P6-20 Par = 1000

Coupon Time to maturity Yield to

Bond Coupon rate frequency (years) maturity Price

a 5% Semiannually 5 5%
b 5% annually 5 5%
c 7% Semiannually 7 7%
d 7% annually 10 7%
e 12% Semiannually 8 8%
f 10% annually 8 7%

A D
Valuation for semi annual Bond Valuation for annual Bond
par value $ 1,000.00 par value $ 1,000.00
Coupon intere 5% Coupon interest rat 7%
Interest paym 2 Annual interest pa $ 70.00
interest paym $ 25.00 required rate of ret 7%
required rate 5% Number of years to 10
Number of yea 5 bond value ($1,000.00)
bond value ($1,000.00) par value
E
B Valuation for semi annual Bond
Valuation for annual Bond par value $ 1,000.00
par value $ 1,000.00 Coupon interest rat 12%
Coupon intere 5% Interest payments p 2
Annual intere $ 50.00 interest payment $ 60.00
required rate 5% required rate of ret 8%
Number of yea 5 Number of years to 8
bond value ($1,000.00) par value bond value ($1,233.05) premium value

C F
Valuation for semi annual Bond Valuation for annual Bond
par value $ 1,000.00 par value $ 1,000.00
Coupon intere 7% Coupon interest rat 10%
Interest paym 2 Annual interest pa $ 100.00
interest paym $ 35.00 required rate of ret 7%
required rate 7% Number of years to 8
Number of yea 7 bond value ($1,179.14) premium value
bond value ($1,000.00)
emium value

emium value
 A.
Bond Par value Coupon Years to Current value
interest rate maturity
A $ 1,000 9% 8 $ 820 B
B $ 1,000 12% 16 $ 1,000
C $ 500 12% 12 $ 560
Hubungan antara coupon dengan
D $ 1,000 15% 10 $ 1,120 time maturity berkurang apabila
E $ 1,000 5% 3 $ 900 coupon of interest sama dengan n
persenan yang akan kita dapa
tidak bisa sesuai dengan coupon
Trial and market valuenya
Aprroximat Calculator
Bond e YTM Error YTM Error % Solutions
Approach
A 12.36% 12.71% -0.35% 12.71%
B 12.00% 12.00% 0.00% 12.00%
C 10.38% 10.22% 0.16% 10.22%
D 13.02% 12.81% 0.21% 12.81%
E 8.77% 8.95% -0.18% 8.95%

A B
Yield to Maturity Yield to Maturity
Par value $ 1,000 Par value
Coupon interest rate 9% Coupon interest rate
Interest payment per year 1 Interest payment per year
Interest payment $ 90 Interest payment
Number of years to maturity 8 Number of years to maturity
Bond current value $ -820 Bond current value
Bond yield to maturity 12.71% Bond yield to maturity

C D
Yield to Maturity Yield to Maturity
Par value $ 500 Par value
Coupon interest rate 12% Coupon interest rate
Interest payment per year 1 Interest payment per year
Interest payment $ 60 Interest payment
Number of years to maturity 12 Number of years to maturity
Bond current value $ -560 Bond current value
Bond yield to maturity 10.22% Bond yield to maturity

E
Yield to Maturity
Par value $ 1,000
Coupon interest rate 5%
Interest payment per year 1
Interest payment $ 50
Number of years to maturity 3
Bond current value $ -900
Bond yield to maturity 8.95%
 bungan antara coupon dengan yield to maturity akan mendekati nilai coupon interest sejalan ketika
me maturity berkurang apabila harga saat ini memiliki nilai yang sama dengan par value maka nilai
upon of interest sama dengan nilai yield to maturity coupon interest rate akan memberikan pengaruh
persenan yang akan kita dapatkan ketika menaruh uang di surat hutang ketika yield to maturity
dak bisa sesuai dengan coupon interest rate maka nilai current bond itu lebih murah jadi harusnya
market valuenya itu harusnya lebih murah saat bond diperjualbelikan

Yield to Maturity
$ 1,000
rate 12%
t per year 1
t $ 120
s to maturity 16
lue $ -1,000
aturity 12.00%

