金融學(xué)第二版課件Chpter09

Chapter9:

Valuationof CommonStocksObjectiveExplainequityevaluationusingdiscountingDividendpolicyandwealthChapter9Contents9.1Readingstocklistings9.2Thediscounteddividendmodel9.3Earningandinvestmentopportunity9.4Areconsiderationoftheprice/earningsmultipleapproach9.5Doesdividendpolicyaffectshareholderwealth?9.1ReadingStockListingsThefollowingnewspaperstocklistingisusuallyprintedasahorizontalstringofinformationThelistingisforIBM,whichistradedontheNewYorkStockExchangeReadingStockListingsReadingStockListingsHi=1231/8:Thehighestpricethestockhastradedatoverthelast52weeksLo=931/8:Thelowestpricethestockhastradedatoverthelast52weeksStock=IBM:Thestock’snameSym=IBM:Thestock’ssymbolReadingStockListingsDiv=4.84:Thelastquarterlydividendmultipliedby4Yld%=4.2:Dividendyield;(Annualizeddividend÷stockprice)PE=16:Price-to-earnings;(Latestprice÷last4actualdividends)Vol100s=14591*100;VolumeofexchangetradedsharesReadingStockListingsHi=115:HighestsharepriceofthedayLo=113:LowestsharepriceofthedayClose=1143/4:DaysclosingsharepriceChg=13/8:ChangeinclosingpricefromprevioustradingdayObservationItisusualtotradesharesinroundlotsof100sharesIfyoudecidetotradesharesasoddlotsyouwillpayhighercommissionsStocksplitsandstockdividendscancauseyoutoholdoddlots9.2TheDiscountedDividendModel

AdiscounteddividendmodelisanymodelthatcomputesthevalueofashareofastockasthepresentvalueoftheexpectedfuturecashdividendsEquivalenceofHPRandNPVThebookstartsfromtheholdingperiodreturn,andusesaninductiveargumenttoderivetheNPVmethodforevaluatingstocksEquivalently,westartwiththediscountedcashflowmodel,andobtaintheholdingperiodreturnNotationPjisthestockvalueinyearjDjisthecashdividendinyearjKistherequiredrateofreturnonthestockPresentValueofDividendsExpectedRateofReturnThepriceanddividendnextyearareexpectedprices,soTheexpectedrateofreturninanyperiodequalsthemarketcapitalizationrate,kRateRelationshipThisrelationshiptellsyouthatnextyear’sexpecteddividendyield+theexpectedcapitalgainyieldisequaltotherequiredrateofreturnPrice0IsDiscountedExpected(Dividend1+Price1)Priceisthepresentvalueoftheexpecteddividendplustheend-of-yearpricediscountedattherequiredrateofreturnEaseofUseEstimatingnextyear’sdividendisstraightforward,butestimatingnextyear’spriceappearstobemuchmoredifficultTheproblemisthatnextyear’spriceisobtained(eventually)byestimating,anddiscounting,everyfuturedividendEaseofUseWehavetointroduceasimplifyingassumptionthatcapturesourunderstandingofdividendbehaviorThesecondsimplestassumptionisthatadividendinanyfutureyearisthedividendintheprioryeartimesaconstantgrowthfactor(1+g)EaseofUseThinkofthisassomekindofdividendinflationFromchapter5weknowthatifkisthenominaldiscountrate,thentherealdiscountrate,R,isgivenbyR=(1+k)/(1+g)-1EaseofUseRecallfromchapter4that,foraperpetuity,thepresentvalueistherealvalueofthefirstcashflowdividedbytherealratePuttingThisTogetherSolvingforK

