Corporate Finance chap024

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公司理财习题库 Chap002

Multiple Choice Questions1. Which of the following is not a characteristic of a money market instrument?A) liquidityB) marketabilityC) long maturityD) liquidity premiumE) C and DAnswer: E Difficulty: EasyRationale: Money market instruments are short-term instruments with high liquidityand marketability; they do not have long maturities nor pay liquidity premiums.2. Which one of the following is not a money market instrument?A) a Treasury billB) a negotiable certificate of depositC) commercial paperD) a Treasury bondE) a Eurodollar accountAnswer: D Difficulty: EasyRationale: Money market instruments are instruments with maturities of one year or less, which applies to all of the above except Treasury bonds. See Table 2.1, page 33.3. T-bills are financial instruments initially sold by ________ to raise funds.A) commercial banksB) the U. S. governmentC) state and local governmentsD) agencies of the federal governmentE) B and DAnswer: B Difficulty: EasyRationale: Only the U. S. government sells T-bills in the primary market.4. The bid price of a T-bill in the secondary market isA) the price at which the dealer in T-bills is willing to sell the bill.B) the price at which the dealer in T-bills is willing to buy the bill.C) greater than the asked price of the T-bill.D) the price at which the investor can buy the T-bill.E) never quoted in the financial press.Answer: B Difficulty: EasyRationale: T-bills are sold in the secondary market via dealers; the bid price quoted in the financial press is the price at which the dealer is willing to buy the bill.5. Commercial paper is a short-term security issued by ________ to raise funds.A) the Federal Reserve BankB) commercial banksC) large, well-known companiesD) the New York Stock ExchangeE) state and local governmentsAnswer: C Difficulty: EasyRationale: Commercial paper is short-term unsecured financing issued directly by large, presumably safe corporations.6. Which one of the following terms best describes Eurodollars:A) dollar-denominated deposits in European banks.B) dollar-denominated deposits at branches of foreign banks in the U. S.C) dollar-denominated deposits at foreign banks and branches of American banksoutside the U. S.D) dollar-denominated deposits at American banks in the U. S.E) dollars that have been exchanged for European currency.Answer: C Difficulty: ModerateRationale: Although originally Eurodollars were used to describe dollar-denominated deposits in European banks, today the term has been extended to apply to anydollar-denominated deposit outside the U. S.7. Deposits of commercial banks at the Federal Reserve Bank are called __________.A) bankers' acceptancesB) repurchase agreementsC) time depositsD) federal fundsE) reserve requirementsAnswer: D Difficulty: EasyRationale: The federal funds are required for the bank to meet reserve requirements, which is a way of influencing the money supply. No substitutes for fed funds arepermitted.8. The interest rate charged by banks with excess reserves at a Federal Reserve Bank tobanks needing overnight loans to meet reserve requirements is called the_________.A) prime rateB) discount rateC) federal funds rateD) call money rateE) money market rateAnswer: C Difficulty: Easy9. Which of the following statements is (are) true regarding municipal bonds?I) A municipal bond is a debt obligation issued by state or local governments.II) A municipal bond is a debt obligation issued by the federal government.III)The interest income from a municipal bond is exempt from federal income taxation.IV)The interest income from a municipal bond is exempt from state and local taxation in the issuing state.A) I and II onlyB) I and III onlyC) I, II, and III onlyD) I, III, and IV onlyE) I and IV onlyAnswer: D Difficulty: ModerateRationale: State and local governments and agencies thereof issue municipal bonds on which the interest income is free from all federal taxes and is exempt from state and local taxation in the issuing state.10. Which of the following statements is true regarding a corporate bond?A) A corporate callable bond gives the holder the right to exchange it for a specifiednumber of the company's common shares.B) A corporate debenture is a secured bond.C) A corporate indenture is a secured bond.D) A corporate convertible bond gives the holder the right to exchange the bond for aspecified number of the company's common shares.E) Holders of corporate bonds have voting rights in the company.Answer: D Difficulty: EasyRationale: Statement D is the only true statement; all other statements describesomething other than the term specified.11. In the event of the firm's bankruptcyA) the most shareholders can lose is their original investment in the firm's stock.B) common shareholders are the first in line to receive their claims on the firm's assets.C) bondholders have claim to what is left from the liquidation of the firm's assets afterpaying the shareholders.D) the claims of preferred shareholders are honored before those of the commonshareholders.E) A and D.Answer: E Difficulty: ModerateRationale: Shareholders have limited liability and have residual claims on assets.Bondholders have a priority claim on assets, and preferred shareholders have priority over common shareholders.12. Which of the following is true regarding a firm's securities?A) Common dividends are paid before preferred dividends.B) Preferred stockholders have voting rights.C) Preferred dividends are usually cumulative.D) Preferred dividends are contractual obligations.E) Common dividends usually can be paid if preferred dividends have been skipped.Answer: C Difficulty: EasyRationale: The only advantages of preferred dividends over common dividends are that preferred dividends must be paid first and any skipped preferred dividends must be paid before common dividends may be paid.13. Which of the following is true of the Dow Jones Industrial Average?A) It is a value-weighted average of 30 large industrial stocks.B) It is a price-weighted average of 30 large industrial stocks.C) The divisor must be adjusted for stock splits.D) A and C.E) B and C.Answer: E Difficulty: EasyRationale: The Dow Jones Industrial Average is a price-weighted index of 30 large industrial firms and the divisor must be adjusted when any of the stocks on the index split.14. Which of the following indices is (are) market-value weighted?I)The New York Stock Exchange Composite IndexII)The Standard and Poor's 500 Stock IndexIII)The Dow Jones Industrial AverageA) I onlyB) I and II onlyC) I and III onlyD) I, II, and IIIE) II and III onlyAnswer: B Difficulty: ModerateRationale: The Dow Jones Industrial Average is a price-weighted index.15. The Dow Jones Industrial Average (DJIA) is computed by:A) adding the prices of 30 large "blue-chip" stocks and dividing by 30.B) calculating the total market value of the 30 firms in the index and dividing