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Midterm and Lecture 11-12

The document contains a midterm exam with answers related to finance concepts such as bonds, preferred stocks, and market valuation. Key topics include the distinction between primary and secondary markets, bond pricing, and methods for valuing preferred stock. It also discusses the Gordon growth model and various valuation techniques like discounted cash flow and comparative analysis.

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Minh Ngọc Hoàng
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21 views3 pages

Midterm and Lecture 11-12

The document contains a midterm exam with answers related to finance concepts such as bonds, preferred stocks, and market valuation. Key topics include the distinction between primary and secondary markets, bond pricing, and methods for valuing preferred stock. It also discusses the Gordon growth model and various valuation techniques like discounted cash flow and comparative analysis.

Uploaded by

Minh Ngọc Hoàng
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Midterm

3B

4C (an investor will take higher risk if he expected higher return

5A

6D

7C

8C

9D

10A

11D

12C interest change, the price bond will change

13 tu tinh

14 tu tinh

15D

16 tu tinh

17D

18A

19A

20D

Primary market: newly stock list in the market

Secondary: already transacted

Why: determine the price

Lesson 8-12

Convertible bond

Book value: money has to pay if own the bond (record on the Balance Sheet)

Efficient market: 10m value the house (no one want to buy in the market)

Intrisic value equal the price  Yield to maturity

Current yield > coupon interest  market price < pace value (the bond is at the discount)

Required rate of return > coupon interest


The bond is at the premium when market price > pace value

Pace value (principal amount)

11-12

Prefered stock and bond (dividend paid)

Cổ phiếu ưu đãi: dividend trả cố định

Cổ phiếu thg: cổ tức có thể thay đổi

Difference between Prefered stock and bond (eg: in terms of dividend paid)

Prefered stock Bond


Fixed amount of money
Có thể đợi khi đáo hạn
Net incom Earning before interest
P Will be pay the debt first (có quyền thu hồi lại
tiền)

Q2: How to value prefer stock

Value of stock

Vps = D/r (r is interest rate, D: a fixed amount of money)

For ex: 100$/10%

Q3: If the dividend that pay to you has the constant growth rate of g, how to calculate the valuer

Vps = D/(r-g)

Gordon growth (dividend discounted model): just for matured company: mô hình chiết khấu cổ tức

1. Discounted cash flow

- DDM
- Free cash flow
- Asset buyed valuation

2. Comparative (Price to Earnings P/E, EPS, Price to sales, price to book)

3. Some of the part

Final: Valuing common stock: Value a share of common stock that paid 2$...

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