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MANAGEMENT
UNIT II :
Valuation of Securities : Equity -
Preference shares - Debt instruments -
Hybrid securities - derivatives - Asset
pricing theories - CAPM - APT -
Portfolio theory - Option pricing theory.
Valuation Concepts
Basic Valuation:
Valuation of Shares
Equity Shares
Preference Shares
Valuation of Bond
Bond Features
What is a bond -
debt issued by a corporation or a governmental body.
A bond represents a loan made by investors to the issuer.
In return for his/her money, the investor receives a legal claim on
future cash flows of the borrower.
Default
an issuer who fails to pay is subject to legal action on behalf of the
lenders (bondholders). 9
Bond Basics
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Key Features of a Bond
1. Yield to Maturity
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