by 30.C) adding the prices of the 30 stocks in the index and dividing by a divisor.D) adding the prices of the 500 stocks in the index and dividing by a divisor.E) adding the prices of the 30 stocks in the index and dividing by the value of thesestocks as of some base date period.Answer: C Difficulty: EasyRationale: When the DJIA became a 30-stock index, response A was true; however, as stocks on the index have split and been replaced, the divisor has been adjusted. InJanuary 2003 the divisor was 0.146.Use the following to answer questions 16-18:Consider the following three stocks:Stock Price N um ber of shares outstandingStock A$40 200Stock B$70 500Stock C$10 60016. The price-weighted index constructed with the three stocks isA) 30B) 40C) 50D) 60E) 70Answer: B Difficulty: EasyRationale: ($40 + $70 + $10)/3 = $40.17. The value-weighted index constructed with the three stocks using a divisor of 100 isA) 1.2B) 1200C) 490D) 4900E) 49Answer: C Difficulty: ModerateRationale: The sum of the value of the three stocks divided by 100 is 490: [($40 x 200) + ($70 x 500) + ($10 x 600)] /100 = 490.18. Assume at these prices the value-weighted index constructed with the three stocks is490. What would the index be if stock B is split 2 for 1 and stock C 4 for 1?A) 265B) 430C) 355D) 490E) 1000Answer: D Difficulty: ModerateRationale: Value-weighted indexes are not affected by stock splits.19. The price quotations of Treasury bonds in the Wall Street Journal show an ask price of104:08 and a bid price of 104:04. As a buyer of the bond what is the dollar price you expect to pay?A) $10,480.00B) $10,425.00C) $10,440.00D) $10,412.50E) $10,404.00Answer: B Difficulty: ModerateRationale: You pay the asking price of the dealer, 104 8/32, or 104.25% of $10,000, or $10,425.00.20. An investor purchases one municipal and one corporate bond that pay rates of return of8% and 10%, respectively. If the investor is in the 20% marginal tax bracket, his or her after tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.A) 8% and 10%B) 8% and 8%C) 6.4% and 8%D) 6.4% and 10%E) 10% and 10%Answer: B Difficulty: ModerateRationale: r c = 0.10(1 - 0.20) = 0.08, or 8%; r m = 0.08(1 - 0) = 8%.21. If a Treasury note has a bid price of $975, the quoted bid price in the Wall Street Journalwould beA) 97:50.B) 97:16.C) 97:80.D) 94:24.E) 97:75.Answer: B Difficulty: EasyRationale: Treasuries are quoted as a percent of $1,000 and in 1/32s.22. In calculating the Standard and Poor's stock price indices, the adjustment for stock splitoccurs:A) by adjusting the divisor.B) automatically.C) by adjusting the numerator.D) quarterly, on the last trading day of each quarter.E) none of the above.Answer: B Difficulty: EasyRationale: The calculation of the value-weighted S&P indices includes both price and number of shares of each of the stocks in the index. Thus, the effects of stock splits are automatically incorporated into the calculation.23. Which of the following statements regarding the Dow Jones Industrial Average (DJIA)is false?A) The DJIA is not very representative of the market as a whole.B) The DJIA consists of 30 blue chip stocks.C) The DJIA is affected equally by changes in low and high priced stocks.D) The DJIA divisor needs to be adjusted for stock splits.E) The value of the DJIA is much higher than individual stock prices.Answer: C Difficulty: EasyRationale: The high priced stocks have much more impact on the DJIA than do the lower priced stocks.24. The index that includes the largest number of actively traded stock is:A) the NASDAQ Composite Index.B) the NYSE Composite Index.C) the Wilshire 5000 Index.D) the Value Line Composite Index.E) the Russell Index.Answer: C Difficulty: EasyRationale: The Wilshire 5000 is the largest readily available stock index, consisting of the stocks traded on the organized exchanges and the OTC stocks.25. A 5.5% 20-year municipal bond is currently priced to yield 7.2%. For a taxpayer in the33% marginal tax bracket, this bond would offer an equivalent taxable yield of:A) 8.20%.B) 10.75%.C) 11.40%.D) 4.82%.E) none of the above.Answer: B Difficulty: ModerateRationale: 0.072 = r m (1-t); 0.072 = r m / (0.67); r m = 0.1075 = 10.75%.26. If the market prices of each of the 30 stocks in the Dow Jones Industrial Average (DJIA)all change by the same percentage amount during a given day, which stock will have the greatest impact on the DJIA?A) The stock trading at the highest dollar price per share.B) The stock with total equity has the higher market value.C) The stock having the greatest amount of equity in its capital structure.D) The stock having the lowest volatility.E) All will have an equal impact.Answer: A Difficulty: ModerateRationale: Higher priced stocks affect the DJIA more than lower priced stocks; other choices are not relevant.27. The Value Line Index is an equally weighted geometric average of the return of about1,700 firms. What is the value of an index based on the geometric average returns of three stocks, where the returns on the three stocks during a given period were 20%, -10%, and 5%?A) 4.3%B) 5.0%C) 11.7%D) 13.4%E) 12.2%Answer: A Difficulty: ModerateRationale: [(1.2)(0.9)(1.05)]1/3 - 1 = 4.28%.28. The stocks on the Dow Jones Industrial AverageA) have remained unchanged since the creation of the index.B) include most of the stocks traded on the NYSE.C) are changed occasionally as circumstances dictate.D) consist of stocks on which the investor cannot lose money.E) B and C.Answer: C Difficulty: EasyRationale: The stocks on the DJIA are only a small sample of the entire market, have been changed occasionally since the creation of the index, and one can lose money on any stock. See text box on page 50 for a list of DJIA stock changes.29. Federally sponsored agency debtA) is legally insured by the U. S. Treasury.B) would probably be backed by the U. S. Treasury in the event of a near-default.C) has a small positive yield spread relative to U. S. Treasuries.D) B and C.E) A and C.Answer: D Difficulty: EasyRationale: Federally sponsored agencies, such as the FHLB, are not government owned.These agencies' debt is not insured by the U.S. Treasury, but probably would be backed by the Treasury in the event of an agency near-default. As a result, the issues are very safe and carry a yield only slightly higher than that of U. S. Treasuries.30. Brokers' callsA) are funds used by individuals who wish to buy stocks on margin.B) are funds borrowed by the broker from the bank, with the agreement to repay thebank immediately if requested to do so.C) carry a rate that is usually about one percentage point lower than the rate on U.S.T-bills.D) A and B.E) A and C.Answer: D Difficulty: EasyRationale: Brokers' calls are funds borrowed from banks by brokers and loaned toinvestors in margin accounts.31. A form of short-term borrowing by dealers in government securities isA) reserve requirements.B) repurchase agreements.C) banker's acceptances.D) commercial