Yield to Maturity
$ 1,000
rate 15%
t per year 1
t $ 150
s to maturity 10
lue $ -1,120
aturity 12.81%
Bond Time to maturity Par value Yield to Maturity
A 5 $ 1,000.00 12%
B 5 $ 1,000.00 12%

A. Selling Price Each Bond

VALUATION FOR ANNUAL BOND A
Par value
Coupon interest rate
Annual interest payment
Required rate of return
Number of years to maturity
Bond value
Selling price

VALUATION FOR ANNUAL BOND B

Par value
Coupon interest rate
Annual interest payment
Required rate of return
Number of years to maturity
Bond value
Selling price

B. Mark memiliki uang $20000, maka berapa banyak bond yang bisa dibeli?
Number of bonds A = $20,000 / $783.71 =
Number of bonds B = $20,000 / $1,072.1 =

C Berapa banyak uang yang didapatkan untuk setiap jenis bond selama satu tahun?
Interest Income bond A = 25,5 x $ 60 =
Interest Income bond B = 18,7 x $ 140 =

D Saat di akhir tahun ke 5, kedua bond akan dijual seharga par $1000 dengan rate of return 10%
Bond A
Annual Interest Payment $ 60.00
Coupon Interest Rate 10%
Required rate of return 5
Number of years to maturity $ 1,000.00
Future value $ 366.31
Total $ 1,366.31
 Jika Mark khawatir mendapatkan keuntungan kurang dari 12% yield to maturity, maka berdasarkan persena
E kembali, mana yang terbaik dari kedua bond tersebut?
Bond A
Akumulasi selama 5 tahun cuan $ 1,366.31
Investasi awal $ 783.71
CAGR 11.76%

The difference is due to the differences in interest payment received each year. The principal payment at m
calculator, the yield to maturity of Bond A is 11,77% and the yield to maturity of Bond B is 11,59%, with the
Mark would be better off investing in Bond A
 Coupon rate
6%
14%

UAL BOND A
$ 1,000.00
6%
$ 60.00
12%
5
$ -783.71
$ 783.71

UAL BOND B
$ 1,000.00
14%
$ 140.00
12%
5
$ -1,072.10
$ 1,072.10

d yang bisa dibeli?

25.5
18.7

s bond selama satu tahun?

$ 1,530.00
$ 2,618.00

a par $1000 dengan rate of return 10%

Bond B
Annual Interest Payment $ 140.00
Coupon Interest Rate 10%
Required rate of return 5
Number of years to maturity $ 1,000.00
Future value $ 854.71
Total $ 1,854.71
ari 12% yield to maturity, maka berdasarkan persenan keuntungan yang diinvestasikan

Bond B
Akumulasi selama 5 tahun cuan $ 1,854.71
Investasi awal $ 1,072.10
CAGR 11.59%

ment received each year. The principal payment at maturity will be the same for both bonds. Using the
d the yield to maturity of Bond B is 11,59%, with the 10% reinversement rate for the interest payment.
 Coupon Years to Required stated Bond Value
Bond Par value interest rate maturity annual reutn
A $ 1,000 10% 12 8% $ 1,152.47
B $ 1,000 12% 20 12% $ 1,000.00
C $ 500 12% 5 14% $ 464.88
D $ 1,000 14% 10 10% $ 1,249.24
E $ 100 6% 4 14% $ -

Valuation Semiannual Bond A Valuation Semiannual Bond C

Par value $ 1,000.00 Par value
Coupon interest rate 10% Coupon interest rate
Interest payment per year 2 Interest payment per year
Interest payment $ 50.00 Interest payment
Required rate of return 8% Required rate of return
Number of year to maturity 12 Number of year to maturity
Bond value $ -1,152.47 Bond value

Valuation Semiannual Bond B Valuation Semiannual Bond D

Par value $ 1,000.00 Par value
Coupon interest rate 12% Coupon interest rate
Interest payment per year 2 Interest payment per year
Interest payment $ 60.00 Interest payment
Required rate of return 12% Required rate of return
Number of year to maturity 20 Number of year to maturity
Bond value $ -1,000.00 Bond value

