Interst Market 10%

Time 30
Coupon 110000
Face Amount 1000000

Coupon (Interest
Year Payable Interest Expense Amortization PV
0 ₱1,094,269.14
1 110000 ₱109,426.91 -₱573.09 ₱1,093,696.06
2 110000 ₱109,369.61 -₱630.39 ₱1,093,065.67
3 110000 ₱109,306.57 -₱693.43 ₱1,092,372.23
4 110000 ₱109,237.22 -₱762.78 ₱1,091,609.45
5 110000 ₱109,160.95 -₱839.05 ₱1,090,770.40
6 110000 ₱109,077.04 -₱922.96 ₱1,089,847.44
7 110000 ₱108,984.74 -₱1,015.26 ₱1,088,832.18
8 110000 ₱108,883.22 -₱1,116.78 ₱1,087,715.40
9 110000 ₱108,771.54 -₱1,228.46 ₱1,086,486.94
10 110000 ₱108,648.69 -₱1,351.31 ₱1,085,135.64
11 110000 ₱108,513.56 -₱1,486.44 ₱1,083,649.20
12 110000 ₱108,364.92 -₱1,635.08 ₱1,082,014.12
13 110000 ₱108,201.41 -₱1,798.59 ₱1,080,215.53
14 110000 ₱108,021.55 -₱1,978.45 ₱1,078,237.09
15 110000 ₱107,823.71 -₱2,176.29 ₱1,076,060.80
16 110000 ₱107,606.08 -₱2,393.92 ₱1,073,666.87
17 110000 ₱107,366.69 -₱2,633.31 ₱1,071,033.56 -₱1,071,033.56
18 110000 ₱107,103.36 -₱2,896.64 ₱1,068,136.92
19 110000 ₱106,813.69 -₱3,186.31 ₱1,064,950.61
20 110000 ₱106,495.06 -₱3,504.94 ₱1,061,445.67
21 110000 ₱106,144.57 -₱3,855.43 ₱1,057,590.24
22 110000 ₱105,759.02 -₱4,240.98 ₱1,053,349.26
23 110000 ₱105,334.93 -₱4,665.07 ₱1,048,684.19
24 110000 ₱104,868.42 -₱5,131.58 ₱1,043,552.61
25 110000 ₱104,355.26 -₱5,644.74 ₱1,037,907.87
26 110000 ₱103,790.79 -₱6,209.21 ₱1,031,698.65
27 110000 ₱103,169.87 -₱6,830.13 ₱1,024,868.52
28 110000 ₱102,486.85 -₱7,513.15 ₱1,017,355.37
29 110000 ₱101,735.54 -₱8,264.46 ₱1,009,090.91
30 110000 ₱100,909.09 -₱9,090.91 ₱1,000,000.00
Rate 9% 5m 4m 3m 2m
Nper 10 PAYMENT 1M 1M 1M
Coupon /
Stated 8%
Par 1000000 0 1 2 3

Year Face Interest Cash Receipt PVIF

1 1000000 80000 100000 180000 0.9174 165137.6
2 900000 72000 100000 172000 0.8417 144769
3 800000 64000 100000 164000 0.7722 126638.1
4 700000 56000 100000 156000 0.7084 110514.3
5 600000 48000 100000 148000 0.6499 96189.85
6 500000 40000 100000 140000 0.5963 83477.43
7 400000 32000 100000 132000 0.5470 72208.52
8 300000 24000 100000 124000 0.5019 62231.42
9 200000 16000 100000 116000 0.4604 53409.62
10 100000 8000 100000 108000 0.4224 45620.37
960196.2 22

203
 1m
1M 1M

4 5

Year Cash Receipt Interest Amortization

0
1 100000 7,512.97 92,487.03
2 100000 - 810.86 100,810.86
3 100000 - 9,883.84 109,883.84
4 100000 - 19,773.39 119,773.39
5 100000 - 30,552.99 130,552.99

24 $8,444.10
21 0.06498567
27 12.11
28 $1,159.19
26
PV
83,477.43
- 9,009.61
- 109,820.47
- 219,704.31
- 339,477.70
- 470,030.69
26 Earning0= 34.5 million
EPS0= 34.5 million / 6 million = $5.75
Retention ratio = 0.7
Current price = $104
ROE=0.13
Dividend growth rate = (0.7)(0.13) = 0.091 (9.1 percent)
Year-end dividend = year-end earning x (1-0.7) = 5.75(1.091)(0.3)=1.8820
Required rate of return = (D1/P0) + g = (1.8820/104) + 0.091 = 0.11 (= 11 perceny)

27 pv of d1 1.758065
pv of d2 1.545395 nper
pv of d3 1.358452 coupon
pv of d4 1.172213 fv
pv of d5 1.011506 pmt
pv of d6 5.259833 semi
12.10546
25 0.065285
 1.881975
104
0.091
0.109096
.11 (= 11 perceny)

20
7.1
106 of par
100
NO GROWTH WITH GROWTH
GROWTH OF
P=D/r P= D(1+g)/(r-g) DIVIDEND Beg D
D= Dividends D= Dividends D1 $ 2.00 5%
R = rate R= rate D2 $ 2.10 5%
G= growth rate D3 $ 2.21 5%
D=2 D4 $ 2.32 5%
r = 10% D=2 D5 $ 2.43 5%
P= 20 r = 10%
g = 0.05
=2/0.1 PRICE OF DIVIDEND Beg D
20 P1 = 2(1+0.05)/(0.1-.05) P0 $ 42.00 5%
42.00 P1 $ 44.10 5%
P2 $ 46.31 5%
P4 = 2*((1+0.05)^5)/(0.1-.05) P3 $ 48.62 5%
51.05 P4 $ 51.05 5%

NONCONSTANT GROWTH

G of D1 = 20%
G of D2 = 15%
G of D3 to ∞ = 5%

Beg D g End D r PV
year 1 1 20% 1.2 20% 1
2 1.2 15% 1.38 20% 0.958333
3 1.38 5% 1.449 20% 10.95652
12.91486
End D
$ 2.10
$ 2.21
$ 2.32
$ 2.43
$ 2.55

End D
$ 44.10
$ 46.31
$ 48.62
$ 51.05
$ 53.60