paper.E) brokers' calls.Answer: B Difficulty: EasyRationale: Repurchase agreements are a form of short-term borrowing where a dealer sells government securities to an investor with an agreement to buy back those same securities at a slightly higher price.32. Which of the following securities is a money market instrument?A) Treasury noteB) Treasury bond.C) municipal bond.D) commercial paper.E) mortgage security.Answer: D Difficulty: EasyRationale: Only commercial paper is a money market security. The others are capital market instruments.33. The call provision in Treasury securitiesI)is used with Treasury Notes.II)is used with Treasury Bonds.III)gives the Treasury the right to repurchase the security at par.IV)gives the Treasury the right to repurchase the security at a premium over par.A) II and III are correct.B) II and IV are correct.C) I, II and III are correct.D) I, II and IV are correct.E) Only II is correct.Answer: A Difficulty: ModerateRationale: Call provisions, giving the Treasury the right to repurchase the security at par, are included in some Treasury Bonds. No callable bonds have been issued since 1984.34. The yield to maturity reported in the financial pages for Treasury securitiesA) is calculated by compounding the semiannual yield.B) is calculated by doubling the semiannual yield.C) is also called the bond equivalent yield.D) is calculated as the yield-to-call for premium bonds.E) Both B and C are true.Answer: E Difficulty: EasyRationale: The yield to maturity shown in the financial pages is an APR calculated by doubling the semi-annual yield.35. Which of the following is not a mortgage-related government or government sponsoredagency?A) The Federal Home Loan BankB) The Federal National Mortgage AssociationC) The U.S. TreasuryD) Freddie MacE) Ginnie MaeAnswer: C Difficulty: EasyRationale: Only the U.S. Treasury issues securities that are not mortgage-backed. 36. The Tax Reform Act of 1986 limited the issue of mortgage revenue and tax-exemptbondsA) to $150 billion per state.B) to the larger of $50 per capita or $150 million per state.C) to the amount outstanding in 1980.D) to maturities of 20 years or less.E) None of the above statements are correct.Answer: B Difficulty: ModerateRationale: The Tax Reform Act of 1986 limited the issue of mortgage revenue and tax exempt bonds for each state to $50 per capita or $150 million in order to limit the drain of potential tax revenue from the Federal Government.37. In order for you to be indifferent between the after tax returns on a corporate bondpaying 8.5% and a tax-exempt municipal bond paying 6.12%, what would your taxbracket need to be?A) 33%B) 72%C) 15%D) 28%E) Cannot tell from the information givenAnswer: D Difficulty: ModerateRationale: .0612 = .085(1-t); (1-t) = 0.72; t = .2838. Which of the following are true about Treasury Bills?A) T-Bills are capital market instruments.B) T-Bills yields are quoted in the financial pages as effective annual rates of return.C At the T-Bill's maturity, the holder receives the face value of the Bill.C) Both A and C are correct.D) All of the above.Answer: D Difficulty: Moderate39. What does the term, “negotiable” mean with regard to negotiable certificates of deposit?A) The CD can be sold to another investor if the owner needs to cash it in before itsmaturity date.B) The rate of interest on the CD is subject to negotiation.C) The CD is automatically reinvested at its maturity date.D) The CD has staggered maturity dates built in.E) The interest rate paid on the CD will vary with a designated market rate.Answer: A Difficulty: Easy40. Freddie Mac and Ginnie Mae were organized to provideA) a primary market for mortgage transactions.B) liquidity for the mortgage market.C) a primary market for farm loan transactions.D) liquidity for the farm loan market.E) a source of funds for government agencies.Answer: B Difficulty: Easy41. The type of municipal bond that is used to finance commercial enterprises such as theconstruction of a new building for a corporation is calledA) a corporate courtesy bond.B) a revenue bond.C) a general obligation bond.D) a tax anticipation note.E) an industrial development bond.Answer: E Difficulty: Easy42. Suppose an investor is considering a corporate bond with a 7.17% before-tax yield and amunicipal bond with a 5.93% before-tax yield. At what marginal tax rate would the investor be indifferent between investing in the corporate and investing in the muni?A) 15.4%B) 23.7%C) 39.5%D) 17.3%E) 12.4%Answer: D Difficulty: ModerateRationale: t m = 1-(5.93%/7.17%) = 17.29%43. An individual can invest in student loan securities by buyingA) Sallie MaesB) Ginnie MaesC) Fanny MaesD) Freddie MacsE) Stacey JoesAnswer: A Difficulty: Easy44. Which of the following are characteristics of preferred stock?I)It pays its holder a fixed amount of income each year, at the discretion of itsmanagers.II)It gives its holder voting power in the firm.III)Its dividends are usually cumulative.IV)Failure to pay dividends may result in bankruptcy proceedings.A) I, III, and IVB) I, II, and IIIC) I and IIID) I, II, and IVE) I, II, III, and IVAnswer: C Difficulty: Moderate45. Bond market indexes can be difficult to construct becauseA) they cannot be based on firms' market values.B) bonds tend to trade infrequently, making price information difficult to obtain.C) there are so many different kinds of bonds.D) prices cannot be obtained for companies that operate in emerging markets.E) corporations are not required to disclose the details of their bond issues.Answer: B Difficulty: Moderate46. With regard to a futures contract, the long position is held byA) the trader who bought the contract at the largest discount.B) the trader who has to travel the farthest distance to deliver the commodity.C) the trader who plans to hold the contract open for the lengthiest time period.D) the trader who commits to purchasing the commodity on the delivery date.E) the trader who commits to delivering the commodity on the delivery date.Answer: D Difficulty: Easy47. In order for you to be indifferent between the after tax returns on a corporate bondpaying 9% and a tax-exempt municipal bond paying 7%, what would your tax bracket need to be?A) 17.6%B) 27%C) 22.2%D) 19.8%E) Cannot tell from the information givenAnswer: C Difficulty: ModerateRationale: .07 = .09(1-t); (1-t) = 0.777; t = .22248. In order for you to be indifferent between the after tax returns on a corporate bondpaying 7% and a tax-exempt municipal bond paying 5.5%, what would your tax bracket need to be?A) 22.6%B) 21.4%C) 26.2%D) 19.8%E) Cannot tell from the information givenAnswer: B Difficulty: ModerateRationale: .055 = .07(1-t); (1-t) = 0.786; t = .21449. An investor purchases one municipal and one corporate bond that pay rates of return of6% and 8%, respectively. If the investor is in the 25% marginal tax bracket, his or her after tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.A) 6% and 8%B) 4.5% and 6%C) 4.5% and 8%D) 6% and 