chap005 - Chapter 5 HOW TO VALUE BONDS AND STOCKS SLIDES...

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Chapter 5 HOW TO VALUE BONDS AND STOCKS SLIDES
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A-70 CHAPTER 5 5.1 Key Concepts and Skills 5.2 Chapter Outline 5.3 Definition of a Bond 5.4 How to Value Bonds 5.5 The Bond Pricing Equation 5.6 Pure Discount Bonds 5.7 Pure Discount Bonds 5.8 Pure Discount Bond: Example 5.9 Level Coupon Bonds 5.10 Level Coupon Bond: Example 5.11 Level Coupon Bond: Example 5.12 Bond Example: Calculator 5.13 Bond Pricing with a Spreadsheet 5.14 Consols 5.15 Bond Concepts 5.16 YTM and Bond Value 5.17 Bond Example Revisited 5.18 Computing Yield to Maturity 5.19 YTM with Annual Coupons 5.20 YTM with Semiannual Coupons 5.21 Bond Market Reporting 5.22 Treasury Quotations 5.23 The Present Value of Common Stocks 5.24 Case 1: Zero Growth 5.25 Case 2: Constant Growth 5.26 Constant Growth Example 5.27 Case 3: Differential Growth 5.28 Case 3: Differential Growth 5.29 Case 3: Differential Growth 5.30 Case 3: Differential Growth 5.31 Case 3: Differential Growth 5.32 A Differential Growth Example 5.33 With the Formula 5.34 With Cash Flows 5.35 Estimates of Parameters 5.36 Where does R come from? 5.37 Using the DGM to Find R 5.38 Growth Opportunities 5.39 The Dividend Growth Model and the NPVGO Model 5.40 The NPVGO Model: Example
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CHAPTER 5 A-71 SLIDES - CONTINUED CHAPTER WEB SITES Section Web Address 5.3 www.nasd.com www.stls.frb.org/fred/files 5.9 finance.yahoo.com End-of-chapter material www.mhhe.com/edumarketinsight CHAPTER ORGANIZATION 5.1 Definition and Example of a Bond 5.2 How to Value Bonds Pure Discount Bonds Level Coupon Bonds Consols 5.3 Bond Concepts Interest Rates and Bond Prices Yield to Maturity Bond Market Reporting 5.4 The Present Value of Common Stocks Dividends versus Capital Gains Valuation of Different Types of Stocks 5.5 Estimates of Parameters in the Dividend-Discount Model Where Does g Come From? Where Does R Come From? A Healthy Sense of Skepticism 5.6 Growth Opportunities Growth in Earnings and Dividends versus Growth Opportunities Dividends or Earnings: Which to Discount The No-Dividend Firm 5.41 The NPVGO Model: Example 5.42 Price-Earnings Ratio 5.43 Stock Market Reporting 5.44 Quick Quiz
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A-72 CHAPTER 5 5.7 The Dividend Growth Model and the NPVGO Model The Dividend Growth Model The NPVGO Model Summation 5.8 Price-Earnings Ratio 5.9 Stock Market Reporting ANNOTATED CHAPTER OUTLINE Slide 5.0 Chapter 5 Title Slide Slide 5.1 Key Concepts and Skills Slide 5.2 Chapter Outline 5.1. Definition and Example of a Bond Slide 5.3 Definition of a Bond Bonds – long-term IOU’s, usually interest-only loans (interest is paid by the borrower every period with the principal repaid at the end of the loan) Coupons – the regular interest payments (if fixed amount – level coupon) Face or par value – principal, amount repaid at the end of the loan Coupon rate – coupon quoted as a percent of face value, typically paid in semiannual installments Maturity – time until face value is paid, usually given in years Yield to maturity (YTM) – the required market rate or rate that makes the
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This note was uploaded on 12/21/2011 for the course NIKA 101 taught by Professor Temur during the Spring '11 term at Acton School of Business.

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chap005 - Chapter 5 HOW TO VALUE BONDS AND STOCKS SLIDES...

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