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