6%E) None of the aboveAnswer: D Difficulty: ModerateRationale: r c = 0.08(1 - 0.25) = 0.06, or 6%; r m = 0.06(1 - 0) = 6%.50. An investor purchases one municipal and one corporate bond that pay rates of return of7.2% and 9.1%, respectively. If the investor is in the 15% marginal tax bracket, his orher after tax rates of return on the municipal and corporate bonds would be ________ and ______, respectively.A) 7.2% and 9.1%B) 7.2% and 7.735%C) 6.12% and 7.735%D) 8.471% and 9.1%E) None of the aboveAnswer: B Difficulty: ModerateRationale: r c = 0.091(1 - 0.15) = 0.07735, or 7.735%; r m = 0.072(1 - 0) = 7.2%.51. For a taxpayer in the 25% marginal tax bracket, a 20-year municipal bond currentlyyielding 5.5% would offer an equivalent taxable yield of:A) 7.33%.B) 10.75%.C) 5.5%.D) 4.125%.E) none of the above.Answer: A Difficulty: ModerateRationale: 0.055= r m(1-t); 0.0733 = r m / 0.75).52. For a taxpayer in the 15% marginal tax bracket, a 15-year municipal bond currentlyyielding 6.2% would offer an equivalent taxable yield of:A) 6.2%.B) 5.27%.C) 8.32%.D) 7.29%.E) none of the above.Answer: D Difficulty: ModerateRationale: 0.062= r m(1-t); 0.062 = r m / (0.85); r m = 0.0729 = 7.29%.53. With regard to a futures contract, the short position is held byA) the trader who bought the contract at the largest discount.B) the trader who has to travel the farthest distance to deliver the commodity.C) the trader who plans to hold the contract open for the lengthiest time period.D) the trader who commits to purchasing the commodity on the delivery date.E) the trader who commits to delivering the commodity on the delivery date.Answer: E Difficulty: Easy54. A call option allows the buyer toA) sell the underlying asset at the exercise price on or before the expiration date.B) buy the underlying asset at the exercise price on or before the expiration date.C) sell the option in the open market prior to expiration.D) A and C.E) B and C.Answer: E Difficulty: EasyRationale: A call option may be exercised (allowing the holder to buy the underlying asset) on or before expiration; the option contract also may be sold prior to expiration.55. A put option allows the holder toA) buy the underlying asset at the striking price on or before the expiration date.B) sell the underlying asset at the striking price on or before the expiration date.C) sell the option in the open market prior to expiration.D) B and C.E) A and C.Answer: D Difficulty: EasyRationale: A put option allows the buyer to sell the underlying asset at the striking price on or before the expiration date; the option contract also may be sold prior to expiration.56. The ____ index represents the performance of the German stock market.A) DAXB) FTSEC) NikkeiD) Hang SengE) None of the aboveAnswer: A Difficulty: Easy57. The ____ index represents the performance of the Japanese stock market.A) DAXB) FTSEC) NikkeiD) Hang SengE) None of the aboveAnswer: C Difficulty: Easy58. The ____ index represents the performance of the U.K. stock market.A) DAXB) FTSEC) NikkeiD) Hang SengE) None of the aboveAnswer: B Difficulty: Easy59. The ____ index represents the performance of the Hong Kong stock market.A) DAXB) FTSEC) NikkeiD) Hang SengE) None of the aboveAnswer: D Difficulty: Easy60. The ultimate small stock index in the U.S. is theA) Wilshire 5000.B) DJIA.C) S&P 500.D) Russell 2000.E) None of the above.Answer: A Difficulty: Easy61. The ____ is an example of a U.S. index of large firms.A) Wilshire 5000B) DJIAC) DAXD) Russell 2000E) All of the aboveAnswer: B Difficulty: Easy62. The ____ is an example of a U.S. index of small firms.A) S&P 500B) DJIAC) DAXD) Russell 2000E) All of the aboveAnswer: D Difficulty: EasyShort Answer QuestionsUse the following to answer questions 63-64:P Q P Q P QStock AStock BStock C63. Based on the information given, for a price-weighted index of the three stocks calculate:a.the rate of return for the first period (t=0 to t=1).b.the value of the divisor in the second period (t=2). Assume that Stock A had a 2-1split during this period.c.the rate of return for the second period (t=1 to t=2).Difficulty: DifficultAnswer:A.The price-weighted index at time 0 is (70+85+105)/3 = 86.67. The price-weightedindex at time 1 is (72+81+98)/3 = 83.67. The return on the index is 83.67/86.67 – 1 = -3.46%.B.The divisor must change to reflect the stock split. Because nothing elsefundamentally changed, the value of the index should remain 83.67. So the newdivisor is (36+81+98)/83.67 = 2.57. The index value is (36+81+98)/2.57 = 83.67.C.The rate of return for the second period is 83.67/83.67-1 = 0.00%64. Based on the information given for the three stocks, calculate the first-period rates ofreturn (from t=0 to t=1) ona. a market-value-weighted index.b.an equally-weighted index.c. a geometric index.Difficulty: DifficultAnswer:A.The total market value at time 0 is $70*200 + $85*500 + $105*300 = $88,000. Thetotal market value at time 1 is $72*200 + $81*500 + $98*300 = $84,300. The return is $84,300/$88,000 – 1 = -4.20%.B.The return on Stock A for the first period is $72/$70-1 = 2.86%. The return onStock B for the first period is $81/$85-1 = -4.71%. The return on Stock C for thefirst period is $98/$105-1 = -6.67%. The return on an equally weighted index of the three stocks is (2.86%-4.71%-6.67%)/3 = -2.84%.C.The geometric average return is [(1+.0286)(1-.0471)(1-.0667)](1/3)-1 =[(1.0286)(0.9529)(0.9333)]0.3333 -1 = -2.92%。

《Corporate Finance (公司金融学)》课件 (2)

Balance Sheet Analysis
• When analyzing a balance sheet, the financial manager should be aware of three concerns:
1. Accounting liquidity 2. Debt versus equity 3. Value versus cost
Sources of Information
• Annual reports • Wall Street Journal • Internet
– NYSE () – Nasdaq () – Text (/cj)
• SEC
– EDGAR – 10K & 10Q reports
Total operating revenues Cost of goods sold Selling, general, and administrative expenses Depreciation Operating income Other income Earnings before interest and taxes Interest expense Pretax income Taxes
Current: $71 Deferred: $13 Net income Retained earnings: Dividends:
$2,262 - 1,655
- 327 - 90 $190 29 $219 - 49 $170 - 84
$86 $43 $43
U.S.C.C. Income Statement
Accounting Liquidity
• Refers to the ease and quickness with which assets can be converted to cash.

Chapter 24 Corporate Finance 公司理财机械工业出版社 Ross PPT课件

The value of convertible bonds
Option value • Figure 24.3. • The bottom portion of the figure implies that the value of a convertible bond is the maximum of its straight bond value and its conversion value, plus its option value: • Value of convertible bond = The greater of (straight bond value, conversion value) + Option value. • Example
The value of convertible bonds
Straight Bond Value • The straபைடு நூலகம்ght bond value is what the convertible bonds would sell for if they could not be converted into common stock. • It will depend on the general level of interest rates and on the default risk. • The straight bond value of a convertible bond is a minimum value. Figure 24.2.
