Chap 7: Bond Valuation
Dạng 1: Dạng thông thường cho hết số liệu
Question:
[Link] are considering a 15-year, $1,000 par value bond. Its coupon rate is 9%, and interest is paid semi-
annually. If you require a rate of 14.2%, how much should you be willing to pay for the bond?
2. If you invest in a 20-year bond. 8% coupon rate semi-annually today but this bond has 12 years to
maturity with YTM equals 15%, find its price you want to buy today?
3. The bonds issued by ABC an 8 percent coupon, payable annually. The bonds mature in 11 years.
Currently, the bonds sell for $952. What is the yield to maturity?
4. Oil Well Supply offers 7.5 percent coupon bonds with semiannual payments and a yield to maturity of
7.68 percent. The bonds mature in 6 years. What is the market price per bond if the face value is $1,000?
5. Yest Corporation's bonds have a 15-year maturity, a 7% semiannual coupon, and a par value of $1,000.
The going interest rate (r.) is 6%, based on semiannual compounding. What is the bond's price?
Dạng 2: Price at year n – n year from now.
Note: Lưu ý Current yield và current YTM
Question:
1.A 5-year, 11% semiannual coupon bond currently sells for $980. If the yield to maturity in the next 3 years
equal its current vield, what will the price be 3 years from now?
2. A 10-year, 12% semiannual coupon bond currently sells for $1,100. If the yield to maturity in the next 6
years equal its current yield, what will the price be 6 years from now?
3. A 20-year, $1,000 par value bond has a 9% annual coupon. The bond currently sells for $925. If the yield
to maturity remains at its current yield now, what will the price be 5 years from now?
4. A 8-year, 7% annual coupon bond currently sells for $800. If the
going rate after 7 years equals its current YTM what will the price be 7 years from
now?
Dạng 3: Hold n year, after n year sell with P= ?... Calculate the price will be willing to pay ?
Note: Có 2 TH xảy ra
TH1: Bài toán cho giá sell luôn. Ví dụ: Hold n year, after n year sell with the price is $A. -> Ở trường hợp
này thì mình biết Pn ( price tại năm thứ n rồi ) thì do đó Pn sẽ là F (face value) để tính Vb0 thay vì là 1000
( vì 1000 là F tại năm đáo hạn chứ k phải F tại năm thứ n ).
TH2: Không cho giá bán tại năm thứ n, thì mình phải đi tính Pn bằng cách tính Vbn ( bond value tại năm thứ
n – tính khá giống dạng 2: n year from now ). Sau khi tính xong Vbn ( Vbn với Pn là như nhau ). Quay trở
lại TH1 làm tương tự.
1. A 10-year, $1,000 par value bond has a 11% annual coupon. The bond currently sells for $975.
a. If the yield to maturity remains at its current rate (=current YTM), what will the price be 6 years
from now?
b. What is the bond price if you just held it in 3 years and sell it with $1,080 at the end of year 3?
2. Bond of Jane Co. and has 15 years to maturity, an 6% annual coupon, and a $1,000 par value. Your
required return on the bond is 10%; if you buy it, you plan to hold it for 5 years. You (and the market) have
expectations that in 5 years, the yield to maturity on a 10-year bond with similar risk will be 9.5%. How
much should you be willing to pay for the bond today?
Chương 9: Stock Valuation
Dạng 1: Zero growth or Preferred Stock –> Lắp cthuc P=D/r
[Link] Corporation issued perpetual preferred stock with an 6% annual dividend. The stock currently yields
7.5%, and its par value is $100. What is the stock's value?
Dạng 2: Nonconstant Cash Flow
Note: Dạng này sẽ thường có 2 dòng constant. Nếu các em đọc nó sẽ hay có kiểu: 2 năm đầu g= A%, sau đó
sẽ giảm hoặc tăng trưởng đều đặn là g=B%.
Cách làm:
Xác định dòng constant đầu tiên là bao nhiêu năm.
Ví dụ: 2 năm sẽ tìm D1, D2 và P2.
3 năm sẽ tìm D1, D2 D3 và P3.
-> n năm sẽ tìm đến Dn và Pn ( Lưu ý chút phải tìm thêm Dn+1 để tính Pn )
Sau khi đủ dữ liệu lắp vào cthuc và tính.
Question:
[Link] has been growing at a rate of 30% per year in recent years. This same growth rate is expected to last
for another 2 years, then decline to gn= 10%. If D0= $1.60 and rs = 14%, what is WW's stock worth today?
2. The Z Company's last dividend was $1.6. The dividend growth rate is expected to be constant at 15% next
year and 10% in the following 2 years, after which dividends are expected to grow at a rate of 5% forever. If
Z's required return (r.) is 14%, what is the company's current stock price?
4. Combined Communications is a new firm in a rapidly growing industry. The company is planning on
increasing its annual dividend by 15 percent a year for the next 4 years and then decreasing the growth rate
to 3.5 percent per year. The company just paid its annual dividend in the amount of $0.20 per share. What is
the current value of one share of this stock if the required rate of return is 15.5 percent? Recalculate if after 4
year, dividend remains constant as dividend in year 4?
5. The Ehrhardt Company's last dividend was $2.00. The dividend growth rate is expected to be constant at
3% for 2 years, after which dividends are expected to grow at a rate of 8% forever. Erhardt's required return
(r.) is 12%. What is Erhardt's current stock price?
Dạng 3. Nonscontant - Hold n year and sell with P= $A
Dạng này làm tương tự công thức dạng 2, chỉ khác là nó cho Pn rồi mình k cần tính nữa.
You invest a stock today and expect its dividend is $3 this year, and increase with a constant rate of 4%, you
plan to hold it in 3 years then sell it with $40. If your require return is 14%. what is the price of stock you
are willing to pay today? Could you calculate capital gain yield during 3 years and current yield in year 3?
Your broker offers to sell you some shares of Mak Co. common stock that paid a dividend of $3 yesterday.
Mak's dividend is expected to grow at 4% per year for the next 4 years. If you buy the stock, you plan to
hold it for 4 years and then sell it for $40. The required return rate is 15%. What is the most you should pay
for it today?
Your broker offers to sell you some shares of ES Co. common stock that paid a dividend of $5 yesterday.
Mak's dividend is expected to grow at 2% per year for the next 5 years. If you buy the stock, you plan to
hold it for 5 years and then sell it for $35. The required return rate is 16%. What is the most you should pay
for it today?
