FREQUENTLY USED SYMBOLS/ABBREVIATIONS

ACP Average collection period

ADR American depository receipt
AFN Additional funds needed
AMT Alternative minimum tax
APR Annual percentage rate
b Beta coefficient, a measure of an asset’s riskiness
bL Levered beta
bU Unlevered beta
BEP Basic earning power
BVPS Book value per share
CAPEX Capital expenditures
CAPM Capital Asset Pricing Model
CCC Cash conversion cycle
CF Cash flow; CFt is the cash flow in Period t
CV Coefficient of variation
Dp Dividend of preferred stock
Dt Dividend in Period t
DCF Discounted cash flow
D/E Debt-to-equity ratio
DEP Depreciation
D1/P0 Expected dividend yield
DPS Dividends per share
DRIP Dividend reinvestment plan
DRP Default risk premium
DSO Days sales outstanding
EAA Equivalent annual annuity
EAR Effective annual rate, EFF%
EBIT Earnings before interest and taxes; operating income
EBITDA Earnings before interest, taxes, depreciation, and amortization
EPS Earnings per share
EVA Economic value added
F (1) Fixed operating costs
(2) Flotation cost
FCF Free cash flow
FVN Future value for Year N
FVAN Future value of an annuity for N years
g Growth rate in earnings, dividends, and stock prices
GAAP U.S. Generally Accepted Accounting Standards
HVN Firm’s horizon value at t N
I Interest rate; also referred to as r
IFRS International Financial Reporting Standards
IPER Periodic interest rate
I/YR Interest rate key on some calculators
INT Interest payment in dollars
IP Inflation premium
IPO Initial public offering
IRR Internal rate of return
LIBOR London Interbank Offer Rate
LP Liquidity premium
M Maturity value of a bond
M/B Market-to-book ratio
MIRR Modified internal rate of return
MRP Maturity risk premium
MVA Market value added
N Calculator key denoting number of periods
NOPAT Net operating profit after taxes, EBIT(1 − T)
NOWC Net operating working capital
NPV Net present value
P Sales price per unit of product sold
Pf Price of good in foreign country
Ph Price of good in home country
Pt Price of a share of stock in Period t; P0 price of the stock today
P/E Price-to-earnings ratio

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 PMT Payment of an annuity
PPP Purchasing power parity
PV Present value
PVAN Present value of an annuity for N years
Q Quantity produced or sold
QBE Break-even quantity
r (1) A percentage discount rate, or cost of capital; also referred to as I
(2) Nominal risk-adjusted required rate of return
r “r bar,” historic, or realized, rate of return
r “r hat,” an expected rate of return
r* Real risk-free rate of return
rd Before-tax cost of debt
rd(1 − T) After-tax cost of debt
re Cost of new common stock (external equity)
rf Interest rate in foreign country
rh Interest rate in home country
ri Required return for an individual firm or security
rM Return on “the market,” or on an “average” stock
rNOM Nominal rate of interest; also referred to as INOM
rp (1) Cost of preferred stock
(2) Portfolio’s return
rRF Rate of return on a risk-free security, equal to r* IP
rs (1) Cost of retained earnings
(2) Required return on common stock
Correlation coefficient; also denoted as R when using historical data
ROA Return on assets
ROE Return on equity
ROIC Return on invested capital
RP Risk premium
RPM Market risk premium
S (1) Sales
(2) Estimated standard deviation for sample data
SML Security Market Line
∑ Summation sign
Standard deviation
t Time period
T Marginal income tax rate
TIE Times interest earned
V (1) Variable cost per unit
(2) Current value of a call option
VB Bond value
Vp Value of preferred stock
VC Total variable costs
WACC Weighted average cost of capital
wc Percentage of common stock in capital structure
wd Percentage of debt in capital structure
wp Percentage of preferred stock in capital structure
YTC Yield to call
YTM Yield to maturity

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
 FUNDAMENTALS OF
FINANCIAL
MANAGEMENT
Eugene F. Brigham
University of Florida

Joel F. Houston
University of Florida

Concise
Eighth Edition

Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States

Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.
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Copyright 2013 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.