2.10. – What’s ahead?

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來自 Moscow Institute of Physics and Technology 的課程

Principles of Corporate Finance – A Tale of Value

6 個評分

Moscow Institute of Physics and Technology

Principles of Corporate Finance – A Tale of Value

6 個評分

課程 2（共 5 門，Specialization Understanding Modern Finance）

The study of Corporate Finance seems to be a very generic part of business education. Still, it either falls in the trap of intimidating formulas or is superficially journalistic. Both extremes preclude the understanding of the core finance ideas, concepts, and models. This Course is an attempt to avoid the above extremes. We discuss the core basis and mechanisms of modern corporate finance in a learner-friendly way. We will analyze the market’s most fundamental problems, realize the intrinsic interests and preferences of investors, reveal the true meaning of specific financial terms, and uncover important issues that are so often ignored in choosing and valuing investment projects. The learners will gain insight into the essence of corporate finance. They will be able to use the obtained knowledge and skills to successfully advance in their career at a financial institution, as well as in the area of financial management at non-financial businesses.

從本節課中

Applications of NPV. Valuing Bonds and Stocks

Week 2 of the Course is devoted to the applications of NPV. In the first part of the week we use NPV to study riskless debt. Of special attention will be the challenges in valuing even riskless bonds. We discuss bond parameters and the special role of yield to maturity. Then we demonstrate how the NPV approach helps determine spot and forward interest rates. The second part of Week 2 deals with the core concepts in valuing equity. We introduce the idea of the common stock value as a function of its cash disbursements. Then we present some formulas that are used to value common stock on the basis of NPV. We focus on growth as a major contributor to the stock value. We analyze growth drivers and the mechanism of growth. On an example we reveal the influence of investments on the stock value. Finally, we pose some questions with respect to NPV approach.

2.1. Introduction – a simple way to value bonds and stocks3:07

2.2. Valuing riskless debt6:37

2.3. Bond cash flows and other parameters. Yield to maturity10:12

2.4. Calculating spot rates8:01

2.5. Forward rates – the idea and calculation8:53

2.6. Valuing common stocks – the expected rate of return5:13

2.7. The general stock valuation formula. The “tail”7:09

2.8. The model of growth. PVGO5:55

2.9. A constant growing company – an example10:05

2.10. – What’s ahead?2:41

與講師見面

Konstantin Kontor
Director and Professor of Finance and Strategy
American Institute of Business and Economics (AIBEc)

Now, throughout this week we applied the NPV approach to valuing riskless bonds and

stocks, and we've seen that the approach is quite fruitful.

And that allows us, in the case of bonds, to analyze spot rates and

forward rates, and in the case of stocks it results in the ability to study growth

and to study even interesting growth cases with non-constant parameters.

Now, where would we go from here?

In our third week, we will analyze the analysis of investment projects that,

in our language, will be sort of like the stock valuation analysis,

in much greater detail.

Because in this week, although we said that in the case of

bonds Rs are different, and in the case of stocks Cs and

Rs, they are expected, but they are given.

They are given even as expected, so we just take them in all assignments and

all examples, and then feed our formulas.

In reality, in order to come up with these cash flows,

you have to analyze some financial information about the company.

And you also have to make the right assumptions, and

you have to use these numbers in the right way.

This is not such a trivial thing, and

that's exactly what we will do in our third week,

which is entitled using the NPV Approach to Valuate Investment Projects.

Now, I'm wrapping up this week.

I thank you all for attention.

But I have to unfortunately repeat,

once again, that all these things that we put up on this flip chart,

they are really clear and trivial when I do it.

So unfortunately,

understanding arrives only when you solve these problems and when you study that.

Well in the materials to our course there is a lot of literature,

including the corresponding chapters of our famous Brealy and Myers textbook.

So, you will be able to study that

in some greater detail if anything that I produced here was not quite clear.

But, as I said, the only way to, let's say

to get comfort with that, is to do some calculations on your own.

Therefore, I wish you good luck with your assignments and

I'll see you next week, in the third week of the course.

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