Documente Academic
Documente Profesional
Documente Cultură
a-c
Face Amount
48,000,000
32,000,000
100,000,000
Par Value
1,000
1,000
1,000
Coupon
Rate
4.50%
8.25%
12.625%
Maturity
Year
1997
2007
2017
Years to
Maturity
5
15
25
Rate of
Return
10%
10%
10%
1.d
Effective Annual Rate (EAR)
EAR =
i = stated annual interest rate
m = number of periods
Calc using the formulas
Excel =EFFECT(rate,npery)
10%
2
10.25%
10.25%
1.e
Face Amount
48,000,000
32,000,000
100,000,000
Par Value
1,000
1,000
1,000
Coupon
Rate
4.50%
8.25%
12.625%
Maturity
Year
1997
2007
2017
Years to
Maturity
5
15
25
Rate of
Return
10.25%
10.25%
10.25%
INT/PMT
(Annual)
45.00
82.50
126.25
INT/PMT
(Annual)
45.00
82.50
126.25
Bond Value
(Annual)
$791.51
$866.89
$1,238.27
Bond Value
(Annual)
$783.41
$850.02
$1,211.50
INT/PMT
(SemiAnnual)
22.50
41.25
63.13
INT/PMT
(SemiAnnual)
22.50
41.25
63.13
Bond Value
(SemiAnnual)
$787.65
$865.49
$1,239.61
15,052.50
Bond Value
(SemiAnnual)
$779.34
$848.44
$1,212.67
15,052.50
Face Amount
Par Value
48,000,000
32,000,000
100,000,000
1,000
1,000
1,000
1,000
Coupon
Rate
4.50%
8.25%
12.625%
7.375%
Maturity
Year
Years to
Maturity
1997
2007
2017
2017
5
15
25
25
Rate of
Return
10%
10%
10%
10%
INT/PMT
(Annual)
45.00
82.50
126.25
73.75
Bond Value
(Annual)
$791.51
$866.89
$1,238.27
$761.73
3
Par Value
1,000
1,000
3.a
Coupon
Rate
12.625%
7.375%
Years to
Maturity
25
25
Rate of
Return
10%
10%
INT/PMT
(Annual)
126.25
73.75
Bond Value
(Annual)
$1,238.27
$761.73
Selling
Price
1,220.00
747.48
Nominal
YTM
10.1696%
10.1998%
3.b
Current Yield = Annual Interest Payments/Bond's current price
Coupon
Rate
INT/PMT
(Annual)
Selling
Price
Current
Yield
12.625%
126.25
1,220.00
10.3484%
7.375%
73.75
747.48
9.8665%
3.c
Capital Gains Yield = Bond's Annual Change in Price/Beginning Price
Par Value
Coupon
Rate
Years to
Maturity
Rate of
Return
INT/PMT
(Annual)
1,000
12.625%
48
5.09%
63.13
1,220.00
$1,218.02
-0.1629%
1,000
7.375%
48
5.09%
36.88
747.48
$749.88
0.3205%
3.d
Bond Value over Time
Coupon
Par Value
Rate
Years to
Maturity
Rate of
Return
INT/PMT
(Annual)
50
48
46
1993
1994
1995
1993
1994
1995
1,000
12.625%
48
5.09%
63.13
1,220.00
$1,218.02
$1,215.70
1,000
7.375%
48
5.09%
36.88
747.48
$749.88
$752.54
3.e
Expected Total Return = sum of expected dividend yiled and the expected capital gains yield
Par Value
Coupon
Rate
INT/PMT
(Annual)
Bond Value
(1993)
Dividend
Yield
Capital
Gains Yield
Expected
Total
Return
1,000
12.625%
126.25
1,220.00
10.3484%
-0.1629%
10.1855%
1,000
7.375%
73.75
747.48
9.8665%
0.3205%
10.1870%
INT/PMT
(SemiAnnual)
Bond Value
(SemiAnnual)
22.50
41.25
63.13
36.88
$787.65
$865.49
$1,239.61
$760.39
Selling
Price
800.00
865.49
1,220.00
747.48
Nominal
YTM
(SemiAnnual)
YTM
(Annual)
9.7411%
10.0205%
10.1696%
10.1998%
4.8171%
5.0000%
5.0905%
5.0900%
Nominal
YTM
(Annual)
9.6343%
10.0000%
10.1810%
10.1800%
EFF% YTM
(Annual)
9.8663%
10.2500%
10.4402%
10.4391%
3.a
YTM Semiannual
5.0905%
5.0900%
EFF% YTM
10.4402%
10.4391%
Current
Yield
10.3484%
