第六章 债券与股票估价.pptVIP

Bond Definitions Bond Par value (face value)（面值） Coupon rate（票面利率） Coupon payment （票面利息） Maturity date（到期期限） Yield or Yield to maturity（到期收益率） Chapter Outline Bonds and Bond Valuation More on Bond Features Common Stock Valuation Some Features of Common and Preferred Stocks 1. Bond Pricing Present Value of Cash Flows as Rates Change Bond Value = PV of coupons + PV of par Bond Value = PV annuity + PV of lump sum Remember, as interest rates increase present values decrease So, as interest rates increase, bond prices decrease and vice versa When Bond Value = PV of coupons + PV of par Valuing a Discount Bond with Annual Coupons Consider a bond with a coupon rate of 10% and annual coupons. The par value is $1000 and the bond has 5 years to maturity. The yield to maturity is 11%. What is the value of the bond? Using the formula: B = PV of annuity + PV of lump sum B = 100[1 – 1/(1.11)5] / .11 + 1000 / (1.11)5 B = 369.59 + 593.45 = 963.04 Valuing a Premium Bond with Annual Coupons Suppose you are looking at a bond that has a 10% annual coupon and a face value of $1000. There are 20 years to maturity and the yield to maturity is 8%. What is the price of this bond? Using the formula: B = PV of annuity + PV of lump sum B = 100[1 – 1/(1.08)20] / .08 + 1000 / (1.08)20 B = 981.81 + 214.55 = 1196.36 Graphical Relationship Between Price and Yield-to-maturity Bond Prices: Relationship Between Coupon and Yield If YTM = coupon rate, then par value = bond price If YTM coupon rate, then par value bond price Why? Selling at a discount, called a discount bond If YTM coupon rate, then par value bond price Why? Selling at a premium, called a premium bond The Bond-Pricing Equation 2. Question from Bond Feature If there is no payment risk Is there any other risk? Interest Rate Risk Given other conditions: Long-term bonds have more price risk than short-term bonds Low coupon rate bonds have more price risk than high coupon rate bonds Figure 7.2 P197 3. Computing Yield-to-maturity