Bond Valuation and GGM
by theorangedog on Jan.15, 2008, under Skills
Two new models have been added to the Models page at foquant.com.
The first is the Gordon Growth Model, which is a very simple equity valuation tool. This model features a chart that shows the difference in price dependent upon the dividend growth rate. This is important, because as the growth rate approaches the required rate of return, the value of the equity approaches infinity.
The second is a C++ calculator for a standard coupon bond. The user is asked for inputs concerning the bond, and the value is printed to the screen. Similar to the GGM, this file will also show a range of prices depending upon discount rates, providing almost a high to duration and convexity.
On the topic of the Models page - this page will soon be redesigned. It will be laid out by topic model type, making it easier to view. While this may not seem necessary now as there are only a handful of models, this will be useful as the page grows and the models increase in complexity.
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