CF2 Ch 06 Bonds and Their Valuation 公司财务与 及金融 课件.pptVIP

Semiannual Bonds 1. Multiply years by 2 to get periods = 2n. 2. Divide nominal rate by 2 to get periodic rate = rd/2. 3. Divide annual INT by 2 to get PMT = INT/2. 2n rd/2 OK INT/2 OK N I/YR PV PMT FV INPUTS OUTPUT 2(10) 13/2 100/2 20 6.5 50 1000 N I/YR PV PMT FV -834.72 INPUTS OUTPUT Value of 10-year, 10% coupon, semiannual bond if rd = 13%. Spreadsheet Functions for Bond Valuation See Ch 06 Mini Case.xls for details. PRICE YIELD Comparing Investments with Different Compounding Periods You could buy, for $1,000, either a 10%, 10-year, annual payment bond or an equally risky 10%, 10-year semiannual bond. Which would you prefer? See next slide. A 10%, 10-year, Annual Payment Bond vs. 10%, 10-year Semiannual Bond 10.25% 10% EFF% on annual bond, so buy semiannual bond. EFF% = ( 1 + iNom m ) m - 1= 0.10 ( 1 + 2 ) 2 - 1 = 10.25% Semiannual bond, P = $1000.Annual payment bond, P = ? Semiannual bond has rNom = 10%, with EFF% = 10.25%. Should earn same EFF% on annual payment bond, so: INPUTS OUTPUT 10 10.25 100 1000 N I/YR PV PMT FV -984.80 At a price of $984.80, the annual and semiannual bonds would be in equilibrium, because investors would earn EFF% = 10.25% on either bond. Callable Bonds and Yield to Call A 10-year, 10% semiannual coupon,$1,000 par value bond is selling for$1,135.90 with an 8% yield to maturity.It can be called after 5 years at $1,050. 10 -1135.9 50 1050 N I/YR PV PMT FV 3.765 x 2 = 7.53% INPUTS OUTPUT Nominal Yield to Call (YTC) rNom = 7.53% is the rate brokers would quote. Could also calculate EFF% to call: EFF% = (1.03765)2 - 1 = 7.672%. This rate could be compared to monthly mortgages, and so on. * * Chapter 6 Bonds and Their Valuation Key Topics Key features of bonds Bond valuation Measuring yield Assessing risk Key