Fixed-Income Securities: Characteristics and Valuation

6 Fixed-Income Securities: Characteristics and Valuation Introduction This chapter focuses on the characteristics and valuation of fixed-income securities. Long-term debt Preferred stock Classification of Long-Term (L-T) Debt Mortgage bonds secured Debentures unsecured

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Approaches to Valuation

Introduction DCF Valuation Relative Valuation Real Option Valuation Conclusion. Approaches to Valuation. Discounted cashflow valuation. Relative valuation.

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Hedge Fund Best Practices: Valuation of Securities

content. Valuation FrameworkValuation CommitteeValuation PoliciesResponsible PersonnelSide Pockets. This presentation serves as a summary of the Best Practices proposed by the President's Working Group on Financial Markets with respect to the valuation of securities. Hedge fund managers should establish a Valuation Framework to provide for clear and consistent valuations of all the investment positions in a fund's portfolio, while minimizing potential problems that may arise in the valuat9443

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Chapter 6 Fixed-Income Securities: Characteristics and Valuation

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VALUATION APPROACHES

VALUATION APPROACHES. Valuations....drive the markets!!!. BSE Sensex. Prologue. In the financial services world, Valuations are used for various purposes For valuing the shares of a company In Mergers & Acquisitions In evaluation of new projects

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Valuation of Mortgage Securities

Valuation of Mortgage Securities. Interest-rate Contingent Securities The Importance of Prepayment Modelling Expected Prepayments Average Prepaid Life Constant Prepayment Rate FHA Experience Public Securities Association (PSA) Model Others. Types of Mortgage Backed Securities.

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VALUATION OF FIXED INCOME SECURITIES OR VALUATION OF BONDS

VALUATION OF FIXED INCOME SECURITIES OR VALUATION OF BONDS. Dr. U. Husain. Structure Introduction Bond valuation Valuation model Bond return Price-yield relationship Bond market The term structure of interest rate (yield curve) Riding the yield curve Duration Immunization.

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Chapter 4: The valuation of long-term securities

Chapter 4: The valuation of long-term securities. Study objectives Distinctions among valuation concepts Bond valuation Preferred stock valuation Common stock valuation Rates of Return. What does it mean?.

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Approaches to valuation Discounted cash flow (DCF) valuation

Valuation plays a key role in many areas of finance: in corporate finance, mergers and acquisitions, and in portfolio management. Palepu and Healy, 2008:

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Chapter 3 Present Value and Securities Valuation

Chapter 3 Present Value and Securities Valuation. The objectives of this chapter are to enable you to:  Value cash flows to be paid in the future  Value series of cash flows, including annuities and perpetuities  Value growing annuities and perpetuities

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VALUATION OF FIXED INCOME SECURITIES

VALUATION OF FIXED INCOME SECURITIES. Bond: A debt instrument with periodic payments of interest and repayment of principal at maturity rM rM rM rM rM rM rM+M |___|____|____|____|____|...…..|___ | 0 1 2 3 4 5 n-1 n

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Mortgage Backed Securities – Valuation and Disclosure Considerations

Mortgage Backed Securities – Valuation and Disclosure Considerations. May 2011 Christina K. Catalina, CPA. Types of Structured Securities.

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Overhead Set#2: VALUATION APPROACHES

Overhead Set#2: VALUATION APPROACHES. 3 Approaches to Valuation: Cost Approach Income Approach Sales Comparison or Market Approach. 1. Cost Approach. a. cost of duplicating property minus depreciation b. most fruitful in engineering or cost-to-cure cases

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Approaches to valuation Discounted cash flow (DCF) valuation

Valuation plays a key role in many areas of finance: in corporate finance, mergers and acquisitions, and in portfolio management. Some myths about valuation: Since valuation models are quantitative, valuation is objective A well-researched and well-done valuation is timeless

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Chapter 9 FIXED INCOME SECURITIES: VALUATION AND RISKS

Chapter 9 FIXED INCOME SECURITIES: VALUATION AND RISKS. Why are bonds viable investment alternatives? What are the risks faced by bond investors? How bonds are priced? What are the basic bond pricing theorems? How can interest rate risk be measured? How can credit risk be evaluated?

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Portfolio Valuation Hard-to-Value Securities

Portfolio Valuation Hard-to-Value Securities. July 30, 2008. Discussion Topics. The Audit Process Around Fair Value Valuation - Leading Practices for Private Investments and Illiquid Securities FAS 157 Overview. The Audit Process Around Fair Value.

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Valuation: Cash Flow-Based Approaches

Valuation: Cash Flow-Based Approaches. Dr. Nancy Mangold California State University, East Bay. Valuation. Security Analyst and Investment Bankers Make buy, sell, or hold recommendations Right Price for IPO Price for a corporate acquisition. Valuation. Economic Theory

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Fixed-Income Securities: Characteristics and Valuation

6. Fixed-Income Securities: Characteristics and Valuation. Introduction. This chapter focuses on the characteristics and valuation of fixed-income securities. Long-term debt Preferred stock. Classification of Long-Term (L-T) Debt. Mortgage bonds secured Debentures unsecured

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Kmart’s Bankruptcy: Valuation of Distressed Securities

Kmart’s Bankruptcy: Valuation of Distressed Securities. Recall: Factors leading to bankruptcy. Competition : primarily with Wal-Mart (“Always Low Prices” vs. "BlueLight Always“) Liquidity : Cash shortage accompanies by a large inventory build-up.

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Chapter 4 The Valuation of Long-Term Securities

Chapter 4 The Valuation of Long-Term Securities. Learning Objectives. After studying Chapter 4, you should be able to: Distinguish among the various terms used to express value. Value bonds, preferred stocks, and common stocks.

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Overhead Set#2: VALUATION APPROACHES

Overhead Set#2: VALUATION APPROACHES. 3 Approaches to Valuation: Cost Approach Income Approach Sales Comparison or Market Approach. 1. Cost Approach. a. cost of duplicating property minus depreciation b. most fruitful in engineering or cost-to-cure cases

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Common Private Company Valuation Approaches

Private companies are those companies whose shares are not listed on public market. Since private companies aren't publicly-traded, they are not required to publicly disclose their financials, making it quite challenging to perform a valuation.

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