国际财务管理 5.ppt

• Treasury Bills and principal-only Treasury strips are good examples of zeroes.
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Discount Model 5.6 Growth Opportunities 5.7 The Dividend Growth Model and the NPVGO
Model 5.8 Price-Earnings Ratio 5.9 Stock Market Reporting
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$0
$0
$0
$F
0
1
2
T 1
T
Present value of a pure discount bond at time 0:
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Slide 7
Pure Discount Bonds
• Make no periodic interest payments (coupon rate = 0%)
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Slide 5
5.2 How to Value Bonds
• Primary Principle:
– Value of financial securities = PV of expected future cash flows
Slide 3
Chapter Outline
5.1 Definitions and Example of a Bond 5.2 How to Value Bonds 5.3 Bond Concepts 5.4 The Present Value of Common Stocks 5.5 Estimates of Parameters in the Dividend-
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 4
5.1 Definition of a Bond
• A bond is a legally binding agreement between a borrower and a lender that specifies the:
• Know the important bond features and bond types
• Understand bond values and why they fluctuate
• Understand how stock prices depend on future dividends and dividend growth
• The entire yield to maturity comes from the difference between the purchase price and the par value.
• Cannot sell for more than par value
• Sometimes called zeroes, deep discount bonds, or original issue discount bonds (OIDs)
Slide 8
Pure Discount Bonds
Information needed for valuing pure discount bonds: – Time to maturity (T) = Maturity date - today’s date – Face value (F) – Discount rate (r)
• Be able to compute stock prices using the dividend growth model
• Understand how growth opportunities affect stock values
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
CHAPTER
5
How to Value Bonds and Stocks
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 2
Key Concepts and Skills
– Par (face) value – Coupon rate – Coupon payment – Maturity Date
• The yield to maturity is the required market interest rate on the bond.
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• Bond value is, therefore, determined by the present value of the coupon payments and par value.
Hale Waihona Puke • Interest rates are inversely related to present (i.e., bond) values.
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Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 6
The Bond Pricing Equation
Bond
Value
C
1
1 (1 R) T
R
FV (1 R)T