Valuation Semiannual Bond E

Par value $ 100.00
Coupon interest rate 6%
Interest payment per year 2
Interest payment $ 3.00
Required rate of return 14%
Number of year to maturity 4
Bond value $ -76.11
uation Semiannual Bond C
$ 500.00
rate 12%
t per year 2
t $ 30.00
return 14%
to maturity 5
$ -464.88

uation Semiannual Bond D

$ 1,000.00
rate 14%
t per year 2
t $ 70.00
return 10%
to maturity 10
$ -1,249.24
 Gallinas Industries Balance Sheet December 31
Assets Liabilities and stockholde
Cash $ 40,000 Account payable
Marketable securities $ 60,000 Notes payable
Account receivable $ 120,000 Accured wages
Inventories $ 160,000 Total current liabilities
Total current assets $ 380,000 Long-term debt
Land and buildings (net) $ 150,000 Preferred stock
Machinery and equipment $ 250,000 Common stock (10,000 shares)
Total fixed assets (net) $ 400,000 Retained earnings
Total assets $ 780,000 Total liabilities and stockholders'

A. Book value per share = (Book value of assets - (liabilities + preferred stock at book value)) / number of share ou
= 36

B. Liquidation value

Cash $ 40,000
Marketable Securities $ 60,000 Liquidation value per share = Liquidatio
Account Receivable $ 108,000
Inventory $ 144,000
Land and Buildings $ 195,000
Machinery and Equipment $ 175,000
Liquidated value of assets $ 722,000
Less: Current liabilities $ 160,000
Less: Long-term debt $ 180,000
Less: Preferred stock $ 80,000
Nett Liquidated value of assets $ 302,000

C. Liquidation value is below book value per share and represents the minimum value for the firm. It is possible for
value to be greater than book value if assets are undervalued. Generally, they are overvalued on a book value basis,
case here.
et December 31
Liabilities and stockholders' equity 1. Preferred sock can be liquidated at book va
$ 100,000 2. Accounts receivable and inventories can be
$ 30,000 3. The firm has 10,000 shares of common sto
$ 30,000 4. All interest and dividends are currently pai
Total current liabilities $ 160,000 5. Land and buildings can be liquidated at 130
$ 180,000 6. Machinery and equipment can be liquidate
$ 80,000 7. Cash and marketable securities can be liqu
ock (10,000 shares) $ 260,000
$ 100,000
Total liabilities and stockholders' equity $ 780,000

ok value)) / number of share outstanding

value per share = Liquidation value of assets / Number of shares outstanding

= $ 30.20 per share

ue for the firm. It is possible for liquidation

ervalued on a book value basis, as is the
be liquidated at book value
and inventories can be liquidated at 90% of book vaue
shares of common stock outstandin 10000
dends are currently paid up
can be liquidated at 130% of book value
pment can be liquidated at 70% of book value
e securities can be liquidated at book value.
A Dividend $ 3.00 E Dividend
Rate of dividend growth 5% Rate of dividend growth
Required return 15% Required return

Share price A $ 31.50 Share price E

B Dividend $ 3.00
Rate of dividend growth 6%
Required return 14%

Share price B $ 39.75 B is the best alternative, because the share

C Dividend $ 3.00
Rate of dividend growth 7%
Required return 17%

Share price C $ 32.10

D Dividend $ 3.00
Rate of dividend growth 4%
Required return 16%

Share price D $ 26.00

 $ 3.00
8%
17%

$ 36.00

tive, because the share price is the highest than the other
 Year Dividen per share
2015 $ 3.44
2014 $ 3.28
2013 $ 3.15
2012 $ 2.90
2011 $ 2.75
2010 $ 2.45

Appropriate Risk premium 5%

Risk free rate currently 9%
Risk of return 14%

A Future Dividend Value = Present Dividend Value x ( 1 + g)^n

3,44 = 2,45 x (1+g)^5
1.404082 = (1+g)^5 ;n= 5
1.070233 = 1 + g

7%= g
Dividend Growth 7%
Dividend 2016 $ 3.68
Po $ 52.57 per share

B1 Pertumbuhan dividen turun ###

Future Dividend = Present Dividend x (1+g)^n
Dividend 2016 = $ 3.61
Po = $ 40.13 per share

B2 Risk Premium 4%
Risk-free rate 9%
Risk of return 13%
Dividen Growth 7%
Dividen 2016 $ 3.68
Po $ 61.33 per share