FREQUENTLY USED SYMBOLS ACP Average collection period ADR American Depository Receipt APR Annual percentage rate AR Accounts receivable b Beta coefficient, a measure of an asset’s market risk bL Levered beta bU Unlevered beta BEP Basic earning power BVPS Book value per share CAPM Capital Asset Pricing Model CCC Cash conversion cycle CF Cash flow; CFt is the cash flow in Period t CFPS Cash flow per share CR Conversion ratio CV Coefficient of variation Δ Difference, or change (uppercase delta) Dps Dividend of preferred stock Dt Dividend in Period t DCF Discounted cash flow D/E Debt-to-equity ratio DPS Dividends per share DRIP Dividend reinvestment plan DRP Default risk premium DSO Days sales outstanding EAR Effective annual rate, EFF?IT Earnings before interest and taxes; net 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 

 I Interest rate; also denoted by r 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 LP Liquidity premium M (1) Maturity value of a bond (2) Margin (profit margin) M/B Market-to-book ratio MIRR Modified Internal Rate of Return MRP Maturity risk premium MVA Market Value Added n Number of shares outstanding N Calculator key denoting number of periods N(di) Represents area under a standard normal distribution function NOPAT Net operating profit after taxes NOWC Net operating working capital NPV Net present value P (1) Price of a share of stock in Period t; P0 = price of the stock today (2) Sales price per unit of product sold Pc Conversion price Pf Price of good in foreign country Ph Price of good in home country PN A stock’s horizon, or terminal, value P/E Price/earnings ratio 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 Breakeven quantity r (1) A percentage discount rate, or cost of capital