9.8665%
1,400.00
1,200.00
1,000.00
800.00
10.1855%
10.1870%
600.00
52.50
400.00
200.00
-
44
42
40
38
36
34
32
1996
1997
1998
1999
2000
2001
2002
1996
1997
1998
1999
2000
2001
2002
$1,213.15
$1,210.33
$1,207.21
$1,203.77
$1,199.97
$1,195.77
$1,191.14
$755.47
$758.71
$762.28
$766.23
$770.59
$775.40
$780.72
12.625s
7.375s
20
18
16
14
12
10
2008
2009
2010
2011
2012
2013
2014
2015
2008
2009
2010
2011
2012
2013
2014
2015
$1,151.19
$1,141.91
$1,131.65
$1,120.32
$1,107.81
$1,093.99
$1,078.73
$1,061.87
$826.54
$837.20
$848.97
$861.97
$876.32
$892.17
$909.68
$929.02
2016
2017
2018
2016
2017
2018
$1,043.26
$1,022.70
$1,000.00
$950.37
$973.95
$1,000.00
Face Amount
Par Value
48,000,000
1,000
32,000,000
100,000,000
Coupon
Rate
Maturity
Year
Years to
Maturity
Rate of
Return
INT/PMT
(SemiAnnual)
Bond Value
(SemiAnnual)
4.50%
1997
10%
22.50
$787.65
1,000
8.25%
2007
15
10%
41.25
$865.49
1,000
12.625%
2017
25
10%
63.13
$1,239.61
1,000
7.375%
2017
25
10%
36.88
$760.39
Rate of
Return
Bond Value
(SemiAnnual)
13%
$416.68
13%
$334.76
13%
$486.72
13%
$317.40
$370.97
$530.73
$752.89
$443.00
Par Value
Cumulative
Dividend
Stock Price
per Share
Nominal ERR
100
4.32%
$48.00
9.00%
EFF%
Year
Par
Value
Cumulative
Dividend
9.31%
1
2
3
4
5
100
100
100
100
100
9.75%
9.75%
9.75%
9.75%
9.75%
Notes:
Shares Remaining
Dividend
Entitlement
Sinking Fund
Total Payment
$300,000
$240,000
$180,000
$120,000
$60,000
$2,925,000
$2,340,000
$1,755,000
$1,170,000
$585,000
$6,000,000
$6,000,000
$6,000,000
$6,000,000
$6,000,000
$8,925,000
$8,340,000
$7,755,000
$7,170,000
$6,585,000
TOTAL
Divided by
Value per share
=Dividend entitlement +
Sinking Fund
y
r share
Nominal
Rate
PV
8%
8%
8%
8%
8%
$8,263,897.92
$7,150,223.15
$6,156,194.16
$5,270,196.34
$4,481,679.28
$31,322,190.84
$300,000
$104.41
=-PV(Rate, payment period,cash
dividend,total payment,0)
Growth rate,
g
= 6.0%
Stock
Price1992, P0
= $22.26
Dividend, D1
= $1.80
Dividend
Yield
= D1 / P0
= $1.80/$22.26
0.08086
Growth rate,
g
Expected
Rate of
Return
0.06
14.09%
= $22.26*1.06
$
23.5956
P
$
22.2600
Expected
= ($22.26*1.06
- $22.26)/$22.26
Capital
Gains Yield
0.06
P1
Year, t
Growth rate, g
0
1
2
3
4
5
6.00%
6.00%
6.00%
6.00%
6.00%
6.00%
Stock Price, Pt
$
$
$
$
$
$
21.00
22.26
23.60
25.01
26.51
28.10
Dividend, Dt
$
$
$
$
$
$
1.70
1.80
1.91
2.02
2.14
2.27
Notes:
= Previous year's
stock price * (1+g)
= Previous year's
dividend * (1+g)
Dividend
Yield
Capital
Gains Yield
8.09%
8.09%
8.09%
8.09%
8.09%
8.09%
6.00%
6.00%
6.00%
6.00%
6.00%
6.00%
= Dt/Pt
=(P1-P0)/P0
8.a
Start of 1992
(yr: 1-5)
(yr: 6 onwards)
6%
7.5%
10
TECO
k
g
Div
Selling Price
FCFt
(1 + WACC)t
PV of FCFs
Total PVs
8.b
(yr: 1-5)
(yr: 6 onwards)
6%
7.5%
10
TECO
k
g
Div
Selling Price
FCFt
(1 + WACC)t
PV of FCFs
Total PVs
8.c
8.d
=$1.80/28.56
=(30.62-28.56)/28.56
Start of 1992
(yr: 1-5)
6%
TECO
k
(yr: 6 onwards)
7.5%
10
g
Div
Selling Price
PV - 1992
PV - 1993
PV - 1994
PV - 1995
PV - 1996
Stock Value
Dividend Yield
Capital Gains Yield
Total Yield
8.e.
