SLIDE 1
Equity & Debt Summary Intro Equity Debt: MM Debt: CM Intro - - PDF document
Equity & Debt Summary Intro Equity Debt: MM Debt: CM Intro - - PDF document
Equity & Debt Summary Intro Equity Debt: MM Debt: CM Intro Equity & Debt Asset = E + L Debt Funding Investm CM MM Own Money Disc Int Disc Int Shares Retained earnings Script Dividends Risk of
SLIDE 2
SLIDE 3
3
Debt: MM
Classification
MM Retail Wholesale Discount
- Int. rate
Disc ≈ salary cut (e.g. 10%)
R9010/90 x 100 = 11.1%
- Disc. Rate on FV vs. int. rate on PV
TB PN NCD Repo
Debt: MM (TB)
SARB ABSA TB Cash MM UT TB Cash
TB calcs
SLIDE 4
4
Debt: MM (NCD)
John Sue Investec House Cash Cash Cash MM UT NCD
MM works on TRUST NCD calcs
Debt: MM (Repo)
SARB ABSA Cash + Int ABSA SARB Bonds Bonds Cash Today +1 Week
Repo vs. BsB
SLIDE 5
5
Debt: CM
Classification
CM Disc Int
Fi – Inverse Relationship yield vs. value
Fl Fi
10% =
R1 mil
100 000
10% Coupon
20% =
R500 000
100 000
CM – role in economy
Debt: CM
Secondary Mkt Yields on RSA Gvt Bonds (10 yrs & +) The above are viewed as (credit) risk free yields, used to price
- ther asset classes (e.g. equity at ± 6% premium in LT)
SLIDE 6