A zero-coupon bond is a type of bond that doesn’t make coupon payments. This type of bond is issued with a big discount to its face value. At the time of maturity, the bondholder receives the face value of the bond, which means that the current price has to be lower than the face price. The … Read More about Zero Coupon Bond Value Formula

## Geometric Mean Return Formula

The geometric mean return formula is a way to calculate the average rate of return per period on investment that is compounded over multiple periods. It allows understanding the effect of compounding of a portfolio of financial instruments (investments). Compounding is a process of reinvesting … Read More about Geometric Mean Return Formula

## Capital Gains Yield Formula

The capital gains yield (CGY) formula calculates the change in stocks’ (or other securities) prices over a given time period. CGY formula doesn’t take into account any dividends and is based only on stock price appreciation. CGY should be analysed before making a decision whether to buy shares … Read More about Capital Gains Yield Formula

## Total Stock Return Formula

The total stock return formula calculates an internal rate of return of a stock to an investor during the holding period of this investment. The total stock return for shareholders measures shareholder’s earnings, taking into account changes in stocks’ prices (capital gain) plus dividends paid … Read More about Total Stock Return Formula

## Earnings per Share Formula

The earnings per share formula (EPS) is a measure of a company’s profitability. EPS is a financial indicator that shows how much profit a company has generated per one common stock. This is one of the most popular indicators in the fundamental analysis, which is calculated by dividing the net … Read More about Earnings per Share Formula

## Risk Premium Formula

The formula for risk premium, also known as default risk premium, calculates the difference between the expected rate of return on investment and the risk-free rate. It is additional compensation that investors expect from an investment based on its level of risk. Risk premium is a measure that … Read More about Risk Premium Formula

## Yield to Maturity Formula

The yield to maturity formula, also known as book yield or redemption yield, is used in finance to calculate the yield of a bond at the current market price. It is calculated to compare the attractiveness of investing in a bond with other investment opportunities. YTM (Yield to Maturity) is the … Read More about Yield to Maturity Formula

## Equity Multiplier Formula

What Is Equity Multiplier? An Equity Multiplier is a measure of a company’s financial leverage computed by comparing Total Company’s Assets with Shareholders’ Equity. In other words, it’s the amount of company’s assets financed or owed by the shareholders. A financial leverage is a direct … Read More about Equity Multiplier Formula

## Current Yield Formula

What is the Current Yield formula? The current yield is the annual return of a bond based on the annual coupon payment and current bond price (vs its original price or face). The current yield formula takes into consideration the current price of the bond instead of the face value of the bond. … Read More about Current Yield Formula