Should Yum's present valuation be affected by the COVID-19 ?

In school, I learned about the stock market valuation of a company in this week's lecture, that the stock market valuation is not based on its present value, it's based on the number of ordinary shares in issues multiply the current market price. In the society, the COVID-19 is still spreading and continues to be associated with many businesses. Among them, the real industry and the financial sector have been hit hard. Take the Yum brands as an example. In the offline, because of the British government's policy, all restaurants should closed and only the takeaways are allowed. This can affect most of a restaurant's turnover. In the online, the financing of some companies has also been delayed by the COVID-19.

Yum Brands, which owns fast food chains such as KFC, Taco Bell and Pizza Hut, has become the first to invest in bonds since the issuance of bonds was stagnated by the COVID-19 in early March Garbage-grade companies that raise new funds there, it issued $ 600 million of high-yield bonds that mature in five years, with coupon rates as high as 7.75%. On Tuesday, the demand was strong and bond prices rose quickly.

In normal times, such short maturities, such high yields. In my opinion, I won't buy it. Because I think the reason why the Yum brands will issue this bond is that the company needs short-term capital for some reason recently, which also represents that the company's recent operating conditions are not very good, so there is a certain risk of bankruptcy. I might not get the high interest rate that they promised me in five years and I might not even get my principal back. So, in this situation, I'm not going to invest in this bond.

However, the fact that the junk bond was snapped up by investors at this particular time of the COVID-19 may have something to do with government policy, with both the UK and us governments spending large sums to boost the economy. So investors may be bullish on the food industry. I think investors may invest for high yields and think that the Yum brands will not go bankrupt in a short time. That's the only possibility I can think of.

Before investing in a company, we must think about whether its actual value matches the bond value. You can't just look at the high yield what them promised us. 

As companies face the likely timing and severity of restaurant closures and the huge uncertainty that the closure will have on it’s revenue, earnings and liquidity, they are increasing debt levels. The Yum brands’ move is part of a broader dash for cash from corporate treasurers, who have been willing to pay higher borrowing costs to raise funds to see them through the worsening economic downturn. 

But because of the influence of COVID-19, I don't think the company's current situation should be included in the calculation of its present valuation.