The Straight Answer: Core Formulas and How I Use Them If you need the bottom line first: the most common way to calculate cost of equity is the Capital Asset Pricing Model (CAPM), expressed as Rf + β(Rm − Rf).…
Maximum drawdown (MDD) is the largest percentage drop from a peak to a subsequent trough in any value series. The formula is MDD = (Peak – Trough) / Peak, expressed as a negative or absolute percentage. To calculate it, you…
Two Meanings Of ‘Drawdown’ And The Basic Calculation To calculate portfolio drawdown, apply this formula at any point t: Drawdown_t = (Peak_t − Value_t) / Peak_t, where Peak_t is the highest portfolio value observed up to that moment. This is…
The Straight Answer: How to Calculate Bond Yield (and What a 10-Year Bond Yields Today) If you need the core math right now, here it is: for a coupon-paying bond, the simplest yield is current yield = annual coupon ÷…
The Straight Answer: How to Calculate a Bond Coupon Payment If you want to know how to calculate bond coupon payment for any bond, use one line: face value × (annual coupon rate ÷ payments per year). That gives the…
The Straight Answer on Growth vs Value Stocks: Which Is Better? If you’re asking “growth vs value stocks which is better,” the honest answer is that neither style wins permanently. In my 15 years managing institutional portfolios, the mistake I…
How to Calculate Forward P/E Ratio (and Why It’s Your First Valuation Filter) To calculate the forward P/E ratio, divide a company’s current share price by its expected earnings per share (EPS) for the next 12 months or the upcoming…
If you are asking how to calculate loan default risk for a real consumer or small-business loan, the shortest answer is: estimate the probability the borrower stops paying (PD), multiply it by the percentage of the loan you will lose…
The Direct Answer: Debit Card vs Credit Card Which Costs More If you landed here searching debit card vs credit card which costs more, here is the unvarnished verdict: the credit card is cheaper for disciplined pay-in-full users because rewards…
The Universal Formula: How Overdraft Fees Are Actually Calculated If you want to know how to calculate overdraft fees, start with the equation every bank back-office uses: Total Overdraft Cost = (Daily Overdraft Amount × Daily Fee or Interest Rate…