The difference between warrants and call options
The preceding implies that the BlackScholes model must be adjusted for warrants.

公司财务原理Principles of Corporate Finance(11th edition)_课后习题答案Chap002

CHAPTER 2How to Calculate Present ValuesAnswers to Problem Sets1. If the discount factor is .507, then .507 x 1.126 = $1.Est time: 01-052. DF x 139 = 125. Therefore, DF =125/139 = .899.Est time: 01-053. PV = 374/(1.09)9 = 172.20.Est time: 01-054. PV = 432/1.15 + 137/(1.152) + 797/(1.153) = 376 + 104 + 524 = $1,003.Est time: 01-055. FV = 100 x 1.158 = $305.90.Est time: 01-056. NPV = −1,548 + 138/.09 = −14.67 (cost today plus the present value of theperpetuity).Est time: 01-057. PV = 4/(.14 − .04) = $40.Est time: 01-058. a. PV = 1/.10 = $10.b. Since the perpetuity will be worth $10 in year 7, and since that is roughlydouble the present value, the approximate PV equals $5.You must take the present value of years 1–7 and subtract from the totalpresent value of the perpetuity:PV = (1/.10)/(1.10)7 = 10/2= $5 (approximately).c. A perpetuity paying $1 starting now would be worth $10, whereas aperpetuity starting in year 8 would be worth roughly $5. The differencebetween these cash flows is therefore approximately $5. PV = $10 – $5=$5 (approximately).d. PV = C/(r−g) = 10,000/(.10-.05) = $200,000.Est time: 06-109. a. PV = 10,000/(1.055) = $7,835.26 (assuming the cost of the car does notappreciate over those five years).b. The six-year annuity factor [(1/0.08) – 1/(0.08 x (1+.08)6)] = 4.623. Youneed to set aside (12,000 × six-year annuity factor) = 12,000 × 4.623 =$55,475.c. At the end of six years you would have 1.086 × (60,476 - 55,475) = $7,935. Est time: 06-1010. a. FV = 1,000e.12 x 5 = 1,000e.6 = $1,822.12.b. PV = 5e−.12 x 8 = 5e-.96 = $1.914 million.c. PV = C (1/r– 1/re rt) = 2,000(1/.12 – 1/.12e.12 x15) = $13,912.Est time: 01-0511.a. FV = 10,000,000 x (1.06)4 = 12,624,770.b. FV = 10,000,000 x (1 + .06/12)(4 x 12) = 12,704,892.c. FV = 10,000,000 x e(4 x .06) = 12,712,492.Est time: 01-0512.a. PV = $100/1.0110 = $90.53.b. PV = $100/1.1310 = $29.46.c. PV = $100/1.2515 = $3.52.d. PV = $100/1.12 + $100/1.122 + $100/1.123 = $240.18.Est time: 01-05 13. a.⇒=+=0.905r 11DF 11r 1 = 0.1050 = 10.50%.b. 0.819.(1.105)1)r (11DF 2222==+=c. AF 2 = DF 1 + DF 2 = 0.905 + 0.819 = 1.724.d.PV of an annuity = C ⨯ [annuity factor at r % for t years]. Here:$24.65 = $10 ⨯ [AF 3]AF 3 = 2.465e. AF 3 = DF 1 + DF 2 + DF 3 = AF 2 + DF 32.465 = 1.724 + DF 3DF 3 = 0.741Est time: 06-1014. The present value of the 10-year stream of cash inflows is:6$886,739.6(1.14)0.1410.141 $170,000PV 10=⎥⎦⎤⎢⎣⎡⨯-⨯= Thus:NPV = –$800,000 + $886,739.66 = +$86,739.66At the end of five years, the factory’s value will be the present value of the fiveremaining $170,000 cash flows:6$583,623.7(1.14)0.1410.141 $170,000PV 5=⎥⎦⎤⎢⎣⎡⨯-⨯= Est time: 01-0515.$23,696.151.12$50,0001.12$68,0001.12$80,0001.12$92,0001.12$92,000 1.12$85,0001.12$80,0001.12$75,0001.12$57,0001.12$50,000$380,000(1.12)C NPV 109876543210t t t =++++++++++-==∑=0Est time: 01-0516.a.Let S t = salary in year t.∑=-=301t t1t (1.08)(1.05)40,000PV 3$760,662.5(1.08).05)-(.08(1.05).05)-(.081 43030=⎥⎦⎤⎢⎣⎡⨯-⨯=000,0b.PV(salary) x 0.05 = $38,033.13Future value = $38,033.13 x (1.08)30 = $382,714.30c.$38,980.30 (1.08)0.0810.081$C (1.08)0.0810.081 C $r)(1r 1r 1 C PV 2020t =⎥⎥⎦⎤⎢⎢⎣⎡⨯-=⎥⎦⎤⎢⎣⎡⨯-⨯=⎥⎦⎤⎢⎣⎡+⨯-⨯=382,714.30382,714.30Est time: 06-10 17.Period Present Value 0-400,000.001 +100,000/1.12 = +89,285.712 +200,000/1.122 = +159,438.783+300,000/1.123 = +213,534.07Total = NPV = $62,258.56Est time: 01-0518.We can break this down into several different cash flows, such that the sum ofthese separate cash flows is the total cash flow. Then, the sum of the present values of the separate cash flows is the present value of the entire project. (All dollar figures are in millions.) ▪ Cost of the ship is $8 million PV = -$8 million▪Revenue is $5 million per year, and operating expenses are $4 million. Thus, operating cash flow is $1 million per year for 15 years.million. million $$8.559(1.08)0.0810.081 115=⎥⎦⎤⎢⎣⎡⨯-⨯=PV ▪ Major refits cost $2 million each and will occur at times t = 5 and t = 10. PV = (-$2 million)/1.085 + (-$2 million)/1.0810 = -$2.288 million. ▪Sale for scrap brings in revenue of $1.5 million at t = 15. PV = $1.5 million/1.0815 = $0.473 million.Adding these present values gives the present value of the entire project:NPV = -$8 million + $8.559 million - $2.288 million + $0.473 million NPV = -$1.256 millionEst time: 06-1019. a. PV = $100,000.b. PV = $180,000/1.125 = $102,136.83.c. PV = $11,400/0.12 = $95,000.d. 4.$107,354.2(1.12)0.1210.121 $19,000PV 10=⎥⎦⎤⎢⎣⎡⨯-⨯=e. PV = $6,500/(0.12 - 0.05) = $92,857.14.Prize (d) is the most valuable because it has the highest present value.Est time: 01-0520.Mr. Basset is buying a security worth $20,000 now, which is its present value. The unknown is the annual payment. Using the present value of an annuity formula, we have:$2,653.90 (1.08)0.0810.081000,20$C (1.08)0.0810.081 C 000,20$r)(1r 1r 1 C PV 1212t =⎥⎥⎦⎤⎢⎢⎣⎡⨯-=⎥⎦⎤⎢⎣⎡⨯-⨯=⎥⎦⎤⎢⎣⎡+⨯-⨯=Est time: 01-0521. Assume the Zhangs will put aside the same amount each year. One approach tosolving this problem is to find the present value of the cost of the boat and then equate that to the present value of the money saved. From this equation, we can solve for the amount to be put aside each year.PV(boat) = $20,000/(1.10)5 = $12,418PV(savings) = annual savings ⎥⎦⎤⎢⎣⎡⨯-⨯5(1.10)0.1010.101 Because PV(savings) must equal PV(boat):Annual savings 418,12$ =⎥⎦⎤⎢⎣⎡⨯-⨯5(1.10)0.1010.101 Annual savings $3,276(1.10)0.1010.101$12,4185=⎥⎦⎤⎢⎣⎡⨯-= Another approach is to use the future value of an annuity formula:$20,0005.10)(1 savings Annual =⎥⎥⎦⎤⎢⎢⎣⎡-+⨯10.1 Annual savings = $ 3,276Est time: 06-1022.The fact that Kangaroo Autos is offe ring “free credit” tells us what the cash payments are; it does not change the fact that money has time value. A 10% annual rate of interest is equivalent to a monthly rate of 0.83%:r monthly = r annual /12 = 0.10/12 = 0.0083 = 0.83%The present value of the payments to Kangaroo Autos is:8$8,93(1.0083)0.008310.00831$300$1,00030=⎥⎦⎤⎢⎣⎡⨯-⨯+ A car from Turtle Motors costs $9,000 cash. Therefore, Kangaroo Autosoffers the better deal, i.e., the lower present value of cost.Est time: 01-05 23.The NPVs are: at 5%$117,687(1.05)$870,0001.05$30,000$700,000NPV 2=+--=⇒ at 10% $46,281(1.10)870,0001.10$30,000$700,000NPV 2=+--=⇒at 15% $16,068(1.15)870,0001.15$30,000$700,000NPV 2-=+--=⇒ The figure below shows that the project has zero NPV at about 13.5%.As a check, NPV at 13.5% is:$1.78(1.135)870,0001.135$30,000$700,000NPV 2-=+--=Est time: 06-10 24.a.This is the usual perpetuity, and hence:$1,428.570.07$100r C PV ===b. This is worth the PV of stream (a) plus the immediate payment of $100:PV = $100 + $1,428.57 = $1,528.57c.The continuously compounded equivalent to a 7% annually compoundedrate is approximately 6.77%, because:Ln(1.07) = 0.0677 ore 0.0677 = 1.0700 