G=CapitalGainsYieldComparingpriorresults:ConclusionThecapitalgainsyieldisequaltothedividendgrowthrateGeneralizationThismodelcapturesmanyofthecharacteristicsofdividendcashflowsYoucouldnextassumethattherateofgrowth,g1,isvalidfroma1tob1,followedbyg2froma2(=b1+1)tob2,...Justlikethefolkinchapter5,businessesgrow,mature,anddecayMoreGeneralModelsChapter5containsanalternativederivationofgrowingperpetuityformulaItalsocontainstheequations,Excelworkbooks,andworkedexamplesforgrowingannuitymodelsofcommonstock9.3EarningandInvestmentOpportunityAsecondapproachtoDCFvaluationfocusesonfutureearningsandinvestmentopportunitiesThisfocus,ratherthantheearlierdividendfocus,concentratestheanalyst’sattentiononthecorebusinessdeterminantsofvalueCashFlowStatementsInchapter3wereviewedcashflowstatements.Algebraically,Netincome+depreciation-increasedworkingcapital-increaseP&E-dividends+increaseindebt-increaseininvestmentinmarketablesecurities=0CashFlowStatementsWesimplifythisByrollingchangesinworkingcapital,andP&E,intochangeininvestmentsByassumingpureequityfunding(nodebt)ByassumingnomarketablesecuritiesNetincome+depreciation-dividends-changeininvestments=0CashFlowStatementsWewanttoretainnetincomeasanaccountingentityinordertomaketheanalysisusefulDepreciationis“accountingdepreciation”andnotmarketvalueattrition.(Assumethesehappentobeequal)Definenetnewinvestmentsasnewinvestments-depreciationEarningandInvestmentOpportunityTosimplifytheanalysis,supposethatnonewsharesareissued,andnotaxesDividends=earnings-netnewinvestment“D=E-I”.TheformulaforvaluingstockisInterpretationThevalueofacompanyisnotequaltothepresentvalueofitsexpectedearningsInterpretationNetnewinvestmentmaybepositiveornegativeThelossofexistingassetvaluemaynotalwaysbecompensatedbynewinvestmentEarningsarewhataccountantsunderstandbytheterm,namelynetincomeafterinterestandtaxWearefinancefolk,buttheaccountantsprovidetheinformationNogrowthNogrowthCohasapolicyofnonetnewinvestmentsThisdoesnotmeanthefirmdoesnotinvestinnewplantandequipment--onlythatpurchasesmatchthelossofvalueoftheexistingassets(asmeasuredbydepreciation)Ifweassumeeverythingisinrealterms,itisreasonabletoassumethatNogrowthwillpayaconstant(say)$15/shareeachyearNogrowthIftherealcapitalizationrateis15%,thenthevalueofNogrowthis15/0.15=$100GrowthStockGrowthstockCoinitiallyhasthesameearningsasNogrowth,butreinvests60%ofitsearningseachyearintonewinvestmentsthatyieldarealrateofreturnof20%peryearGrowthStockThemanagementofGrowthstockmaybethoughtofastaking60%oftheshareholder’svalue,andreinvestingitonbehalfoftheshareholdersThatistheshareholdershave$100*0.4=$40ofthevalueoftheoldstream,andmanagementinveststheremaining$100*0.6=$60GrowthStockThefirstcashflowistheresultofinvesting$15*0.6=$9inyear1toobtain$15*0.6*0.20=$1.8foreverInyear1thishasavalueof$1.8/0.15=$12Thereisasecond,third,fourth,…flowstartinginyear3,4,5,…also$12Thepresentvalueofthesestreamsis12/0.15=$80GrowthStockMagicManagementhastakenshareholdervalueof$60andturneditinto$80Themagicdoesnotstophere.Managementwilltake60%ofthenewcashflowsandreinvestthemtoreturna80/60rewardtotheshareholders,andreinvest60%ofthoseThewealthoftheshareholderswillbecomeprogressivelymultipliedGrowthStockOriginalwealthKeptReinvestedWealthMultiplierGrowthStockGeneralizeLettheV=valueoftheshareswithoutreinvestmentG=thegrowthfromnewinvestmentR=retentionratioM=wealthmultiplier=g/iWealthg=wealth0*(1-r)/(1-w*r)ObservationIfmanagementhadselectedaslightlyhigherretentionratior=i/g=0.20/0.15=0.75,thenthevalueofthecompanygoestoinfinityWhenthiskindofthinghappensinfinance,itisasignthatsomethinghasbeenmissedoutoftheanalysisTherequiredrateofreturndemandedbyinvestorsmayneedtobeincreasedAlternativeSolutionMethodRecognizingthatG=changeinearnings÷earnings =(netinvestment÷earnings)*(Changeinearnings÷netinvestment)Growthisthentheproductoftheearnings-retentionrateandtherateofreturnonnewinvestmentPricegrowth=6÷(0.15-(0.6*0.2))=$200AlternativeSolutionMethodTheincreaseinthevalueofthestockistheconsequenceofreinvestmentatahigherrateofreturnthantheinvestorrequiredrateofreturnNormalgrowthhasinvestmentopportunitiesof15%,butstillreinvests60%oftheearningsReinvestmentUnderNormalGrowthRetentionRatioGrowthRateCostofCapitalReinvestmentUnderNormalGrowthInthiscasethereisnoincreasedvaluetotheshareholdersNogrowthandNormalprofitAReconsiderationofthePriceMultipleApproach

