公司理财第八章PPT教材

1
2
34
5
$C1 $C2 $C3 $C4 $C5 $M
Notice these differences:
• The dividends arபைடு நூலகம் different • The stock never ends • There is no lump sum
1
2
34
5∞
$D1 $D2 $D3 $D4 $D5 $D∞
What is the Observed Pattern?
We value a share of stock by bring back all expected future dividends into present value terms
Future Dividends
So the key is to determine the future dividends when given the growth rate of those dividends, whether the growth is zero, constant, or unusual first and then levels off to a constant growth rate.
One-Period Example
Receiving one future dividend and one future selling price of a share of common stock
One-Period Example
Suppose you are thinking of purchasing the stock of Moore Oil, Inc. You expect it to pay a $2 dividend in one year, and you believe that you can sell the stock for $14 at that time.
So how do you compute the future dividends?
Three scenarios:
1. A constant dividend (zero growth)
2. The dividends change by a constant growth rate
3. We have some unusual growth periods and then level off to a constant growth rate
• Both provide long-term funding for the organization
• Both are future funds that an investor must consider
• Both have future periodic payments
• Both can be purchased in a marketplace at a price “today”
3. We have some unusual growth periods and then level off to a constant growth rate
2. Constant Growth Rate of Dividends
Dividends are expected to grow at a constant percent per period.
Bonds and Stocks: Differences
• From the firm’s perspective: a bond is a long-term debt and stock is equity
• From the firm’s perspective: a bond gets paid off at the maturity date; stock continues indefinitely.
Common Stock
And how will we accomplish our task?
B Bring A All E Expected F Future E Earnings I Into P Present V Value
T Terms
Just remember:
BAEFEIPVT
1st 2nd
PV = ?
8-22
1 year = N 20% = Discount rate
HP 12-C
$2 = Payment (PMT)
PV = ?
$14 = FV
-13.34
Two Period Example
Now, what if you decide to hold the stock for two years? In addition to the dividend in one year, you expect a dividend of $2.10 in two years and a stock price of $14.70 at the end of year. Now how much would you be willing to pay?
• Coupon payments are fixed; stock dividends change or “grow” over time
A visual representation of a bond with a coupon payment (C) and a maturity value (M)
Visually this would look like:
R = 20% 1
2
D1 = $2
D2 = $ 2.10 P2 = $14.70
Compute the Present Value
R = 20% 1
2
$1.67 $1.46 $ 10.21
$ 13.34 = P0
D1 = $2
D2 = $ 2.10 P2 = $14.70
1. The growth of all future dividends must be constant,
So how do you compute the future dividends?
Three scenarios:
1. A constant dividend (zero growth)
2. The dividends change by a constant growth rate
3. We have some unusual growth periods and then level off to a constant growth rate
P0 = D / R
So how do you compute the future dividends?
Three scenarios:
1. A constant dividend (zero growth)
2. The dividends change by a constant growth rate
• We will discuss the mix of bonds (debt) and stock (equity) in a future chapter entitled capital structure
Bonds and Stocks: Differences
• A bond has coupon payments and a lump-sum payment; stock has dividend payments forever
Chapter Outline
• Bond and Stock Differences • Common Stock Valuation • Features of Common Stock • Features of Preferred Stock • The Stock Markets
Bonds and Stocks: Similarities
公司理财第八章PPT教 材
2020/7/31
Chapter Outline
• Bond and Stock Differences • Common Stock Valuation • Features of Common Stock • Features of Preferred Stock • The Stock Markets
If you require a return of 20% on investments of this risk, what is the maximum you would be willing to pay?
Visually this would look like:
1 R = 20%
D1 = $2 P1 = $14
2. Constant Growth Rate of Dividends
Student caution:
A. What happens if g > R? B. What happens if g = R?
Dividend Growth Model (DGM) Assumptions
To use the Dividend Growth Model (aka the Gordon Model), you must meet all three requirements:
Bond
0
1
2
3
P0
C
C
C
M
Common Stock
0
1
2
3
P0
D1
D2
D3 D∞
Notice these differences:
• The “C’s” are constant and equal • The bond ends (year 5 here) • There is a lump sum at the end
Chapter Outline
• Bond and Stock Differences • Common Stock Valuation • Features of Common Stock • Features of Preferred Stock • The Stock Markets
Our Task: To value a share of
1
2
34
5
$C1 $C2 $C3 $C4 $C5 $M
A visual representation of a share of common stock with dividends (D) forever
1
2
34
5∞
$D1 $D2 $D3 $D4 $D5 $D∞
Comparison Valuations
Compute the Present Value
1 R = 20%
$1.67 $11.67 PV =$13.34
D1 = $2 P1 = $14
-13.34
TI BA II Plus 1 year = N 20% = Discount rate
$2 = Payment (PMT) $14 = FV
Cash Flows for Stockholders
If you buy a share of stock, you can receive cash in two ways:
1. The company pays dividends
2. You sell your shares, either to another investor in the market or back to the company
1. Constant Dividend – Zero Growth
• The firm will pay a constant dividend forever
• This is like preferred stock
• The price is computed using the perpetuity formula:
P0 = D1 /(1+R) + D2 /(1+R)2 + D3 /(1+R)3 + …
P0 = D0(1+g)/(1+R) + D0(1+g)2/(1+R)2 + D0(1+g)3/(1+R)3 + …
2. Constant Growth Rate of Dividends
With a little algebra this reduces to: