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barcode in vb.net source code STREETSMART GUIDE TO VALUING A STOCK in Software
STREETSMART GUIDE TO VALUING A STOCK Data Matrix ECC200 Reader In None Using Barcode Control SDK for Software Control to generate, create, read, scan barcode image in Software applications. Print Data Matrix 2d Barcode In None Using Barcode generation for Software Control to generate, create ECC200 image in Software applications. ing of the expected cash flows and the risks associated with receiving the expected cash flows. The discount rate is a function of both time and risk: discount rate f (time, risk). The discount rate should increase with increasing default risk (e.g., a WorldCom bond) and decrease with lower default risk (e.g., U.S. Treasury bonds) associated with the expected cash payment. Similar to the discount rate, the discount factor takes into account both the discount rate and the timing of the expected cash flow. The discount factor is a function of both time and the discount rate: discount factor f (time, discount rate). For example, the discount factor for a oneyear cash flow, whose discount rate is 6 percent, is simply equal to one divided by (1.06) which in equation form looks like this: 1/(1.06) .9434. The discount factor for a twoyear cash flow, whose discount rate is also 6 percent, is equal to one divided by (1.06) .9434, that amount divided again by (1.06) .9434/(1.06) .8900. This process for a threeyear cash flow continues with a third division by (1.06). And so on, ad infinitum. As you can see from this example, the discount factor decreases with increasing time to the payment of a cash flow, and it also decreases with an increasing discount rate. The value of an investment, known as the present value (PV), is found by taking the sum of the expected cash flows multiplied by their respective discount factors. For example, using a 6 percent discount rate, a discount factor of (.9434), and an expected $100 cash flow in one year, the present value of that cash flow would be $100 times (.9434): $100 * (.9434) $94.34. Using a 6 percent discount rate, a $100 cash flow expected in two years, and a discount factor of (.8900), the present value of that cash flow would be: $100 * (.8900) $89.00. The value of an investment is the sum of the present values of all of the expected cash flows. The present value of the two cash flows described above is: PV $94.34 $89.00 $183.34. Read Data Matrix In None Using Barcode reader for Software Control to read, scan read, scan image in Software applications. Encode Data Matrix 2d Barcode In C# Using Barcode generator for VS .NET Control to generate, create Data Matrix image in VS .NET applications. Mary s Mortgage: A DCF Example Valuation
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ANSI/AIM I2/5 Creator In None Using Barcode generator for Software Control to generate, create Interleaved 2 of 5 image in Software applications. Create Code39 In VB.NET Using Barcode generation for VS .NET Control to generate, create USS Code 39 image in Visual Studio .NET applications. monthly mortgage payment is $734 for 360 months, as shown in Exhibit 31. Mary s $734 monthly payments are the cash flows that she is obligated to pay under her mortgage agreement and that the bank expects to receive for lending her the money. Over the life of the mortgage (assuming that she doesn t prepay it), Mary will pay a total of $264,240 ($734 * 360 months) to the bank $100,000 is the return of principal and $164,240 is the payment of interest. The initial mortgage amount of $100,000 represents the present value to the bank of the 360 monthly payments of $734 each discounted using a rate of 8 percent and the appropriate discount factor. The 8percent mortgage rate is the discount rate, or yield, that the bank requires to lend Mary the money. The discount rate is a function of the general level of interest rates in the economy, as represented by the yield on a U.S. Treasury bond with a similar maturity, plus a risk premium for the bank to compensate it for the possibility that Mary may not make her payments. U.S. Treasury bonds are risk free because Uncle Sam can always print more money to repay its loans! The interest or discount rate that the bank requires on Mary s mortgage depends upon the market interest rate at the time she gets her loan. If interest rates change, the present value of the mortgage could increase or decrease. Consider these two scenarios: 1. If interest rates rise, the bank will increase its lending rates on new mortgage loans in order to cover the higher market interest rates that the bank offers to attract deposits. For example, if interest rates rise 1 percent (also known as 100 basis points), the Code 3 Of 9 Maker In Java Using Barcode generation for Java Control to generate, create Code 3 of 9 image in Java applications. Matrix 2D Barcode Drawer In .NET Framework Using Barcode creation for VS .NET Control to generate, create Matrix 2D Barcode image in .NET framework applications. Generate 2D Barcode In VS .NET Using Barcode printer for ASP.NET Control to generate, create 2D Barcode image in ASP.NET applications. Make EAN13 In Java Using Barcode printer for Java Control to generate, create UPC  13 image in Java applications. Make Data Matrix In Java Using Barcode creator for BIRT Control to generate, create ECC200 image in BIRT applications. Paint Barcode In .NET Framework Using Barcode creator for ASP.NET Control to generate, create barcode image in ASP.NET applications. 
