price Per Unit charged by Mutual Fund Company = NAV ( 1+ Entry Load ) Exit Load or Back End Load : When an investor sale his unit to a Mutual Fund he has to pay a load

Such load is known as Exit Lod

Total amount received by the investor on sale of unit or Repurchase/Buyback price of Mutual Fund=NAV(1- Exit Load ) CALCULATION OF DISCOUNT AND PREMIUM The premium or discount for close ended mutual fund is calculated by using following relation =

Market Price  NAV NAV

FALL IN NAV AFTER DIVIDEND OR ANY DISTRIBUTION NAV of Mutual Fund Scheme will fall to the extent of any distribution made by the company

For example:If Existing NAV is Rs

You can be anything you want to be,

do anything you set out to accomplish if you hold to that desire with singleness of purpose

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

PORTFOLIO MANAGEMENT RETURN OF A SECURITY OR ASSET : Holding Period Return 

Price At The End  Price At The Beginning   Income Distributi on Price At The Beginning

Return may be of two types :

Example :

Year Return (%) Calculate Average Return

AVERAGE RETURN BASED ON PAST DATA : 2000 2001 2002 2003 2004 10 20 15 30 25 10  20  15  30  25  20 5

Aaditya Jain

EXPECTED RETURN BASED ON PROBABILITY : The Best FM Faculty Of India Example : Return (%) 20 21 22 23 24 Probability

15 + 21 x

10 + 22 x

60 + 23 x

10 + 24 x

05 = 21

It is Pronounced as Sigma

Based On Past Data : Standard Deviation ( σ ) =

 (Given Return  Average Return) 2 n

Note:Sometimes in place of 'n' we can use 'n-1'

However students must give a note for this treatment

Standard Deviation ( σ ) =

(Given Return  Average Return) 2 n

Based On Probability : Standard Deviation (  ) =  probabilit y  (Given Return  Expected Return) 2 Variance Based On Past Data as well as Based on Probability : Variance = Standard Deviation 2 = σ 2 RANGE AS A MEASURE OF RISK : A simple way to measure the risk is to find out the range of possible returns

The range is the difference between the " highest There are those who dream and wish and there are those who dream and work

No man is a failure who is enjoying life

Niney-nine percent of failures come from people who have the habit of making excuses

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

and lowest expected return" For example : The possible returns of a security are 20 % ,

What is the range of risk

? Solution :Range Of Risk = 24 %

It is a relative measure of Risk Based On Past Data : CV =

Standard Deviation Standard Deviation Based On Probability : = CV Average Return Expected Return

Decision : Lower the Standard Deviation ,

Coefficient Of Variation ,

Variance or Range ,Lower will be the Risk Of Security

RULE OF DOMINANCE BASED ON SECURITY RETURN & RISK Rule 1: If Return of two security are different but Their Standard Deviation are Same

Decision : Security with higher Return is preferred

Rule 2: If Return of two security are same but Their Standard Deviation are Different

Decision : Security with Lower Standard Deviation is preferred

Rule 3: If Return and Standard Deviation of two security are different TheOf Best FM Faculty Of India Decision : In such case we should use Coefficient Variation

Securities with lower Coefficient Of Variation should be preferred

Aaditya Jain

PORTFOLIO Portfolio means combination of security

Assuming our portfolio consists of Security A and Security B with Weight A and Weight B we can calculate various measures relating to Portfolio Risk and Portfolio Return

RETURN OF PORTFOLIO The Return of the portfolio is the weighted average return of individual security

On the Basis Of Past Data : Return Of Portfolio = A's Average Return  Weight A + B's Average Return  Weight B On the Basis Of Probability : Return Of Portfolio = A's Expected Return  Weight A + B's Expected Return  Weight B Note : Weights used in Portfolio for different security will always be equal to 1

RISK OF PORTFOLIO STANDARD DEVIATION OF THE PORTFOLIO CONSISTING OF TWO SECURITY : Standard Deviation( [σ1 2 ] )  σ12 w 12  σ 2 2 w 2 2  2 σ1 w 1 σ 2 w 2 r1,2 Where ,

σ1 2 = Standard Deviation of Portfolio consisting of Security 1 & 2

σ1  Standard Deviation Of Security 1

σ 2  Standard Deviation Of Security 2

W1  Weight Of Security 1

W2  Weight Of Security 2

r 1,2 Coefficient Of Correlation Between Security 1 and Security 2

COEFFICIENT OF CORRELATION (R) : Correlation answer the following question : Does there exist an association between the two variables

