商業(yè)財務(wù)學(xué)英文版教學(xué)課件：Chap006 Stock Valuation

StockValuationChapter6Copyright?2011byTheMcGraw-HillCompanies,Inc.Allrightsreserved.McGraw-Hill/IrwinComprehendthatstockpricesdependonfuturedividendsanddividendgrowthComputestockpricesusingthedividendgrowthmodelUnderstandhowgrowthopportunitiesaffectstockvaluesAppreciatethePEratioKnowhowstockmarketsworkKeyConceptsandSkills6.1ThePresentValueofCommonStocks6.2EstimatesofParametersintheDividendDiscountModel6.3 GrowthOpportunities6.4 Price-EarningsRatio6.5 SomeFeaturesofCommonandPreferred Stock6.6 TheStockMarketsChapterOutlineThevalueofanyassetisthepresentvalueofitsexpectedfuturecashflows.Stockownershipproducescashflowsfrom:DividendsCapitalGainsValuationofDifferentTypesofStocksZeroGrowthConstantGrowthDifferentialGrowth6.1ThePVofCommonStocksAssumethatdividendswillremainatthesamelevelforeverCase1:ZeroGrowthSincefuturecashflowsareconstant,thevalueofazerogrowthstockisthepresentvalueofaperpetuity:SupposeBigDealCompanywillpayanannualdividendof$2.00percommonsharethatwillneverincreaseordecrease.Themarketrateofreturnis8.5%.WhatisthemaximumamountyoushouldbewillingpayforacommonshareofBigDealCorporation?FormulaforZeroGrowthModel:P=Div/RSolution:P=$2.00/.085 P=$23.53ZeroGrowthExampleCase2:ConstantGrowthSincefuturecashflowsgrowataconstantrateforever,thevalueofaconstantgrowthstockisthepresentvalueofagrowingperpetuity:Assumethatdividendswillgrowataconstantrate,g,forever,i.e.,...SupposeBigD,Inc.,justpaidadividendof$.50.Itisexpectedtoincreaseitsdividendby2%peryear.Ifthemarketrequiresareturnof15%onassetsofthisrisklevel,howmuchshouldthestockbesellingfor?P0=.50(1+.02)/(.15-.02)=$3.92ConstantGrowthExampleItiscriticaltounderstandthatintheconstantgrowthmodelcalculationsarebasedonthenextdividendIfasituationonlyprovidesinformationonthelastdividenditmustbeincreasedbythegrowthratetoarriveatthenextdividendIfasituationprovidesthevalueofthenextdividend,thenthedatanecessaryforthecalculationisknownandneednotbederived.AnanalystmustdiscriminatewhethertheyhaveinformationaboutthenextorlastdividendandproceedwithcalculationaccordinglyAWordAboutDividendsintheConstantGrowthModelAssumethatdividendswillgrowatdifferentratesintheforeseeablefutureandthenwillgrowataconstantratethereafter.TovalueaDifferentialGrowthStock,weneedto:Estimatefuturedividendsintheforeseeablefuture.EstimatethefuturestockpricewhenthestockbecomesaConstantGrowthStock(case2).Computethetotalpresentvalueoftheestimatedfuturedividendsandfuturestockpriceattheappropriatediscountrate.Case3:DifferentialGrowthThisgraphdemonstratesthedividendprofileforacompanywithdifferentialgrowthGraphic:DifferentialDividendGrowthCase3:DifferentialGrowthAssumethatdividendswillgrowatrateg1forNyearsandgrowatrateg2thereafter.......Case3:DifferentialGrowthDividendswillgrowatrateg1forNyearsandgrowatrateg2thereafter…0 1 2 …N N+1 …Case3:DifferentialGrowthWecanvaluethisasthesumof:aT-yearannuitygrowingatrateg1plusthediscountedvalueofaperpetuitygrowingatrateg2thatstartsinyearT+1Case3:DifferentialGrowthConsolidatinggives:Or,wecan“cashflow”itout.Acommonstockjustpaidadividendof$2.Thedividendisexpectedtogrowat8%for3years,thenitwillgrowat4%inperpetuity.Whatisthestockworth?Thediscountrateis12%.ADifferentialGrowthExampleWiththeFormulaWithCashFlows…0 1 2 3 40 1 2 3 Theconstantgrowthphasebeginninginyear4canbevaluedasagrowingperpetuityattime3.Thevalueofafirmdependsuponitsgrowthrate,g,anditsdiscountrate,R.Wheredoesgcomefrom? g=Retentionratio×ReturnonretainedearningsExample:Supposeacompanyhasaretentionratioof70%andearnsanROEof12%.WhatistheGrowthRate,g?g=.70X.12g=.084=8.4%

