ch0教材资料9stocksandtheirvaluation(财务管理,英文版).pptVIP

CHAPTER 9Stocks and Their Valuation Features of common stock Determining common stock values Efficient markets Preferred stock Facts about Common Stock Represents ownership. Ownership implies control. Stockholders elect directors. Directors elect management. Management’s goal: Maximize stock price. Social/Ethical Question What’s classified stock? How might classified stock be used? Classified stock has special provisions. Could classify existing stock as founders’ shares, with voting rights but dividend restrictions. New shares might be called “Class A” shares, with voting restrictions but full dividend rights. When is a stock sale an initial public offering (IPO)? A firm “goes public” through an IPO when the stock is first offered to the public. Average Initial Returns on IPOs in Various Countries Different Approaches for Valuing Common Stock Dividend growth model Free cash flow method Using the multiples of comparable firms For a Constant Growth Stock What happens if g ks? If ks g, get negative stock price, which is nonsense. We can’t use model unless (1) ks g and (2) g is expected to be constant forever. Assume beta = 1.2, kRF = 7%, and kM = 12%. What is the required rate of return on the firm’s stock? D0 was $2.00 and g is a constant 6%. Find the expected dividends for the next 3 years, and their PVs. ks = 13%. What’s the stock’s market value? D0 = 2.00, ks = 13%, g = 6%. What is the stock’s market value one year from now, P1? D1 will have been paid, so expected dividends are D2, D3, D4 and so on. Thus, Could also find P1 as follows: Find the expected dividend yield, capital gains yield, and total return during the first year. What would P0 be if g = 0? If we have supernormal growth of 30% for 3 years, then a long-run constant g = 6%, what is P0? k is still 13%. Can no longer use constant growth model. However, growth becomes constant after 3 years. What is the expected dividend yield and capital gains yield at t = 0? At t = 4? During noncons