金融学课件英文chpt09.pptxVIP

1 Chapter 9: Valuation of Common Stocks Copyright © Prentice Hall Inc. 2000. Author: Nick Bagley, bdellaSoft, Inc. Objective Explain equity evaluation using discounting Dividend policy and wealth 2 Chapter 9 Contents 9.1 Reading stock listings 9.2 The discounted dividend model 9.3 Earning and investment opportunity 9.4 A reconsideration of the price multiple approach 9.5 Does dividend policy affect shareholder wealth? 3 Reading Stock Listings 4 Present Value of Dividends 5 Expected Rate of Return The price and dividend next year are expected prices, so The expected rate of return in any period equals the market capitalization rate, k 6 Rate Relationship This relationship tells you that next year’s expected dividend yield + the expected capital gain yield is equal to the required rate of return 7 Price0 Is Discounted Expected (Dividend1 + Price1) Price is the present value of the expected dividend plus the end-of-year price discounted at the required rate of return 8 Ease of Use Recall from chapter 4 that, for a perpetuity, the present value is the real value of the first cash flow divided by the real rate 9 Putting This Together 10 Solving for K 11 G = Capital Gains Yield Comparing prior results: 12 Earning and Investment Opportunity To simplify the analysis, suppose that no new shares are issues, and no taxes Dividends = earnings - net new investment “D = E - I”. The formula for valuing stock is 13 Growth Stock 14 Growth Stock 15 Generalize Let the V = value of the shares without reinvestment G = the growth from new investment R = retention ratio M = wealth multiplier = g/i Wealthg = wealth0*(1-r)/(1-w*r) 16 Reinvestment Under Normal Growth 17 Illustration: Dividends 18 Illustration: Dividend Payment 19 Illustration: Share Repurchase 20 Illustration: Share Repurchase