6.2EstimatesofParametersThediscountratecanbebrokenintotwoparts.ThedividendyieldThegrowthrate(individends)AKA:CapitalGainsYieldInpractice,thereisagreatdealofestimationerrorinvolvedinselectingR.Casescallingforspecialskepticism:StocksnotpayingdividendsStockswithgexpectedtoequalorexceedRWhereDoesRComeFrom?StartwiththeDGM:NotethatD1/P0isthedividendyieldandgisthecapitalgainsyield.UsingtheDGMtoFindRRearrangeandsolveforR:ImaginethataSolarCorp.’slastdividendwas$.65pershare.Solar’sdividendsaregrowingatarateof4%andthecurrentpricepershareis$11.25.WhatisthemarketRimplicitinSolar’sprice?R=(D1/P0)+gR=[(.65x1.04)/11.25]+.04R=.10or10%Example:UsingDGMtoFindRDividendsmaynotbeafirm’sonlycashpayoutRecentlymanyfirmshaverepurchasedshares,anotherformofpayoutUsingtheDividendGrowthModel,thepriceofasharewillbehigherifconsideringtotalpayoutratherthanjustdividendsTotalPayout Afirmforecastsincomeof$4.00pershareandwillpayout30%asdividends,30%assharerepurchaseandwillretaintherest.Itsgrowthrateis5%andrequiredreturnis10%.Whatisthepriceofashare?DividendGrowthModel:P0=(4.00X.30)/(.1-.05)=$24.00Noticethatthepriceisbasedondividend(30%ofearnings)growthonlyTotalPayoutModel:P0=(4.00X.60)/(.1-.05)=$48.00Noticethatthepriceisbasedontotalpayout(60%ofearnings=30%fordividendsand30%forsharerepurchase)growthExample:TotalPayoutValuationGrowthopportunitiesareopportunitiestoinvestinpositiveNPVprojects.Thevalueofafirmcanbeconceptualizedasthesumofthevalueofafirmthatpaysout100%ofitsearningsasdividendsplusthenetpresentvalueofthegrowthopportunities.6.3 GrowthOpportunitiesTwoconditionsmustexistifacompanyistogrow:Itmustnotpayoutallofitsearningsasdividends;and,ItmustinvestinprojectswithapositiveNPVPrerequisitestoGrowthWhydon’tfirmswithnodividendshavestockpriceof$0?SuchfirmsbelievetheirearningsarebetterusedtopursuegrowthopportunitiesInvestorspayastockpricethatconformstotheirowncalculusoftheNPVGOoftheno-payoutfirmThedividendgrowthmodeldoesnotworkinvaluingthisfirmThedifferentialgrowthmodelcan,butevaluatingthetimingofchangesingrowthistrickyTheNo-PayoutFirmManyanalystsfrequentlyrelateearningspersharetoprice.Theprice-earningsratioiscalculatedasthecurrentstockpricedividedbyannualEPS.TheWallStreetJournaluseslast4quarter’searnings6.4 Price-EarningsRatioGenerally,firmswithgrowthopportunitiescommandgreaterP/EthanthosewithnosuchprospectsAfirm’sRalsoimpactstheP/Eratio.TheP/EratioandRareinverselyrelated.AfirmwithconservativeaccountingprincipleswillgenerallyhaveahigherP/EratiothanonewithaggressivepoliciesFactorsImpactingtheP/ERatioVotingrights(Cumulativevs.Straight)ProxyvotingClassesofstockOtherrightsShareproportionallyindeclareddividendsShareproportionallyinremainingassetsduringliquidationPreemptiveright–firstshotatnewstockissuetomaintainproportionalownershipifdesired6.5FeaturesofCommonStockDividendsStateddividendmustbepaidbeforedividendscanbepaidtocommonstockholders.Dividendsarenotaliabilityofthefirm,andpreferreddividendscanbedeferredindefinitely.Mostpreferreddividendsarecumulative–anymissedpreferreddividendshavetobepaidbeforecommondividendscanbepaid.Preferredstockgenerallydoesnotcarryvotingrights.FeaturesofPreferredStockDealersvs.BrokersNewYorkStockExchange(NYSE)LargeststockmarketintheworldLicenseHolders(formerly“Members”)EntitledtobuyorsellontheexchangefloorCommissionbrokersSpecialistsFloorbrokersFloortradersOperationsFlooractivity6.6TheStockMarketsNotaphysicalexchange–computer-based