Thus:$1,477.100.0677$100r C PV ===Note that the pattern of payments in part (b) is more valuable than the pattern of payments in part (c). It is preferable to receive cash flows at the start of every year than to spread the receipt of cash evenly over the year; with the former pattern of payment, you receive the cash more quickly.Est time: 06-1025. a. PV = $1 billion/0.08 = $12.5 billion.b. PV = $1 billion/(0.08 – 0.04) = $25.0 billion.c. billion. $9.818(1.08)0.0810.081billion $1PV 20=⎥⎦⎤⎢⎣⎡⨯-⨯= d.The continuously compounded equivalent to an 8% annually compounded rate is approximately 7.7%, because:Ln(1.08) = 0.0770 ore 0.0770 = 1.0800 Thus:billion $10.203e 0.07710.0771billion $1PV )(0.077)(20=⎥⎦⎤⎢⎣⎡⨯-⨯= This result is greater than the answer in Part (c) because the endowmentis now earning interest during the entire year.Est time: 06-1026. With annual compounding: FV = $100 ⨯ (1.15)20 = $1,636.65.With continuous compounding: FV = $100 ⨯ e (0.15×20) = $2,008.55.Est time: 01-0527. One way to approach this problem is to solve for the present value of:(1) $100 per year for 10 years, and(2) $100 per year in perpetuity, with the first cash flow at year 11.If this is a fair deal, these present values must be equal, and thus we can solve for the interest rate (r ).The present value of $100 per year for 10 years is:⎥⎦⎤⎢⎣⎡+⨯-⨯=10r)(1(r)1r 1$100PV The present value, as of year 10, of $100 per year forever, with the first paymentin year 11, is: PV 10 = $100/r . At t = 0, the present value of PV 10 is:⎥⎦⎤⎢⎣⎡⨯⎥⎦⎤⎢⎣⎡+=r $100r)(11PV 10 Equating these two expressions for present value, we have:⎥⎦⎤⎢⎣⎡⨯⎥⎦⎤⎢⎣⎡+=⎥⎦⎤⎢⎣⎡+⨯-⨯r $100r)(11r)(1(r)1r 1$1001010 Using trial and error or algebraic solution, we find that r = 7.18%.Est time: 06-1028. Assume the amount invested is one dollar.Let A represent the investment at 12%, compounded annually.Let B represent the investment at 11.7%, compounded semiannually. Let C represent the investment at 11.5%, compounded continuously.After one year:FV A = $1 ⨯ (1 + 0.12)1= $1.1200FV B = $1 ⨯ (1 + 0.0585)2 = $1.1204 FV C = $1 ⨯ e (0.115 ⨯ 1)= $1.1219After five years:FV A = $1 ⨯ (1 + 0.12)5= $1.7623FV B = $1 ⨯ (1 + 0.0585)10 = $1.7657 FV C = $1 ⨯ e (0.115 ⨯ 5)= $1.7771 After twenty years:FV A = $1 ⨯ (1 + 0.12)20= $9.6463FV B = $1 ⨯ (1 + 0.0585)40 = $9.7193 FV C = $1 ⨯ e (0.115 ⨯ 20)= $9.9742 The preferred investment is C.Est time: 06-1029.Because the cash flows occur every six months, we first need to calculate the equivalent semiannual rate. Thus, 1.08 = (1 + r /2)2 => r = 7.846 semiannually compounded APR. Therefore the rate for six months is 7.846/2, or 3.923%:147,846039231039230103923010001000001009$).(..,$,$PV =⎥⎦⎤⎢⎣⎡⨯-⨯+=Est time: 06-1030. a. Each installment is: $9,420,713/19 = $495,827.$4,761,724(1.08)0.0810.081$495,827PV 19=⎥⎦⎤⎢⎣⎡⨯-⨯=b.If ERC is willing to pay $4.2 million, then:⎥⎦⎤⎢⎣⎡+⨯-⨯=19r)(1r 1r 1$495,827$4,200,000 Using Excel or a financial calculator, we find that r = 9.81%.Est time: 06-10 31. a.3$402,264.7(1.08)0.0810.081$70,000PV 8=⎥⎦⎤⎢⎣⎡⨯-⨯=b.Year Beginning-of-Year Balance ($) Year-End Interest on Balance ($) Total Year-End Payment ($) Amortization of Loan ($) End-of-Year Balance ($) 1 402,264.73 32,181.18 70,000.00 37,818.82 364,445.91 2 364,445.91 29,155.67 70,000.00 40,844.33 323,601.58 3 323,601.58 25,888.13 70,000.00 44,111.87 279,489.71 4 279,489.71 22,359.18 70,000.00 47,640.82 231,848.88 5 231,848.88 18,547.91 70,000.00 51,452.09 180,396.79 6 180,396.79 14,431.74 70,000.00 55,568.26 124,828.54 7 124,828.54 9,986.28 70,000.00 60,013.72 64,814.82864,814.825,185.1970,000.0064,814.810.01Est time: 06-1032. This is an annuity problem with the present value of the annuity equal to$2 million (as of your retirement date), and the interest rate equal to 8%with 15 time periods. Thus, your annual level of expenditure (C) is determined as follows:$233,659 (1.08)0.0810.081$2,000,000C (1.08)0.0810.081 C $2,000,000r)(1r 1r 1 C PV 1515t =⎥⎥⎦⎤⎢⎢⎣⎡⨯-=⎥⎦⎤⎢⎣⎡⨯-⨯=⎥⎦⎤⎢⎣⎡+⨯-⨯=With an inflation rate of 4% per year, we will still accumulate $2 million as of ourretirement date. However, because we want to spend a constant amount per year in real terms (R, constant for all t ), the nominal amount (C t ) must increase each year. For each year t : R = C t /(1 + inflation rate)t Therefore:PV [all C t ] = PV [all R ⨯ (1 + inflation rate)t ] = $2,000,000$2,000,0000.08)(1.04)0(1....08)0(10.04)(10.08)(1.04)0(1R 15152211=⎥⎦⎤⎢⎣⎡+++++++++⨯ R ⨯ [0.9630 + 0.9273 + . . . + 0.5677] = $2,000,000 R ⨯ 11.2390 = $2,000,000 R = $177,952Alternatively, consider that the real rate is.03846.1=-++0.04)(1.08)0(1 Then, redoingthe steps above using the real rate gives a real cash flow equal to:$177,952=⎥⎥⎦⎤⎢⎢⎣⎡⨯-= (1.03846)0.0384610.038461$2,000,000C 15Thus C 1 = ($177,952 ⨯ 1.04) = $185,070, C 2 = $192,473, etc.Est time: 11-15 33. a.9$430,925.8(1.055)0.05510.0551$50,000PV 12=⎥⎦⎤⎢⎣⎡⨯-⨯=b.The annually compounded rate is 5.5%, so the semiannual rate is:(1.055)(1/2) – 1 = 0.0271 = 2.71%Since the payments now arrive six months earlier than previously:PV = $430,925.89 × 1.0271 = $442,603.98Est time: 06-1034. In three years, the balance in the mutual fund will be:FV = $1,000,000 × (1.035)3 = $1,108,718The monthly shortfall will be: $15,000 – ($7,500 + $1,500) = $6,000. Annual withdrawals from the mutual fund will be: $6,000 × 12 = $72,000. Assume the first annual withdrawal occurs three years from today, when the balance in the mutual fund will be $1,108,718. Treating the withdrawals as an annuity due, we solve for t as follows:r)(1r)(1r 1r 1C PV t +⨯⎥⎦⎤⎢⎣⎡+⨯-⨯= 1.035(1.035)0.03510.0351$72,000$1,108,718t ⨯⎥⎦⎤⎢⎣⎡⨯-⨯= Using Excel or a financial calculator, we find that t = 21.38 years.Est time: 06-10 35. a. PV = 2/.12 = $16.667 million.b. PV = 939.14$=⎥⎦⎤⎢⎣⎡⨯-⨯20(1.12)0.1210.121$2million.c. PV = 2/(.12-.03) = $22.222 milliond. PV = 061.18$=⎥⎦⎤⎢⎣⎡⨯-⨯2020(1.12).03)-(0.12 1.03.03)-(0.121$2million.Est time: 06-1036. a. First we must determine the 20-year annuity factor at a 6% interest rate.20-year annuity factor = [1/.06 – 1/.06(1.06)20) = 11.4699.Once we have the annuity factor, we can determine the mortgagepayment.Mortgage payment = $200,000/11.4699 = $17,436.91.b.c. Nearly 69% of the initial loan payment goes toward interest($12,000/$17,436.79 = .6882). Of the last payment, only 6% goestoward interest (987.24/17,436.79 = .06).After 10 years, $71,661.21 has been paid off ($200,000 – remainingbalance of $128,338.79). This represents only 36% of the loan. Thereason that less than half of the loan has paid off during half of its lifeis due to compound interest.Est time: 11-1537. a. Using the Rule of 72, the time for money to double at 12% is 72/12,or six years. More precisely, if x is the number of years for money todouble, then:(1.12)x = 2Using logarithms, we find:x (ln 1.12) = ln 2 x = 6.12 yearsb.With continuous compounding for interest rate r and time period x :e rx = 2Taking the natural logarithm of each side:rx = ln(2) = 0.693Thus, if r is expressed as a percent, then x (the time for money to double) is: x = 69.3/(interest rate, in percent).Est time: 06-10 38.Spreadsheet exercise.Est time: 11-1539.. a. This calls for the growing perpetuity formula with a negative growth rate(g = –0.04):million $14.290.14million$20.04)(0.10million $2PV ==--=b.The pipeline’s value at year 20 (i.e., at t = 20), assuming its cash flows lastforever, is:gr g)(1C g r C PV 2012120-+=-= With C 1 = $2 million, g = –0.04, and r = 0.10:million $6.3140.14million$0.8840.140.04)(1million)($2PV 2020 ==-⨯=Next, we convert this amount to PV today, and subtract it from the answerto Part (a):million $13.35(1.10)million$6.314million $14.29PV 20=-=Est time: 06-10。

