Fundamentals of Corporate Finance Phần 5 ppt

[...]... 2098 51 352 10 681 12 54 88 23 11097 394 dd 297 25 359 98 56 456 8 76 39 3 050 7 1637 58 146 cc 4 250 dd 219 99 40 92866 dd 320 31 3 256 6 dd 4968 129 Hi 121/2 369/16 26 15/ 16 291/4 51 5/16 187/16 51 /16 39/16 343/8 697/8 413/16 27 71/8 141/16 321/16 163/4 11 /16 471/8 3 35/ 16 45/ 16 487/8 51 9/16 203/16 Lo 127/16 341/16 261/2 281/8 51 /2 17 43/4 35/ 16 333/16 641/2 41/2 253 /4 65/ 8 137/8 313/4 161/4 5 /8 451 /2... NEW YORK STOCK EXCHANGE COMPOSITE TRANSACTIONS 52 Weeks Hi Lo Stock 151 /8 111/4 MuniHldgCA II 7 7 49 /16 29 /8 Pentair 2 95/ 8 1 25/ 8 PentonMedia 39 15/ 16 281/2 ࡔPeopEngy 2 15/ 8 51 /2 PepBoys n 251 /4 151 /2 PepsiBttlng 111/16 41/2 PepsiGem GDR 61/16 33/16 PepsiAM B 411/2 301/8 PepsiCo 841/2 251 /2 PerkinElmer 61/8 33/4 PermRltyTr 437/16 155 /16 PerotSys A 131/2 4 15/ 16 PrsnlGpAm 173/8 103/8 PetroCnda g 367/8 281/4... PetsecEngy 51 1/4 23 PfeiffrVac s 50 11/ 256 30 Pfizer 11 5 8 /16 3 /8 PharmRes 3 3 66 /8 42 /4 PharmUpjhn 73 451 1/16 PhelpDodg n 259 /16 193/4 PhilAuthInd Sym MUC PNR PME PGL PBY PBG GEM PAS PEP PKI PBT PER PGA PCZ PEO PGO PSJ PV PFE PRX PNU PD POB Yld Div % 82e 6.6 64 1.8 12 5 2.00f 7.0 27 4.6 08 5 j j 54 1.6 56 9 47e10.4 40g 2.20 6.9 30e 6 36f 1.1 1.00 2.1 2.00 4.1 1.64 8.1 Vol PE 100s 45 15 2098 51 ... interest rate of 5. 6 percent at the end of the year, the value of the bond will be PV = $60 $1,060 + = $1,007.37 (1. 056 ) (1. 056 )2 At the end of the year you receive a coupon payment of $60 and have a bond worth $1,007.37, slightly less than you paid for it Your total profit is $60 + ($1,007.37 – $1,010.77) = $56 .60 The return on your investment is therefore $56 .60/$1,010.77 = 056 , or 5. 6 percent, just... $1,007.37) = 056 , or 5. 6% $1,007.37 6 At an interest rate of 5. 6 percent, the 3-year bond sells for $1,010.77 If the interest rate jumps to 10 percent, the bond price falls to $900 .53 , a decline of 10.9 percent The 30-year bond sells for $1, 057 .50 when the interest rate is 5. 6 percent, but its price falls to $622.92 at an interest rate of 10 percent, a much larger percentage decline of 41.1 percent... coupons of 8 percent, or a 30-year zero coupon bond? Can you explain intuitively why the zero exhibits greater interest rate risk even though it has the same maturity as the coupon bond? 1 a b c d The ask price is 101 23/32 = 101.718 75 percent of face value, or $1,017.18 75 The bid price is 101 21/32 = 101. 