公司理財(cái)-第6章課件

1、公司理財(cái)-第6章,Stock Valuation,Chapter 6,公司理財(cái)-第6章,Key Concepts and Skills,Understand how stock prices depend on future dividends and dividend growth Be able to compute stock prices using the dividend growth model Understand how growth opportunities affect stock values Understand the PE ratio Understand ho

2、w stock markets work,公司理財(cái)-第6章,Chapter Outline,6.1The Present Value of Common Stocks 6.2Estimates of Parameters in the Dividend-Discount Model 6.3Growth Opportunities 6.4The Dividend Growth Model and the NPVGO Model 6.5Price-Earnings Ratio 6.6Some Features of Common and Preferred Stock 6.7The Stock M

3、arkets,公司理財(cái)-第6章,6.1 The PV of Common Stocks,The value of any asset is the present value of its expected future cash flows. Stock ownership produces cash flows from: Dividends Capital Gains Valuation of Different Types of Stocks Zero Growth Constant Growth Differential Growth,公司理財(cái)-第6章,Case 1: Zero Gr

4、owth,Assume that dividends will remain at the same level forever,Since future cash flows are constant, the value of a zero growth stock is the present value of a perpetuity:,公司理財(cái)-第6章,Case 2: Constant Growth,Since future cash flows grow at a constant rate forever, the value of a constant growth stock

5、 is the present value of a growing perpetuity:,Assume that dividends will grow at a constant rate, g, forever, i.e.,公司理財(cái)-第6章,Constant Growth Example,Suppose Big D, Inc., just paid a dividend of $.50. It is expected to increase its dividend by 2% per year. If the market requires a return of 15% on as

6、sets of this risk level, how much should the stock be selling for? P0 = .50(1+.02) / (.15 - .02) = $3.92,公司理財(cái)-第6章,Case 3: Differential Growth,Assume that dividends will grow at different rates in the foreseeable future and then will grow at a constant rate thereafter. To value a Differential Growth

7、Stock, we need to: Estimate future dividends in the foreseeable future. Estimate the future stock price when the stock becomes a Constant Growth Stock (case 2). Compute the total present value of the estimated future dividends and future stock price at the appropriate discount rate.,公司理財(cái)-第6章,Case 3:

8、 Differential Growth,Assume that dividends will grow at rate g1 for N years and grow at rate g2 thereafter.,.,.,.,.,.,.,公司理財(cái)-第6章,Case 3: Differential Growth,Dividends will grow at rate g1 for N years and grow at rate g2 thereafter,0 1 2,NN+1,公司理財(cái)-第6章,Case 3: Differential Growth,We can value this as

9、the sum of: an N-year annuity growing at rate g1,plus the discounted value of a perpetuity growing at rate g2 that starts in year N+1,公司理財(cái)-第6章,Case 3: Differential Growth,Consolidating gives:,Or, we can “cash flow” it out.,公司理財(cái)-第6章,A Differential Growth Example,A common stock just paid a dividend of

10、 $2. The dividend is expected to grow at 8% for 3 years, then it will grow at 4% in perpetuity. What is the stock worth? The discount rate is 12%.,公司理財(cái)-第6章,With the Formula,公司理財(cái)-第6章,With Cash Flows,0 1 234,0 1 2 3,The constant growth phase beginning in year 4 can be valued as a growing perpetuity at

11、 time 3.,公司理財(cái)-第6章,6.2 Estimates of Parameters,The value of a firm depends upon its growth rate, g, and its discount rate, R. Where does g come from? g = Retention ratio Return on retained earnings,公司理財(cái)-第6章,Where does R come from?,The discount rate can be broken into two parts. The dividend yield The

12、 growth rate (in dividends) In practice, there is a great deal of estimation error involved in estimating R.,公司理財(cái)-第6章,Using the DGM to Find R,Start with the DGM:,Rearrange and solve for R:,公司理財(cái)-第6章,6.3Growth Opportunities,Growth opportunities are opportunities to invest in positive NPV projects. The

13、 value of a firm can be conceptualized as the sum of the value of a firm that pays out 100-percent of its earnings as dividends and the net present value of the growth opportunities.,公司理財(cái)-第6章,6.4The NPVGO Model,We have two ways to value a stock: The dividend discount model The sum of its price as a

14、“cash cow” plus the per share value of its growth opportunities,公司理財(cái)-第6章,The NPVGO Model: Example,Consider a firm that has EPS of $5 at the end of the first year, a dividend-payout ratio of 30%, a discount rate of 16%, and a return on retained earnings of 20%. The dividend at year one will be $5 .30

15、 = $1.50 per share. The retention ratio is .70 ( = 1 -.30), implying a growth rate in dividends of 14% = .70 20%. From the dividend growth model, the price of a share is:,公司理財(cái)-第6章,The NPVGO Model: Example,First, we must calculate the value of the firm as a cash cow.,Second, we must calculate the val

16、ue of the growth opportunities.,Finally,公司理財(cái)-第6章,6.5Price-Earnings Ratio,Many analysts frequently relate earnings per share to price. The price-earnings ratio is calculated as the current stock price divided by annual EPS. The Wall Street Journal uses last 4 quarters earnings,公司理財(cái)-第6章,6.6 Features o

17、f Common Stock,Voting rights (Cumulative vs. Straight) Proxy voting Classes of stock Other rights Share proportionally in declared dividends Share proportionally in remaining assets during liquidation Preemptive right first shot at new stock issue to maintain proportional ownership if desired,公司理財(cái)-第

18、6章,Features of Preferred Stock,Dividends Stated dividend must be paid before dividends can be paid to common stockholders. Dividends are not a liability of the firm, and preferred dividends can be deferred indefinitely. Most preferred dividends are cumulative any missed preferred dividends have to b

19、e paid before common dividends can be paid. Preferred stock generally does not carry voting rights.,公司理財(cái)-第6章,6.7 The Stock Markets,Dealers vs. Brokers New York Stock Exchange (NYSE) Largest stock market in the world Members Own seats on the exchange Commission brokers Specialists Floor brokers Floor traders Operations Floor activity,公司理