Expected rate of return
0.1408625337
Start of 1992
TECO
k
g
Div
Selling Price
PV - 1992
PV - 1993
PV - 1994
PV - 1995
PV - 1996
Stock Value
Dividend Yield
Capital Gains Yield
Total Yield
###
###
###
###
1995
1992
1993
1994
1996
13.5%
6.0%
$ 1.80
$
$ 1.80
13.5%
6.0%
$ 1.91
$
$ 1.91
13.5%
6.0%
$ 2.02
$
$ 2.02
13.5%
13.5%
6.0%
6.0%
$ 2.14 $
2.27
$
$40.71
$ 2.14 $
42.99
113.5%
$ 1.59
128.8%
$ 1.48
146.2%
$ 1.38
166.0%
188.4%
$ 1.29 $
22.82
###
1997
13.5%
7.5%
$ 2.44
$28.56
###
###
###
1992
1993
1994
13.5%
6.0%
$ 1.80
13.5%
6.0%
$ 1.91
$
$ 1.91
113.5%
$ 1.68
13.5%
6.0%
$ 2.02
$
$ 2.02
128.8%
$ 1.57
###
1995
1996
13.5%
13.5%
6.0%
6.0%
$ 2.14 $
2.27
$
$40.71
$ 2.14 $
42.99
146.2%
166.0%
$ 1.47 $
25.90
###
1997
13.5%
7.5%
$ 2.44
$30.62
0.06303
0.07198
0.13501
###
###
###
###
###
1992
1993
1994
1995
1996
1997
13.5%
13.5%
13.5%
13.5%
13.5%
13.5%
0.0%
$ 1.80
$0.00
$ 1.59
0.0%
$ 1.80
$0.00
$ 1.40
$ 1.59
$19.76
9.11%
4.39%
13.50%
0.0%
$ 1.80
$0.00
$ 1.23
$ 1.40
0.0%
0.0%
$ 1.80 $
1.80
$0.00
$25.44
$ 1.08 $
14.46
$ 1.23 $
16.41
$
$
$20.63
8.73%
4.77%
13.50%
1.59
$21.61
8.33%
5.17%
13.50%
1.40 $
1.59 $
$
$22.73
6.0%
$ 1.91
18.63
21.15
24.00
$24.00
7.92%
5.58%
13.50%
7.50%
6.00%
13.50%
8.80
###
###
###
###
###
1992
1993
1994
1995
1996
1997
13.5%
6.0%
$ 1.80
$0.00
$ 1.59
13.5%
6.0%
$ 1.91
$0.00
$ 1.48
$ 1.68
13.5%
6.0%
$ 2.02
$0.00
$ 1.38
$ 1.57
$ 1.78
13.5%
6.0%
$ 2.14
$0.00
$ 1.29
$ 1.47
$ 1.66
$ 1.89
13.5%
6.0%
$
2.27
$40.71
$
22.82
$
25.90
$
29.40
$
33.37
$
37.87
13.5%
7.5%
$ 2.44
$22.26
8.09%
37.56%
45.65%
$30.62
6.23%
7.27%
13.50%
$32.85
6.16%
7.34%
13.50%
$35.26
6.08%
7.42%
13.50%
$37.87
6.00%
7.50%
13.50%
1998
1999
##
2000
##
2001
13.5%
13.5%
13.5%
13.5%
7.5%
7.5%
7.5%
7.5%
$
2.63 $
2.82 $ 3.03 $ 3.26
PV of FCFs
= FCFt/(1+WACC)2
(1 + WACC)2
= (1 + 13.5%)^2
128.8%
= $1.91 / 128.8%
$1.48
Selling Price (1997)
= FCF / (k - g)
= 2.44 / (13.5%-7.5%)
$40.71
6
1998
1999
##
2000
###
2001
13.5%
13.5%
13.5%
13.5%
7.5%
7.5%
7.5%
7.5%
$
2.63 $
2.82 $ 3.03 $ 3.26
##
##
1998
1999
2000
2001
13.5%
13.5%
13.5%
13.5%
6.0%
6.0%
6.0%
6.0%
$
2.02 $
2.14 $ 2.27 $ 2.41
PV of FCFs
= FCFt/(1+WACC)2
= $1.91 / 128.8%
$1.48
Selling Price (1997)
= FCF / (k - g)
= 1.91 / (13.5%-6%)
$25.44
(1 + WACC)2
= (1 + 13.5%)^2
128.8%
(1 + WACC)2
(1 + 13.5%)^2
8.8%
(1 + WACC)2
(1 + 13.5%)^2
8.8%
Dividend
$
1.80
, D1
Quarterl
$
0.45
y
k
13.50%
g
6.0%
Quarter
1
2
3
4
Dividendq
$
$
$
$
0.45 $
0.75
0.45 $
0.50
0.45 $
0.25
0.45 $
Total Annual CF
k-g
k
13.50%
13.50%
13.50%
13.50%
= 13.5% - 6%
= $ 1.8887 / 7.5%
PVs = Dqi(1+k)i
$
$
$
$
$
0.4948
0.4794
0.4645
0.4500
1.8887
7.5%
25.1827