6.Stock 公司金融

STOCK VALUATION“…changes in security prices are fundamentally unpredictable and this result is a natural consequence of well- functioning capital markets……when we use the concept of present value to price common stocks, we are not promising you a key to investment success; we simply believe that the idea can help you understand why some investments are priced higher than others.”Brealey & Myers COMMON STOCK VALUATIONCash payback to stocks comes in two forms:1)Cash dividends2)Capital gains or losses▪Terms:P0- Current price per shareP1- Price per share in 1 year’s timeD1- Expected dividend per share in1 years’s timer - Expected return on similarsecurities▪Basic equation for an investor, recognizing that payback comes from both dividends and capital gains:P0= D1+ P1D t/(1+r)t+ P n/(1+r)nP0= ∑n1P0= ∑n1D t/(1+r)t▪THE PRICE OF A SHARE IS EQUAL TOTHE PV OF ALL FUTURE DIVIDENDS Two Normal Reactions1st:T hat the dividend pricing model for a common stock ignores capital gain, which is why people buy stocks such as Microsoft . The formula was derived from the assumption that price in any period is determined by expected dividends and capital gains over the next period.2nd:B ut the model requires that the analyst know all future dividends and that isn’t possible. This is a real problem. The dividend-pricing model is difficult to use but that d oesn’t undermine the conceptual importance of the basis framework. We simply have to use the model with the available information to assist us in estimating the value of stocks and tounderstand why one stock is priced higher than another.SPECIAL CASESA.CONSTANT GROWTH▪Many established companies pride themselves on achieving constant growth, in both earnings and dividends, over an extended period of time.▪Such a forecast does not preclude year-to-year deviations from the trend. Since prices are all based on expectations, it simply means that constant growth is expected for earnings and dividends.▪With an expectation of constant growth, g, we can estimate the value of the stock on the basis of the formula for a growing perpetuity.P0= D1where:g = the rate of growth of thedividend in perpetuity. Example:▪If a utility company (a relatively low risk investment) has a dividend of $4 planned for next year and a history of increasing dividends by 5% per year, what is the price today?B.UNEVEN GROWTH▪Care must be taken in using any formula that assumes constant growth, because firms have life cycles.▪When firms are young, they grow quickly; then, they slow down and grow more moderately. Some cease growth and many die.▪With good judgement, however, the formulacan still be instructive.Example:▪Good Idea Corp. will pay no dividends for 5 years.▪In the 6th year, it will pay a $1 dividend and will then double the dividend for each of the next 3 years.▪For the 10th and subsequent years, the dividend will increase by 5%.▪Companies of this type provide a 12% rate of return.▪Prepare a dividend time chart:t1 to t5t6t7t8t9t10 Dividend 0 1 2 4 8 8.4▪According to the dividend growth pricing model, then, the P0for Good Idea Corp. should be $49.18 despite the fact thatdividends will not be paid until the 6th year. Components of the Required Return▪The dividend growth pricing model can be simplified by rearranging the equation.P0= D1r – g = D1/P0r = D1+ gP0D1P0is the DIVIDEND YIELDT he stock’s cash dividenddivided by its current price.g is the YIELD ATTRIBUTABLE TOGROWTHT he dividend growth rate orthe rate at which the valueof an investment grows Let’s take the examples of CIBC and Telus▪CIBCP/E = 9.2 45.70/EPS =9.2CIBC Earnings per share = $4.97▪TelusP/E = 14.2 41.15/EPS = 14.2Telus Earnings per share = $2.90▪Is the CIBC necessarily a better stock to own than Telus because the P/E ratio is considerably lower and the earnings per share are higher?How can the price of Telus be so close to the price of CIBC when the earnings are so muchlower per share?▪CIBCP0 =$18.86 vs. $45.70g = 9.11%▪TelusP0 $20 vs. $41.15g = 8.60%1) With these assumptions, the CIBC is returning less to its owners through the dividend payment.2) The dividend growth model suggested an unrealistically high “g” would be required to generate the appropriate rate of return. Such a result might create concern that the price of the stock was unrealistically high.3) Alternatively, in this particular comparison,one might argue that Telus is in a rapidly evolving, and therefore risky, industry and that a higher rate of return would be required to compensate the investors for the higher risk.4) All we can say at this point is that an analytical framework such as the dividend growth model can provide us with guidance in the evaluation of different stocks.Stock Price and Earnings Per Share▪Advisors often focus on the importance of buying stocks with low price earnings ratios in a very simplistic way.▪Intuitively, a low price earnings ratio makes good sense, since one is buying more dollars of earnings per dollar invested in the stock. ▪Let’s investigate : suppose a firm was entirely stagnant and paid out, as a perpetuity, all of its earnings as dividends.P0 = D/r = EPS/r▪The Price of this firm would grow only if one or more investments were made that created a positive net present value for the firm.▪Call those investments:NPVGO = Net Present Value GrowthOpportunitiesWe can re-write the pricing equation:P0= EPS/r + NPVGOOr, dividing through by EPSP0= 1 + NPVGOEPS r EPS▪Suppose a publicly traded firm with a low P/E ratio had many growth opportunities. Why wouldn’t an efficient stock marketimmediately drive the price to an appropriate level.▪Let’s look at our two stocks in this context.P0= 1 + NPVGOr EPSCIBC9.2 = 8.33 + Value of growth opportunitiesTelus14.2 = 8.33 + Value of growth opportunities▪Obviously, a much greater proportion of the value attributed to Telus by the stock market is based on its evaluation of the growth opportunities available to Telus.Problems with Using Earnings▪Different industries are accounted for differently and accounting rules do notdefine earnings in the same way that a financial analyst would.▪The use of CIBC and Telus as examples result in a comparison of very different accounting and tax regulations.▪Comparison within the same industry group would be more useful but will still be complicated by accounting definitions.Exercise 1The only ore body being operated by the Tarnished Gold Mine is being depleted and the Directors have decided to slowly distribute the assets of the company in a series of dividend payments. The company just paid a $30 dividend and will reduce the dividend by 8% per year, indefinitely. If a 20% return were required, what would you pay for the stock today?D0 = $30 r = 20% g = -8%D1 = 30 * .92 = $27.60P0 = D1/(r – g)= 27.60/.28You would be prepared to pay $98.57。