Chapter 5 - Valuation and Characteristics of Bonds课件.pptVIP

Chapter 5 - Valuation and Characteristics of Bonds;Characteristics of Bonds;Characteristics of Bonds;Example: ATT 6 ? 32;Example: ATT 6 ? 32;Types of Bonds;Types of Bonds;Types of Bonds;Types of Bonds;The Bond Indenture;Value;Security Valuation;Valuation;Bond Valuation;Bond Valuation;Bond Valuation;;Bond Example; 0 1 2 3 . . . 20;Bond Example;Bond Example;Bond Example;Suppose interest rates fall immediately after we issue the bonds. The required return on bonds of similar risk drops to 10%. What would happen to the bond’s intrinsic value?;P/YR = 1 Mode = end N = 20 I%YR = 10 PMT = 120 FV = 1000 Solve PV = -$1,170.27 ;P/YR = 1 Mode = end N = 20 I%YR = 10 PMT = 120 FV = 1000 Solve PV = -$1,170.27 ;Bond Example;Bond Example;Bond Example;Suppose interest rates rise immediately after we issue the bonds. The required return on bonds of similar risk rises to 14%. What would happen to the bond’s intrinsic value?;P/YR = 1 Mode = end N = 20 I%YR = 14 PMT = 120 FV = 1000 Solve PV = -$867.54 ;P/YR = 1 Mode = end N = 20 I%YR = 14 PMT = 120 FV = 1000 Solve PV = -$867.54 ;Bond Example;Bond Example;Bond Example;Suppose coupons are semi-annual;Bond Example;Bond Example;Bond Example;Yield To Maturity;Yield To Maturity;YTM Example;P/YR = 2 Mode = end N = 16 PV = -898.90 PMT = 50 FV = 1000 Solve I%YR = 12% ;Bond Example;Bond Example;Bond Example;Bond Example;Zero Coupon Bonds;Zero Example;Zero Example;Zero Example;Mathematical Solution: PV = FV (PVIF i, n ) 508 = 1000 (PVIF i, 10 ) .508 = (PVIF i, 10 ) [use PVIF table] PV = FV /(1 + i) 10 508 = 1000 /(1