Definitions
pow(x) = to the power of x.Value of a Perpetuity
PV = 1 / r
Value of a Growing Perpetuity (“Gordon” model)
PV = 1 / (r - g)
Annuity
PV = (1 / r) - (1 / r(1 + r)pow(t))
Continuos Compounding
PV = 1 / e pow(rt)
where: r = the continuously compounded rate of interest
Capital Asset Pricing Model
r = rf + ß (rm - rf)
Retailing
where GM = gross margin on retail price and MU = mark-up on cost price
GM = MU / (1+MU)
MU = GM / (1-GM)