公司理财Corporate_Finance_第九版_CASE答案(完整资料).doc

【最新整理，下载后即可编辑】Case SolutionsFundamentals of Corporate FinanceRoss, Westerfield, and Jordan9th editionCHAPTER 1THE McGEE CAKE COMPANY1.The advantages to a LLC are: 1) Reduction of personal liability. A soleproprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have increased credibility in the business world compared to a sole proprietorship. 4) Ability to attract investment. Corporations, even LLCs, can raise capital through the sale of equity. 5) Continuous life. Sole proprietorships have a limited life, while corporations have a potentially perpetual life. 6) Transfer of ownership. It is easier to transfer ownership in a corporation through the sale of stock.The biggest disadvantage is the potential cost, although the cost of forminga LLC can be relatively small. There are also other potential costs, includingmore expansive record-keeping.2.Forming a corporation has the same advantages as forming a LLC, but thecosts are likely to be higher.3.As a small company, changing to a LLC is probably the most advantageousdecision at the current time. If the company grows, and Doc and Lyn are willing to sell more equity ownership, the company can reorganize as a corporation at a later date. Additionally, forming a LLC is likely to be less expensive than forming a corporation.CHAPTER 2CASH FLOWS AND FINANCIAL STATEMENTS AT SUNSET BOARDS Below are the financial statements that you are asked to prepare.1.The income statement for each year will look like this:Income statement2008 2009Sales $247,259 $301,392Cost of goods sold 126,038 159,143Selling & administrative 24,787 32,352Depreciation 35,581 40,217EBIT $60,853 $69,680Interest 7,735 8,866EBT $53,118 $60,814Taxes 10,624 12,163Net income $42,494 $48,651Dividends $21,247 $24,326Addition to retainedearnings 21,247 24,3262.The balance sheet for each year will be:Balance sheet as of Dec. 31, 2008C-26 CASE SOLUTIONSCash $18,187 Accounts payable $32,143 Accountsreceivable 12,887 Notes payable 14,651 Inventory 27,119 Current liabilities $46,794 Current assets $58,193Long-term debt $79,235 Net fixed assets $156,975 Owners' equity 89,139Total assets $215,168 Total liab. &equity $215,168In the first year, equity is not given. Therefore, we must calculate equity as a plug variable. Since total liabilities & equity is equal to total assets, equity can be calculated as:Equity = $215,168 – 46,794 – 79,235Equity = $89,139CHAPTER 2 C-5Balance sheet as of Dec. 31, 2009Cash $27,478 Accounts payable $36,404 Accountsreceivable 16,717 Notes payable 15,997 Inventory 37,216 Current liabilities $52,401 Current assets $81,411Long-term debt $91,195 Net fixed assets $191,250 Owners' equity 129,065Total assets $272,661 Total liab. &equity $272,661The owner’s equity for 2009 is the beginning of year owner’s equity, plus the addition to retained earnings, plus the new equity, so:Equity = $89,139 + 24,326 + 15,600Equity = $129,065ing the OCF equation:OCF = EBIT + Depreciation – TaxesThe OCF for each year is:OCF2008 = $60,853 + 35,581 – 10,624OCF2008 = $85,180OCF2009 = $69,680 + 40,217 – 12,163OCF2009 = $97,734C-26 CASE SOLUTIONS4.To calculate the cash flow from assets, we need to find the capital spendingand change in net working capital. The capital spending for the year was: Capital spendingEnding net fixed assets $191,250– Beginning net fixedassets 156,975+ Depreciation 40,217Net capital spending $74,492And the change in net working capital was:Change in net working capitalEnding NWC $29,010– Beginning NWC 11,399Change in NWC $17,611CHAPTER 2 C-5 So, the cash flow from assets was:Cash flow from assetsOperating cash flow $97,734– Net capital spending 74,492– Change in NWC 17,611Cash flow from assets $ 5,6315.The cash flow to creditors was:Cash flow to creditorsInterest paid $8,866– Net new borrowing 11,960Cash flow to creditors –$3,0946.The cash flow to stockholders was:Cash flow tostockholdersDividends paid $24,326– Net new equityraised 15,600Cash flow tostockholders $8,726Answers to questions1.The firm had positive earnings in an accounting sense (NI > 0) and hadpositive cash flow from operations. The firm invested $17,611 in new netC-26 CASE SOLUTIONSworking capital and $74,492 in new fixed assets. The firm gave $5,631 to its stakeholders. It raised $3,094 from bondholders, and paid $8,726 to stockholders.2.The expansion plans may be a little risky. The company does have a positivecash flow, but a large portion of the operating cash flow is already going to capital spending. The company has had to raise capital from creditors and stockholders for its current operations. So, the expansion plans may be too aggressive at this time. On the other hand, companies do need capital to grow. Before investing or loaning the company money, you would want to know where the current capital spending is going, and why the company is spending so much in this area already.CHAPTER 3RATIOS ANALYSIS AT S&S AIR1.The calculations for the ratios listed are:Current ratio = $2,186,520 / $2,919,000Current ratio = 0.75 timesQuick ratio = ($2,186,250 – 1,037,120) / $2,919,000Quick ratio = 0.39 timesCash ratio = $441,000 / $2,919,000Cash ratio = 0.15 timesTotal asset turnover = $30,499,420 / $18,308,920Total asset turnover = 1.67 timesInventory turnover = $22,224,580 / $1,037,120Inventory turnover = 21.43 timesReceivables turnover = $30,499,420 / $708,400Receivables turnover = 43.05 timesTotal debt ratio = ($18,308,920 – 10,069,920) / $18,308,920 Total debt ratio = 0.45 timesDebt-equity ratio = ($2,919,000 + 5,320,000) / $10,069,920C-26 CASE SOLUTIONSDebt-equity ratio = 0.82 timesEquity multiplier = $18,308,920 / $10,069,920Equity multiplier = 1.82 timesTimes interest earned = $3,040,660 / $478,240Times interest earned = 6.36 timesCash coverage = ($3,040,660 + 1,366,680) / $478,420 Cash coverage = 9.22 timesProfit margin = $1,537,452 / $30,499,420Profit margin = 5.04%Return on assets = $1,537,452 / $18,308,920Return on assets = 8.40%Return on equity = $1,537,452 / $10,069,920Return on equity = 15.27%CHAPTER 3 C-11 2. Boeing is probably not a good aspirant company. Even though bothcompanies manufacture airplanes, S&S Air manufactures small airplanes, while Boeing manufactures large, commercial aircraft. These are two different markets. Additionally, Boeing is