Chap004-bondstock valuation.pptVIP

Chapter Outline 4.1 Definition and Example of a Bond 4.2 How to Value Bonds 4.3 Bond Concepts 4.4 The Present Value of Common Stocks 4.5 Estimates of Parameters in the Dividend-Discount Model 4.6 Growth Opportunities 4.7 The Dividend Growth Model and the NPVGO Model (Advanced) 4.8 Price Earnings Ratio 4.9 Stock Market Reporting 4.10 Summary and Conclusions 4.1 Definition and Example of a Bond A bond is a legally binding agreement between 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 b