1. CHAPTER 8 VALUING BONDS DATA CASE Present By 陳俊諺 郭又勳

2. Issue $50 million of 12% annual coupon bonds with 10-year maturity The Firm anticipates an increase in its bond rating. Compute the additional cash if the rating is increase Determine firm’s current rating and YTM To compute the present value of each year. Spot Rates Additional Cash Rating and Yield Higher Rating

3. Rating By www.standardandpoors.com

4. Treasury Yield + spreads = Firm’s Yield (www.treas.gov) (www.bondsonline.com) Search using the term “yield curve”. Select the nominal rates.

5. Treasury Yield + spreads = Firm’s Yield (www.treas.gov) (www.bondsonline.com) Click “Today’s Market” Click “US Corporate Bond Spreads” 1/100th of a percentage point (0.01%)

6. Treasury Yield + spreads = Firm’s Yield (www.treas.gov) (www.bondsonline.com) Rating1 yr2 yr3 yr5 yr7 yr10 yr30 yr Ba2/BB195205215225245265285 Ba3/BB-205215225235255275295 B1/B+265275285315355395445 B2/B275285295325365405455 B3/B-285295305335375415465 Caa/CCC+450460470495505515545 US Treasury Yield 0.110.280.51.121.712.263.22 X 0.01%2.052.152.252.352.552.752.95 Firm Yield ( Current ) 2.162.432.753.474.265.016.17 X 0.01%1.952.052.152.252.452.652.85 Firm Yield ( Raise ) 2.062.332.653.374.164.916.07

7. The Firm’s Every Yield by Linearly interpolating 1BCDEFGHIJK 21 yr2 yr3 yr4 yr5 yr6 yr7 yr8 yr9 yr10 yr 3 0.110.280.5 1.12 1.71 2.26 4 Firm Yield 52.162.432.753.113.473.8654.264.514.765.01 60.02160.02430.02750.03110.03470.038650.04260.04510.04760.0501 72.062.332.653.013.373.7654.164.414.664.91 80.02060.02330.02650.03010.03370.037650.04160.04410.04660.0491 AVERAGE(D5,F5) H5+((K5-H5)/3) 備註:此估計值是假設線性情況而非實值

8. The Firm’s Yield to Every Year’s Spot Rates Year12345678910 Current SP 0.02160.02430.02750.03110.0347 0.0386 5 0.04260.04510.04760.0501 Raise SP0.02060.02330.02650.03010.0337 0.0376 5 0.04160.04410.04660.0491

9. Using the Spot Rates to Calculate CF-PV Year12345678910 Current SP0.02160.02430.02750.03110.0347 0.0386 5 0.04260.04510.04760.0501 Raise SP0.02060.02330.02650.03010.0337 0.0376 5 0.04160.04410.04660.0491 Cash Flow 60000 00 560000 00 Current CFPV 58731 40 57186 95 55310 27 53082 10 50591 67 47789 88 44805 07 42158 82 39481 34 343464 17 Raise CFPV 58788 95 57298 77 55472 07 53288 53 50836 85 48066 88 45107 05 42482 93 39822 15 346752 15 ( 可利用此公式求各年現金流現值 ) Using the CFPV to Calculate Bond PV Total CF Current CFPV 7926016 7 Raise CFPV 7979163 2 Additional Cash 531466

10. 如果評等提升會產生什麼影響? 1. 從 Data case 發現，將有Additional Cash = 531466 2. 直接影響到公司籌資的進度 (可提升) 3. 增加公司募集的資金，可以去做更多的運用。