Вы находитесь на странице: 1из 26

1.

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)

Bond Value Bond Value


Capital
(1993)
(1994)
Gains Yield

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

Previous year's shares less


60,000 sinking fund

=Shares remaining * Par


Value * Cumulative Dividend

= 60,000 * $100 (par


value)

=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

Expected Dividend Yield


Capital Gains Yield
Total Return

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

Intrinsic Value of TECO


stock

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