Lý thuyết tài chính - Investing in stocks and bonds

PFIN4Investing in Stocks and Bonds12Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. GITMAN/ JOEHNK/ BILLINGSLEY2Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Describe various types of risk to which investors are exposed, as well as the sources of returnKnow how to search for an acceptable investment on the basis of risk, total return, and yieldDiscuss the merits of investing in common stock and be able to distinguish among the different types of stocksLEARNING OUTCOMESPFIN4 | CH123Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Become familiar with the various measures of performance and how to use them in placing a value on stocksDescribe the basic issue characteristics of bonds as well as how these securities are used as investment vehiclesDistinguish between the different types of bonds, gain an understanding of how bond prices behave, and know how to compute different measures of yieldLEARNING OUTCOMES (continued)PFIN4 | CH12Risks of Investing4Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. BusinessVariability associated with a firm’s cash flows and with its ability to meet its operating expensesFinancialAssociated with mix of debt and equity financing used by the issuing firm and ability to meet its financial obligationsMarketAssociated with the price volatility of a securityPFIN4 | CH12Risks of Investing5Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Purchasing powerResults from possible changes in price levelsInterest rateResults from changing market interest ratesLiquidityRisk associated with the inability to liquidate an investment at a reasonably priceEventUnexpected event leading to a sudden and sizeable change in the value of an investmentPFIN4 | CH12Returns from Investing6Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Current income - Received with some degree of regularity over a yearCapital gains - Reflected as an increase in the market value of an investment vehicleEarning interest on interestPFIN4 | CH12Exhibit 12.27Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG4 | CH1The Risk-Return RelationshipComponents of a Good Investment8Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Future returnApproximate yieldProvides a measure of the fully compounded rate of return from an investmentDesired rate of return: Minimum rate of return earned in compensation for the amount of risk assumedPFIN4 | CH12Exhibit 12.39Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG4 | CH12Performance of Dow Jones Industrial Average and NASDAQ Composite, 2004 through 2014Source: Morningstar 2013.Investing in Common Stock10Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Issuers of common stockIssued by any corporation in any line of businessVoting rights - For each share of stock held holders receive one voteProxy: Written statement used to assign a stockholder’s voting rights to another personBasic tax considerationsCommon stocks provide income in the form of dividends and/or capital gainsPFIN4 | CH12Dividends11Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Paid by firms to their common stock holders in cash and/or additional stockDividend yield: Percentage return provided by the dividendsStock dividendsNew shares of stock distributed to existing stock holders as a supplement for cash dividendsPFIN4 | CH12Key Measures of Performance12Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Book value: Amount of stockholder’s equity in a firmNet profit margin: Relates a firm’s net profits to its salesReturn on equity (ROE): Captures the firm’s overall profitabilityPFIN4 | CH12Key Measures of Performance13Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Earnings per share (EPS): Return earned by each share of common stockPrice/earnings (P/E) ratio: Measure of investors’ confidence in a given securityBeta: Index of the price volatility for a share of common stockPFIN4 | CH12Types of Common Stock14Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Blue-chipProvides an continuous stream of dividends and long-term growth prospectsGrowthEarnings and/or market price have increased over time at a above average rate TechRepresents the technology sector of the marketPFIN4 | CH12Types of Common Stock15Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. IncomeOffers dividend payments that can be expected to increase over timeSpeculativePurchased with a hope that its price per share will increaseCyclicalPrice movements tend to parallel the various stages in the business cycleDefensivePrice movements are contrary to movements in the business cyclePFIN4 | CH12Reasons for Investing in Common Stock16Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Using the stock as a warehouse of valueAccumulating capitalProviding source of income PFIN4 | CH12Stock Ownership17Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. AdvantagesPotential returnsActively traded and are highly liquid form of investment Available market and company informationDisadvantagesRiskProblem of timing purchases and salesUncertainty of dividends PFIN4 | CH12Making the Investment Decision18Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Putting a value on stockTiming the investmentsBeing sure to gain