656 25 percent of face value, or $1,016 .56 25 The price increased by 1/32 = 031 25 percent of face... payments themselves Price $1,200 $1, 150 $1,100 Bond price FIGURE 3.4 The value of the 6 percent bond is lower at higher discount rates The yield to maturity is the discount rate at which price equals present value of cash flows $1, 050 Price = $1,010.77 $1,000 $ 950 $900 $ 850 Yield to maturity = 5. 6% $800 0 2% 4% 6% Interest rate 8% 10% 12% Valuing Bonds 2 65 RATE OF RETURN RATE OF RETURN Total income per period... McDonald’s Microsoft Pfizer Walt Disney 2 85 Stock Price Book Value per Share Ratio: Price/Book Value 77.31 42.88 51 .44 42.00 85. 00 34. 75 29.19 5. 41 26.80 23.38 6.77 4.91 2.20 10.06 14.3 1.6 2.2 6.2 17.3 15. 8 2.9 Source: http:/ /finance. yahoo.com them but would be difficult to sell intact to other firms Take Pfizer, a pharmaceutical company As you can see from Table 3.3, it sells at about 15. 8 times book... one of the best performing stocks was Amazon.com Its price at the end of the year was $321. 25, up from $30.1 25 at the beginning of the year Since the stock did not pay a dividend during the year, investors earned an actual return of ($0 + $321. 25 – $30.1 25) /$321. 25 = 9.66, or 966 percent This figure was almost certainly well in excess of investor expectations At the other extreme, the modem maker Hayes,... maturity of 30 years, and a yield to maturity of 8 percent What rate of return will be earned by an investor who purchases the bond and holds it for 1 year if the bond’s yield to maturity at the end of the year is 9 percent? 24 Bond Risk A bond’s credit rating provides a guide to its risk Long-term bonds rated Aa currently offer yields to maturity of 8 .5 percent A-rated bonds sell at yields of 8.8 percent . 1 -2 4.98 5. 20 4. 75 4. 45 4 .52 4 .50 5. 46 5. 48 5. 49 5. 50 5. 50 5. 49 5. 50 5. 51 5. 53 5. 51 5. 54 5. 51 5. 52 5. 53 5. 54 5. 54 5. 50 5 7 /8 6 7 /8 6 8 5 7 /8 6 7 /8 5 6 1 /4 5 5 /8 8 3 1 /8 5 1 /4 6 1 /2 5 3 /4 6 5 /8 6 5 /8 7 7 /8 3 3 /8 6 1 /2 6 3 /8 6 1 /4 7 1 /2 15 3 /4 Mo/Yr Maturity Bid. 3 + 4 . . . . 5. 53 5. 56 5. 57 5. 55 5 .57 5. 59 5. 59 5. 60 5. 59 5. 60 3.96 5. 61 5. 64 5. 64 5. 62 5. 62 5. 71 5. 85 4.02 5. 82 5. 84 5. 90 5. 81 5. 91 5 7 /8 6 1 /8 6 1 /4 14 1 /4 6 1 /4 6 5 /8 6 5 /8 7 1 /2 6 1 /2 6 1 /4 3 5 /8 6 6 3 /8 6 1 /4 5 7 /8 5 3 /4 11 5 /8 7 7 /8 3 5 /8 5 1 /2 5 5 /8 8 3 /8 4 3 /4 8 3 /4 Mo/Yr Maturity Bid. . 5. 53 5. 56 5. 57 5. 55 5 .57 5. 59 5. 59 5. 60 5. 59 5. 60 3.96 5. 61 5. 64 5. 64 5. 62 5. 62 5. 71 5. 85 4.02 5. 82 5. 84 5. 90 5. 81 5. 91 5 7 /8 6 1 /8 6 1 /4 14 1 /4 6 1 /4 6 5 /8 6 5 /8 7 1 /2 6 1 /2 6 1 /4 3 5 /8 6 6 3 /8 6 1 /4 5 7 /8 5 3 /4 11 5 /8 7 7 /8 3 5 /8 5 1 /2 5 5 /8 8 3 /8 4 3 /4 8 3 /4 Mo/Yr Maturity Bid Asked Chg. Ask Yld.Rate FIGURE