罗斯公司理财Chpt005.ppt

1、McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-0Corporate Finance Ross Westerfield JaffeSixth EditionSixth Edition5Chapter Five How to Value Bonds and StocksMcGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-1Chapter Outline

2、5.1Definition and Example of a Bond5.2How to Value Bonds5.3 Bond concepts5.4The Present Value of Common Stocks5.5Estimates of Parameters in the Dividend-Discount Model5.6Growth Opportunities5.7The Dividend Growth Model and the NPVGO Model(Advanced)5.8Price Earnings Ratio5.9Stock Market Reporting5.10

3、 Summary and ConclusionsMcGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-2Valuation of Bonds and StockFirst Principles:Value of financial securities=PV of expected future cash flows To value bonds and stocks we need to:Estimate future cash flows:Size(how much)an

4、d Timing(when)Discount future cash flows at an appropriate rate:The rate should be appropriate to the risk presented by the security.McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-35.1 Definition and Example of a BondA bond is a legally binding agreement betwe

5、en a borrower and a lender:Specifies the principal amount of the loan.Specifies the size and timing of the cash flows:In dollar terms(fixed-rate borrowing)As a formula(adjustable-rate borrowing)McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-45.1 Definition and

6、 Example of a BondConsider a U.S.government bond listed as 6 3/8 of December 2009.The Par Value of the bond is$1,000.Coupon payments are made semi-annually(June 30 and December 31 for this particular bond).Since the coupon rate is 6 3/8 the payment is$31.875.On January 1,2002 the size and timing of

7、cash flows are:McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-55.2 How to Value BondsIdentify the size and timing of cash flows.Discount at the correct discount rate.McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-6Pure D

8、iscount BondsInformation needed for valuing pure discount bonds:Time to maturity(T)=Maturity date-todays dateFace value(F)Discount rate(r)Present value of a pure discount bond at time 0:McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-7Pure Discount Bonds:Exampl

9、eFind the value of a 30-year zero-coupon bond with a$1,000 par value and a discount rate of 6%.McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-8Level-Coupon BondsInformation needed to value level-coupon bonds:Coupon payment dates and time to maturity(T)Coupon p

10、ayment(C)per period and Face value(F)Discount rateValue of a Level-coupon bond=PV of coupon payment annuity+PV of face valueMcGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-9Level-Coupon Bonds:ExampleFind the present value(as of January 1,2002),of a 6-3/8 coupon

11、 T-bond with semi-annual payments,and a maturity date of December 2009 if the discount rate is 5-percent.On January 1,2002 the size and timing of cash flows are:McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-145.4 The Present Value of Common StocksDividends ve

12、rsus Capital GainsValuation of Different Types of StocksZero GrowthConstant GrowthDifferential GrowthMcGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-15Case 1:Zero GrowthAssume that dividends will remain at the same level foreverSince future cash flows are const

13、ant,the value of a zero growth stock is the present value of a perpetuity:McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-16Case 2:Constant GrowthSince future cash flows grow at a constant rate forever,the value of a constant growth stock is the present value o

14、f a growing perpetuity:Assume that dividends will grow at a constant rate,g,forever.i.e.McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-17Case 3:Differential GrowthAssume that dividends will grow at different rates in the foreseeable future and then will grow a

15、t a constant rate thereafter.To value a Differential Growth Stock,we need to:Estimate future dividends in the foreseeable future.Estimate the future stock price when the stock becomes a Constant Growth Stock(case 2).Compute the total present value of the estimated future dividends and future stock p

16、rice at the appropriate discount rate.McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-18Case 3:Differential GrowthAssume that dividends will grow at rate g1 for N years and grow at rate g2 thereafter.McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,Inc.All rights reserved.5-19Case 3:Differential Growth Dividends will grow at rate g1 for N years and grow at rate g2 thereafter 0 1 2NN+1McGraw-Hill/IrwinCopyright 2002 by The McGraw-Hill Companies,I