It shows the relationship or association between two variable

It expresses the degree of closeness between two variables

The value of r ranges between

-1 and + 1

“If you deliberately plan on being less than you are capable of being,

then I warn you that you'll be unhappy for the rest of your life

The only thing that will stop you from fulfilling your dreams is you

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

Based On Past Data as well as Probability : Coefficient of Correlation between A & B : ( rA ,

B ) 

Covariance (A ,

B ) σA  σB

COVARIANCE Covariance also indicate link between the return of two securities just like Coefficient Of Correlation

But the value of covariance may range from α to α i

Based On Past Data : Covariance (A ,

 Given Return A  Average Return A   Given Return B  Average Return B   d A  d'B   n n

Note:Sometimes in place of 'n' we can use 'n-1'

However students must give a note for this treatment

Covariance (A ,

 Given Return A  Average Return A   Given Return B  Average Return B  d A  d'B   n

Based On Probability :

Aaditya Jain The Best FM Faculty Of India

Covariance (A ,

B)  Given Return A  Expected Return A   Given Return B  Expected Return B    d A  d'B 

Note : (i) The value Correlation Of Coefficient (r) ranges between + 1 and

(ii) When r = + 1 When r = + 1 It is a Perfect Positive Correlated Portfolio When r = + 1 Portfolio Risk will be Maximum When r = + 1 Standard Deviation Of Portfolio will become (σ A  B )  σ A  WA  σ B  WB i

e it become weighted average risk of individual security consisting a portfolio

When r = 0 Standard Deviation Of Portfolio will become (σ A  B )  σ A  WA (v) As r decreases risk also decreases

Lesser the correlation ,

Higher the correlation ,

greater would be the risk of the portfolio

When r = +1 Portfolio has its maximum risk and in such case there can be No risk reduction

When r =

STANDARD DEVIATION OF PORTFOLIO CONSISTING OF THREE SECURITIES The only man who never makes mistakes is the man who never does anything

Work as though you would live forever,

and live as though you would die today

Delhi : 9911442626

Kolkata SFM-For those who want :to9339238834 score 90+ Dare To Dream

Beyond 90

CA Aaditya Jain

σ ABC  σ 2A w 2A  σ 2B w 2B  σ C2 w 2c  2w A σ A w B σ B r

 2w A w C σ A σ C rAC  2w B w C σ C σ BrBC

STANDARD DEVIATION OF PORTFOLIO CONSISTING OF FOUR SECURITIES σ ABC 

σ 2A w 2A  σ 2B w 2B  σ 2C w C2  σ 2D w 2D  2w A σ A w B σ B r

 2w B w C σ C σ B rBC  2w C w D'σ C σ D'rCD  2w D'w A σ D'σ A rDA  2w B w D'σ B σ D'rBD

CALCULATION OF OPTIMUM WEIGHTS TO MINIMIZE PORTFOLIO RISK WA 

σB2  r A ,

B  σA  σB

σA 2  σB2  2  r A ,

B  σA  σB

WA  WB  1

σ B  Covariance (A,

B) σ A 2  σ B 2  2  Covariance (A,

Aaditya Jain

SHORT CUT FORMULA FOR OPTIMUM WEIGHTS WHEN r  1 When r =

WY  1  WX σX  σ Y

The Best FM Faculty Of India WX  WY  1

PORTFOLIO CONSISTING RISK FREE SECURITY & MARKET PORTFOLIO Case 1 : Invest 100 % in Market Portfolio and 0% in Rf security Standard Deviation ( Risk ) ( σ ) = Standard Deviation of Market or Risk of Market or σ Market Return = Return from Market or R m Case 2 : Invest 0 % in Market Portfolio & 100 % in Risk Free Security Standard Deviation ( Risk ) ( σ ) = zero [ As Standard Deviation Of Risk Free Security is always zero ] Return = Risk Free Rate or R f Case 3:Invest between 0 % and 100 % in Market Portfolio In such case he should invest few portion of his wealth in risk free security and few portion of wealth in market portfolio Return Of Portfolio = Market ReturnWeight Of Market PortfolioRisk Free ReturnWeight Of Risk Free Security = R m  Wm  R f  Wf Standard Deviation / Risk Of Portfolio = Standard Deviation Of Market  Weight Of Market Portfolio = σ m  Wm Case 4 :Invest more than 100 % in Market Portfolio( Risk Free Borrowing) In such case since investment is more than 100 % in market portfolio,the excess amount required for investment should be borrowed at risk free rate

Let the additional amount to be borrowed be x

Return Of Portfolio

= Market Return  (1  x)  Risk Free Return Paid on Borrowing  x = R m  (1  x)  R f  x

Know the true value of time

No idleness,

never put off till tomorrow what you can do today

Delhi : 9911442626

Kolkata 9339238834 SFM-For those who want to: score 90+ Dare To Dream

Beyond 90

CA