RecalltheP0=e1/k+NPVoffutureinvestmentsIntermsofP/EP0/

E1=1/k+NPV/E1offutureinvestmentsFirmswithhighPEratiosaretheninterpretedashavinglowcapitalizationratesorexcellentfutureinvestmentopportunitiesDoesDividendPolicyAffectShareholderWealth?

DividendpolicyofacorporationThepolicyregardingpayingoutcashtoitsshareholders,holdingconstantitsinvestmentandborrowingdecisions9.4ReconsiderationofthePrice/EarningsMultipleApproachTheformulaforagrowingperpetuityis:9.5DoesDividendPolicyAffectShareholderWealth?

Inafrictionlessworldwheretherearenotaxesnortransactioncosts,thedividendpolicy(asdefinedinthelastslide)willhavenoaffectonthewealthofstockholdersWeshallexamine:tax,regulations,costofexternalfinancing,andinformationcontentofdividendsCashDividendsandShareRepurchasesAcorporationmaydistributecashBypayingdividendsAllshareholdersarepaidthesamepershareByrepurchasingitsownstockShareholderschoosingtoliquidatesomeoralloftheirholdingssellthesharesatmarketprice(astheynormallydo),andthecompanymakesmarketpurchasesIllustration:DividendPaymentThefollowingtableshowsasimplifiedbalancesheetofCashrichCoAssumeNumberofsharesoutstanding=500,000Shareprice=$20Illustration:DividendsIllustration:DividendPaymentIfCashrichdeclaresadividendof$2/shareitwillpay500,000*$2=$1,000,000Givenitslevelofrisk,thepaymentwillreducethemarketvalueofthesharesby$1,000,000to$20*500,000-$1,000,000=$9,000,000,soeachsharewillbeworth$9,000,000/500,000=$18/shareIllustration:DividendPaymentWas2Was10Were12Were12Illustration:DividendPaymentBeforethedividend,everysharewasworth$20Afterthe$2/sharedividend,everysharewasworth$18ConclusionShareholderswealthisunchangedIllustration:ShareRepurchaseTheoriginalbalanceisshownbelowSharepriceisstill$20Numberofsharesoutstandingis500,000Illustration:ShareRepurchaseIllustration:ShareRepurchaseThecompanyrepurchases50,000sharesat$20pershare=$1,000,000Themarketvalueofthefirmisnow$10,000,000lessthelossof$1,000,000cash,or$9,000,000Thenumberofsharesoutstandingisnow500,000-50,000=450,000Illustration:ShareRepurchaseThesharepriceisthen$9,000,000/450,000=$20ThewealthoftheshareholderswhosoldoutisunchangedThewealthoftheshareholderswhoheldthestockisunchangedIllustration:ShareRepurchaseWas2Was10Were12Were12StockDividendsCorporationssometimesdeclareastocksplitanddistributestockdividendsTheseactivitiesdonotdistributecashtotheshareholdersTheyincreasethenumberofissuedshares,butdonotchangethe%ofthecompanyeachshareholderownsTheydonotaffectshareholderwealthModiglianiandMillerInafrictionlessenvironment,wheretherearenocostsofissuingnewsharesofstock,norcostsofrepurchasingexistingshares,afirm’sdividendpolicycanhavenoeffectonthewealthofcurrentshareholdersTheRealWorld:ShareRepurchaseSmartCohashadagoodyear,andisconsideringrepurchasingsomeoutstandingst