Day 6-Part 2.1 - Day6:Part2 Chapter7:StockValuation...

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Business Management 301 Day  6: Part 2 Chapter 7: Stock Valuation July 7, 2011
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Day 6: Part 2 Agenda 1) Personal Finance Discussion Topics 2) Midterm Review? 3) Chapter 7: Stock Valuation Discussion
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Financial Pages: Corporate Bonds Cur                 Net Bonds                         Yld        Vol    Close             Chg Eckerd  9 1 / 4      15       8.6        20       107  1 / 2       ... What is Eckerd’s yield to maturity (today=2011)? P/YR: 1  FV: 1000 PV: -$1,075  [107.5% x 1000 or 1.075 x 1000 = 1075] N: 8  [2015-2011 = 4; 4 yrs x 2 pmts/yr = 8] PMT: 46.25   [(0.0925 x 1000)/2 = 46.25]  I/YR: ?   7.06%        [3.5324 x 2 = 7.06%] Note:  You are using a factor  of TWO for the semiannual  payments so you  must  double the I/Yr to find YTM! Current Yield:   Annual Coupon/Current Price 92.50/1075=0.086 CY = 8.6%
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Financial Pages: Corporate Bonds Cur           Net  Bonds                              Yld         Vol       Close      Chg AlldC  zr    20  ...         30      43  5 / 8 +2 What is Allied Chemical’s yield to maturity (Today = 2011)? P/YR: 1 N: 9     [2020 – 2011 = 9] FV: 1000 PV: -$436.25      [5/8 = 0.625; 43.625% x 1000 or 0.43625 x 1000 = 436.25] PMT: 0   [zr is abbreviation for ZERO coupon] I/YR: ?   9.655%
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Financial Pages: Treasury Bonds   Maturity  Ask Rate    Mo/Yr      Bid        Asked     Chg  Yld     9   Nov  29 128:18    128:24       +13            6.43 What is the yield to maturity of this Treasury bond?  (Note:  T-bonds are traded in 32nds, Today is 2011.)
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