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Interest Rates and Bond Valuation
Interest Rates and Bond Valuation Bond Par value (face value) Coupon rate fixed rate floating rate zero coupon Coupon payment Maturity date Yield or Yield to maturity indenture call provision sinkin.. [Get PPT] http://www.rhsmith.umd.edu/faculty/elindakiss/BMGT440ch07.ppt pages: 78 size: 1.4MB md5: 4b3a50b4b132a69ac8e727f078f7a4e8 

Know the important bond features and bond types
.. to maturity is 8%. What is the price of this bond? B = 100[1 1/(1.08) 20 ] / .08 + 1000 / (1.08) B = 981.81 + 214.55 = 1196.36 N = 20; I/Y = 8; PMT = 100; FV = 1000 CPT PV = 1,196.36 If YTM = co.. [Get PPT] http://users.ipfw.edu/sharmam/f301/ch7/Chapter007_2nd.ppt pages: 46 size: 2.1MB md5: 1526c434bd570feb9cfa2c083b044d40 

Which of the following statements concerning bonds is  ..
.. coupon rate current yield YTM. Current yield is the ratio of annual coupon divided by the current market price. When coupon rate is higher than the market rate, bond is at premium and when the ma.. [Get PPT] http://foba.lakeheadu.ca/hartviksen/5071/Chapter%206%20Solutions.ppt pages: 32 size: 2.0MB md5: 37f33ddd6d1ec51e17a220397d24fa81 

Interest Rates and Bond Valuation
.. bond price Why? Higher coupon rate causes value above par Price above par value, called a premium bond The Bond Pricing Equation This formalizes the calculations we have been doing. Example 7.1 F.. [Get PPT] http://info.psu.edu.sa/psu/fnm/engkungah/301_Fund_Chapter007.ppt pages: 45 size: 1.9MB md5: a53174b505ddf4775a21fe004b2789ca 

Key Concepts and Skills
.. say that they would pay more for the new bond. Since it is priced to sell at $1,000, the 8% bond must sell for less than $1,000. The same logic works if the new bond has a yield and coupon less t.. [Get PPT] http://www.cwu.edu/%7Eyoungm/FIN%20470/Classroom%20PowerPoint/Chapter%207.ppt pages: 37 size: 1.3MB md5: 74d14d3afc77e36fd28411f92a74b957 

Bonds, Bond Valuation, and Interest Rates
.. 10year, 9% annual coupon, $1,000 par value bond selling for $887 Find r If coupon rate r bond sells at a discount. If coupon rate = r bond sells at its par value. bond sells at a premium. If r r.. [Get PPT] http://83.143.248.39/faculty/mmateev/Corporate%20Finance%20BUS%20306/docs/Chapter%205_Slid e.ppt(1).ppt pages: n/a size: 594KB md5: 5a118799a0bc3d1245d3e4b1febe7143 

Interest Rates and Bond Valuation
.. Varying degrees of default risk, rated similar to corporate debt Interest received is taxexempt at the federal level What company are we looking at? What is the coupon rate? If the bond has a $1.. [Get PPT] http://www.utdallas.edu/~nina.baranchuk/BA3341/lectures/Lecture6.ppt pages: 25 size: 2.1MB md5: d52d88210d209c01d109b0552d973a6c 

Interest Rates Bond Valuation
.. Use One Bond YTM To Find Price Of Another Bond: Example 8 Bonds and Stocks Like stock, bonds bring capital (money) into the corporation so that it can invest in profitable projects Bondholders ar.. [Get PPT] http://flightline.highline.edu/mgirvin/AllClasses/233/233classnotes/ch06/ch6.ppt pages: n/a size: 2.4MB md5: ca90b2eebe68fccf7648f9827d895160 

Interest Rates Bond Valuation
..  An obligor rated 'A' has STRONG capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than oblig.. [Get PPT] http://classes.uleth.ca/200601/mgt3040c/PowerPoint%20Slides/Chap007.ppt pages: n/a size: 615KB md5: b84791f3a310f25912aa1eb2d04090d5 

Learning Goals (cont'd)
.. True yield received if the bond is held to maturity Assumes all interest income is reinvested at rate equal to market rate at time of YTM calculation no reinvestment risk Calculates value based u.. [Get PPT] http://muse.widener.edu/sba/FacultyWebpages/Mansur/FIN%20305/BOND%20VALUATION_ch11.ppt pages: n/a size: 2.0MB md5: d41fc96225f347a327516e64340a10fa 

