Group 7

FT153009 RANJITH RAMAN

FT153020
MINNA MARIA
THOMAS
FT153037 NIPUN SAHRAWAT
` FT153058 APOORV MOHAN
FT153079 SOUVIK DEY
FT153098 VISHAL GUPTA
Sl NO 6
Data Given
Period 10 yrs
Par value Rs 1000
Coupon Rate 12% semiannually
Current Price of Bond Rs 1100
Call price Rs 1060
Call time 4 yrs after issuance
a> Bonds yield to maturity (YTM)
PMT= 1000*0.12/2 60
period= 20 (10*2)
as coupon rate semi
annual
present value= -1100
So,using the rate function
Interest@ semi annual 5.18%
Interest.i.e YTM annually 10.37%
B> Current yield [ (PMT/cur price)*100] @ semi annually 5.45%
Current yield annually 10.91%
C> if bond is called then,YTC will be the total return
then Capital loss/ gain = YTC-Current Yield -0.76%
(Loss)
If bond is not called ,the YTM will be total return
So capital loss/gain -0.54%
d> Yield To call (YTC) @ semi annually 5.07%
Annually 10.15%
SL No. 2
DATA given
Period= 10 yrs
Par value= Rs 1000
Maturity=10 yrs
coupon rate=10% (semi annual payment)
A> PMT 50
If rate fallen to 6%,then
Price will be (using PV function) Rs. 1,251.22
(here period =16 i.e 8*2,rate 3%,FV=1000)
So sell price of bind in 2006 Rs 1251.22
B> If interest rate increase to 12%
Bond Price (using PV function) Rs. 916.16
So bond sell price in 2008 Rs 916.16
C> As we know that
Capital Gain Yield = (Price in the Subject year- Price in the
previous Year)/ price in the previous year
So, bond price in 2007 Rs. 1,225.92
Bond Price in 2005 Rs. 1,000.00
Then , capital gain @ 2006 25.12%
Then , capital gain @ 2008 -25.27%
Sl No 3. par value= Rs 1000
Coupon rate 12% semi annually
maturity period =30 yrs
a>
Since Bonds were sold in 1983,september, YTM will be equal
to coupon rate @september i.e 12%
B> PMT 60
If interest rate fallen to 10 %, after 10 yrs, then the price of
bond will be @1993 sept Rs. 1,171.59
C> price of bond @1992 sept Rs. 1,000.00
Capital gain yield@1993 17.16%
Current yield (coupn payment annually/bond price) 10.24%
D> bond price was RS 936.42 @2003
So YTM semi annually 6.45%
Annually YTM 13%
E> Current yield@2003 12.8%
Price of bond @2002 Rs. 1,131.63
Capital gain yield@2003 -17.3%
Sl No 5 Given
Divident yield 7%
Constant Growth 6%
Requied Rate of Return in industry (sum of above two) 13%
Now dividend year 1 (D1) 1.30
D2 at year 2 (considering growth rate of dividend 50%) 1.95
D3 at year 3 (considering growth rate of dividend 50%) 2.93
D4 at year 4 (considering growth rate of dividend 50%) 4.39
D5 at year 5 (considering growth rate of dividend 35%) 5.92
D6 at year 6 (considering growth rate of dividend 35%) 8.00
D7 at year 7 (considering growth rate of dividend 35%) 10.79
D8 at year 8 (considering growth rate of dividend 35%) 14.57
D9 to afterwards ( constant growth of 6%) 15.45
Price at yr 8=D9/(0.13-0.06) 220.68
Corresponding PV of @13% rate,8 yrs period Rs. 83.01
PV of all dividend from D1 to D8 Rs. 24.52
stock price today= Rs. 107.53
Price at yr 2 Rs. 27.89
Rs. 106.00
Rs. 133.89
Dividend yield 2.18%
Price At yr 1 Rs. 26.41
Rs. 93.80
Rs. 120.21
Capital Gain Yield at yr 2 11.38%
Sl NO 1 Data Given for Bond N
Face Value 20000
Maturity 20 years
coupon rate 9%@ semi annually
Redemption of principal Rs 1000/yr
Required Return 12% semi annually
Period
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9
9.5
10
10.5
11
11.5
12
12.5
13
13.5
14
14.5
15
15.5
16
16.5
17
17.5
18
18.5
19
19.5
20
Net Present value of Bond N Rs. 20,845.69
Sl No 4 Data Given
A> growth rate till 2 yrs 20%
Constant growth rate from 3rd yr onwards 6%
R 10%
D0 1.6
D1 (considering growth of 20%) 1.92
D2(considering growth of 20%) 2.304
D3(considering growth of 6%)& onwrds 2.44224
Price at yr 2 61.056
PV of above Rs. 50.46
PV of D1-D2 Rs. 3.65
Stock price today Rs. 54.11
Dividend yield 3.55%
Rs. 55.51
Rs. 2.09
Price at yr 1 Rs. 57.60
Capital Gain Yield 6.45%
B> D1 (considering growth of 20%) 1.92
D2(considering growth of 20%) 2.30
D3(considering growth of 20%) 2.76
D4(considering growth of 20%) 3.32
D5(considering growth of 20%) 3.98
D6(considering growth of 6%)& onwrds 4.22
stock price at yr 5 105.504768
PV fo above Rs. 65.51
PV of dividend Rs. 10.46
Stock price today Rs. 75.98
Dividend yield 2.53%
stock price at yr 1 Rs. 9.59
Rs. 72.06
Rs. 81.65
Capital gain yield 7.47%
C> Dividend Yield 4.00%
Capital Gains Yield 6.00%
FM Assignment II
9
( PV of div D3 to D8)
(PV of 220.68 at yr 2)
(D3/price at yr 2)
(price of yr 2-price at yr 1)/price at yr 1*100)
Cash Flow
0
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
900
1900
(pv of 61.053)
pv of D1
Chap ter 8
sl no 27
a> par value 1000
coupon rate 5.60%
current price 930
maturity 10 yrs
pmt 56
YTM 6.577%
b> present valye of annuity Rs. 350.94
present valye of lumpsum Rs. 638.41
value after 2 yrs Rs. 989.35
YTM then 6%
ch-9
eps 4.733333333
sl no 28
pv of annuity 800 Rs. 9,321.84
Rs. 5,822.39
pv of annuity 1000 Rs. 9,385.07
Rs. 3,129.71 13401
amount remaining Rs. 21,047.90
pv in 40 months Rs. 4,384.05
pv of value Rs. 13,336.15