earningsDividend Reinvestment Plan (DRP): Allowing stockholders to take their cash dividends in the form of more shares of the firm's stockPFIN4 | CH12Types of Bonds19Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Coupon: Defines the annual interest income paid to bondholder by the issuer Types of issuesMortgage bond: Secured by a claim on real assetsEquipment trust certificates: Secured by certain types of equipment PFIN4 | CH12Basic Issue Characteristics of Bonds20Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Debentures: Unsecured bond issued on the general credit of the firmSinking fund: Specifies the annual repayment schedule to be used in paying off the issueCall feature: Allows the issuer to retire the security prior to maturityPFIN4 | CH12Bond Market21Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Treasury bondIssued and backed by the full faith and credit of the U.S. governmentTreasury inflation-indexed bond (TIPS): Principal payments adjusted to provide protection against inflation Agency bondObligation of a political subdivision of the U.S. government PFIN4 | CH12Bond Market22Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Mortgage-backed securitiesClaim on the cash flows generated by mortgage loansMunicipal bonds: Issued by state or local governmentsSerial obligations: Issue broken down into a series of smaller bonds with own maturity date and coupon ratePFIN4 | CH12Bond Market23Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Revenue bonds: Serviced from the income generated by a specific projectGeneral obligation bonds: Backed by the full faith and credit of the issuing municipalityCorporate bonds: Issued by a corporationPFIN4 | CH12Bond Market24Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Convertible bondsConversion privilege: Stipulates the conditions of the conversion feature Conversion ratio: Specifies the number of shares of common stock into which a convertible bond can be converted PFIN4 | CH12Bond Market25Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Conversion value: Measure of what a convertible issue would trade for if it were priced to sell based on its stock valueConversion premiums: Difference between a convertible security’s market price and its conversion valuePFIN4 | CH12Exhibit 12.226Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. MKTG4 | CH12Moody’s and Standard & Poor’s Bond RatingsPricing a Bond27Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PFIN4 | CH12All bonds are priced as a percentage of parPriced in decimals in the corporate and municipal marketAccrued interest: Amount of interest earned since the last coupon payment date by the bond holder/sellerClean Price: Quoted price of a bond minus accrued interestDirty Price: Quoted price of a bond plus accrued interestBond Prices and Yields28Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PFIN4 | CH12Bond price depends on its:CouponMaturityMovement of market interest ratesPremium bond: Market value is higher than parDiscount bond: Market value is lower than parBond Prices and Yields29Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PFIN4 | CH12Current yieldAmount of current income a bond provides relative to its market priceYield to maturityFully compounded rate of return that bond would yield if held to maturity30Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Business riskFinancial riskMarket riskPurchasing power riskFixed income securitiesInterest rate riskLiquidity riskEvent riskRisk-free rate of returnDesired rate of returnResidual ownersKEY TERMSProxyDividend yieldStock dividendsBook valueNet profit marginReturn on equity (ROE)Earnings per share (EPS)Price/earnings (P/E) ratioPFIN4 | CH1231Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. BetaBlue-chip stockGrowth stockTech stockIncome stockSpeculative stockCyclical stockDefensive stockLarge-cap stockMid-cap stockSmall-cap stockKEY TERMSDividend reinvestment plan (DRP)CouponMortgage bondEquipment trust certificateDebentureSinking fundCall featureTreasury bondTreasury inflation-indexed bond (TIPS)PFIN4 | CH1232Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Agency bondMortgage-backed securitiesMunicipal bondSerial obligationRevenue bondGeneral obligation bondCorporate bondConversion privilegeConversion ratioKEY TERMSConversion valueConversion premiumJunk bondAccrued interestClean priceDirty (full) pricePremium bondDiscount bondCurrent yieldYield to maturityPFIN4 | CH1233Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. SUMMARYInvestors are exposed to business, financial, market, purchasing power, interest rate, liquidity, and event risksSources of return - Current income, capital gains, and interestAn investment is acceptable only if it is expected to generate a rate of return meets one’s desired rate of returnTypes of stockBlue-chip, growth, tech, income, speculative, cyclical, defensive, and market-cap PFIN4 | CH1234Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. SUMMARYMeasures of performanceBook-value, net-profit margin, ROE, EPS, P/E ratio, and betaBonds are referred to as fixed-income securities as the debt service obligations of the issuer are fixedTypes of bondsTreasury, agency, mortgage-backed, municipal, corporate, and convertible PFIN4 | CH12