Outline of Session Outline of Session 4

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Preferred Stock Valuation Use DCF method. Discount preferred dividends at the appropriate discount rate to obtain the price of preferred stock. For example: XYZ preferred stock pays 1−Baht dividend. If you discount at 10%, you get a price of 10 Baht per share. 1 1 Preferred Stock Price + 2 = ( 1 + 10% ) ( 1 + 10% ) ( 1 + 10% ) 1 10% = 10 Baht + ... + = ∞ 1 Last Updated: June 11, 2009 © 2009 Charn Soranakom, Ph.D. Session 4 | Slide 18 of 19
In−class Exercises Let’s do some exercises in class together. Last Updated: June 11, 2009 © 2009 Charn Soranakom, Ph.D. Session 4 | Slide 19 of 19
Page 1 and 2: Outline of Session 4 Three Basic Va
Page 3 and 4: Bonds Bonds are one type of fixed i
Page 5 and 6: Calculation of Bond Price Example:
Page 7 and 8: These curves are convex. Last Updat
Page 9 and 10: Interest Rate Risk (or Price Risk)
Page 11 and 12: Stocks and the Stock Market Stocks
Page 13 and 14: P P 0 1 = = Div 1 ( 1 + r ) ( 1 + r
Page 15 and 16: Where Does g Come From? Year 1 2 3
Page 17: Preferred stock is classified as e

Outline of Session Outline of Session 4

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