BA 580 Interest Rates
.. coupon payment of 5 % 100 = 5/(1+r) + 100/(1+r) = (105)/(1+r); r = 0.05 = 5% If P = 95, then r = 10.5% So does P falling cause r to rise or vise versa? Neither, BUT A COMMON MISCOMMUNICATION IN M.. [Get PPT] http://www.wku.edu/~brian.goff/iratesclass1.ppt pages: n/a size: 130KB md5: 94c6f122e8278c7ec534290a1338e6e7 

Bond valuation Zero coupon bond valuation and to interest ..
.. value today (V ) is the PV of all future forecasted dividends. The timeline and TVM valuation equation always resembles the following. Intrinsic values are usually privately obtained estimates of.. [Get PPT] http://www.rdboehme.com/MBA_CF/Chapter05_emba.ppt pages: 43 size: 278KB md5: 9f5f58501fdab3978313877628778cfd 

Stock & Bond Valuation
.. Long yields > short yields Can be flat or even inverted during times of financial stress Stock Valuation: Preferred Stock PS D $2.30 = $20.90 / share p 0.11 Common Stock 1 + D (1+r) Basic formula.. [Get PPT] http://academic.cengage.com/resource_uploads/downloads/0324322321_68873.ppt pages: 42 size: 1.6MB md5: 411f6a0208fd7364e19408f4ff83cb7e 

Discounted Cash Flow Valuation: The Inputs
.. equation. If you set the beta of debt be d instead of zero, you will get the second equation. The first equation assumes that debt carries no market risk and works reasonably well for investment .. [Get PPT] http://www.ecofo.unibo.it/NR/rdonlyres/878D566BFB86457CBC5C6C433A29AA27/0/Lezione_cap3 .ppt pages: 29 size: 173KB md5: 013a36115f02f809056a95ae0447b7d6 

Estimating Discount Rates
.. with debt betas increasing as the rating falls. Three measurement issues come up: How broadly or narrowly do we define comparable firms? We would argue for a broader rather than a narrow definiti.. [Get PPT] http://www.stern.nyu.edu/~adamodar/pptfiles/dam2ed/discountrates.ppt pages: 60 size: 810KB md5: 29b39c6409214835d9c893606fc79917 

Understanding the Concept of Present Value $1.10
Understanding the Concept of Present Value $1.10 $1.21 $1.33 $1(1 + i) n i 2 3 FV/(1 + ) = PV An increase in the interest rate causes present value to fall. A decrease in the interest rate causes pr.. [Get PPT] http://ksuweb.kennesaw.edu/~mbumgarn/Present%20Value%20and%20the%20Bond%20Market%20Model.p pt pages: 61 size: 229KB md5: 269e62a7640748537ed0e84731e972fc 

Money & Banking Rate
Money & Banking Rate Maturity Mo/Yr Bid Asked Chg Yield 13 1/4 May 15 143:01 143:02 +14 3.22 Suppose I need a 4% rate of return. How much would I be willing to pay for $1 million of face value of th.. [Get PPT] http://home.manhattan.edu/~fiona.maclachlan/ppt/mbs06/mbwk4s06.ppt pages: 25 size: 893KB md5: e5f10235c794b0cc46f1c069d6a7c9e9 

BA 580Interest Rates  Breaking Down Market Influences on ..
.. is closely intertwined with risk, it is a key reason that rates differ Time & Rate Differences R(short) = R(long) + cost differences What costs/risks differ or may differ depending on length of t.. [Get PPT] http://www.wku.edu/~brian.goff/iratesclass2.ppt pages: 12 size: 199KB md5: ba4feaab0d620b2b1e421e3caa99fbcd 

Money & Banking No statute defines  or ever has defined  ..
.. abrogated contracts in which payment was specified in gold.  Michael Bordo in the Concise Encyclopedia of Economics Advantages Inflationary finance is impossible. Economic stability and less go.. [Get PPT] http://home.manhattan.edu/~fiona.maclachlan/ppt/m&bs05/mbpptwk3.ppt pages: 30 size: 619KB md5: b31ae90b2f832450745bfc725e4f3d2a 

Bonds and Their Valuation
.. a bond sells at a premium, then (1) coupon rate r so (2) a call is more likely. So, expect to earn: YTC on premium bonds. YTM on par & discount bonds. Sinking Fund Provision to pay off a loan ove.. [Get PPT] http://business.illinois.edu/~mdyer/sp07/chap07.ppt pages: n/a size: 1.0MB md5: 3d8f0daf4afd681d5f1954b13f03d93d 

Issues in Valuation DCF Method and Forecasting
.. pricesales multiple is available even for the most troubled firms. Unlike earnings and book value, which are heavily influenced by accounting decisions on depreciation, inventory and extraordina.. [Get PPT] http://som.yale.edu/~spiegel/mgt541/Lectures/IssuesinValuation.ppt pages: 32 size: 324KB md5: 2729b68f5d8413aa1a6845f5a9c380f4 