heavily involved in the defense industry, as well as Boeing Capital, which finances airplanes.Bombardier is a Canadian company that builds business jets, short-range airliners and fire-fighting amphibious aircraft and also provides defense-related services. It is the third largest commercial aircraft manufacturer in the world. Embraer is a Brazilian manufacturer than manufactures commercial, military, and corporate airplanes. Additionally, the Brazilian government is a part owner of the company. Bombardier and Embraer are probably not good aspirant companies because of the diverse range of products and manufacture of larger aircraft.Cirrus is the world's second largest manufacturer of single-engine, piston-powered aircraft. Its SR22 is the world's best selling plane in its class. The company is noted for its innovative small aircraft and is a good aspirant company.Cessna is a well known manufacturer of small airplanes. The company produces business jets, freight- and passenger-hauling utility Caravans, personal and small-business single engine pistons. It may be a good aspirant company, however, its products could be considered too broad and diversified since S&S Air produces only small personal airplanes.3. S&S is below the median industry ratios for the current and cash ratios.This implies the company has less liquidity than the industry in general.However, both ratios are above the lower quartile, so there are companiesC-26 CASE SOLUTIONSin the industry with lower liquidity ratios than S&S Air. The company may have more predictable cash flows, or more access to short-term borrowing.If you created an Inventory to Current liabilities ratio, S&S Air would havea ratio that is lower than the industry median. The current ratio is below theindustry median, while the quick ratio is above the industry median. This implies that S&S Air has less inventory to current liabilities than the industry median. S&S Air has less inventory than the industry median, but more accounts receivable than the industry since the cash ratio is lower than the industry median.The turnover ratios are all higher than the industry median; in fact, all three turnover ratios are above the upper quartile. This may mean that S&S Air is more efficient than the industry.The financial leverage ratios are all below the industry median, but above the lower quartile. S&S Air generally has less debt than comparable companies, but still within the normal range.The profit margin, ROA, and ROE are all slightly below the industry median, however, not dramatically lower. The company may want to examine its costs structure to determine if costs can be reduced, or price can be increased.Overall, S&S Air’s performance seems good, although the liquidity ratios indicate that a closer look may be needed in this area.CHAPTER 3 C-11 Below is a list of possible reasons it may be good or bad that each ratio is higher or lower than the industry. Note that the list is not exhaustive, but merely one possible explanation for each ratio.Ratio Good BadCurrent ratio Better at managingcurrent accounts. May be having liquidity problems.Quick ratio Better at managingcurrent accounts. May be having liquidity problems.Cash ratio Better at managingcurrent accounts. May be having liquidity problems.Total asset turnover Better at utilizing assets. Assets may be older anddepreciated, requiringextensive investmentsoon.Inventory turnover Better at inventorymanagement, possibly dueto better procedures.Could be experiencinginventory shortages.Receivables turnover Better at collectingreceivables.May have credit termsthat are too strict.Decreasing receivablesturnover may increasesales.Total debt ratio Less debt than industrymedian means thecompany is less likely toexperience creditproblems. Increasing the amount of debt can increase shareholder returns. Especially notice that it will increase ROE.Debt-equity Less debt than industry Increasing the amount ofC-26 CASE SOLUTIONSratio median means thecompany is less likely toexperience creditproblems. debt can increase shareholder returns. Especially notice that it will increase ROE.Equity multiplier Less debt than industrymedian means thecompany is less likely toexperience creditproblems.Increasing the amount ofdebt can increaseshareholder returns.Especially notice that itwill increase ROE.TIE Higher quality materialscould be increasing costs. The company may have more difficulty meeting interest payments in a downturn.Cash coverage Less debt than industrymedian means thecompany is less likely toexperience creditproblems. Increasing the amount of debt can increase shareholder returns. Especially notice that it will increase ROE.Profit margin The PM is slightly belowthe industry median. Itcould be a result of higherquality materials or bettermanufacturing. Company may be having trouble controlling costs.ROA Company may have newerassets than the industry. Company may have newer assets than the industry.ROE Lower profit margin maybe a result of higherquality. Profit margin and EM are lower than industry, which results in the lower ROE.CHAPTER 4PLANNING FOR GROWTH AT S&S AIR1.To calculate the internal growth rate, we first need to find the ROA and theretention ratio, so:ROA = NI / TAROA = $1,537,452 / $18,309,920ROA = .0840 or 8.40%b = Addition to RE / NIb = $977,452 / $1,537,452b = 0.64Now we can use the internal growth rate equation to get:Internal growth rate = (ROA × b) / [1 – (ROA × b)]Internal growth rate = [0.0840(.64)] / [1 – 0.0840(.64)]Internal growth rate = .0564 or 5.64%To find the sustainable growth rate, we need the ROE, which is:ROE = NI / TEROE = $1,537,452 / $10,069,920ROE = .1527 or 15.27%C-26 CASE SOLUTIONSUsing the retention ratio we previously calculated, the sustainable growth rate is:Sustainable growth rate = (ROE × b) / [1 – (ROE × b)]Sustainable growth rate = [0.1527(.64)] / [1 – 0.1527(.64)]Sustainable growth rate = .1075 or 10.75%The internal growth rate is the growth rate the company can achieve with no outside financing of any sort. The sustainable growth rate is the growth rate the company can achieve by raising outside debt based on its retained earnings and current capital structure.CHAPTER 4 C-21 2.Pro forma financial statements for next year at a 12 percent growth rate are:Income statementSales $ 34,159,35COGS 24,891,530 Other expenses 4,331,600 Depreciation 1,366,680EBIT $ 3,569,541Interest 478,240Taxable income $ 3,091,301Taxes (40%) 1,236,520Net income $ 1,854,78Dividends $ 675,583C-26 CASE SOLUTIONSAdd to RE 1,179,197Balance sheetAssets Liabilities & EquityCurrent Assets Current LiabilitiesCash $ 493,92AccountsPayable $ 995,680Accounts rec. 793,408 Notes Payable 2,030,000 Inventory 1,161,574 Total CL $ 3,025,680 Total CA $ 2,448,902Long-term debt $ 5,320,000ShareholderEquityCommon stock $ 350,000Fixed assets Retainedearnings 10,899,117Net PP&E $ 18,057,088 Total Equity $ 11,249,117Total Assets $ 20,505,990 Total L&E $ 19,594,787CHAPTER 4 C-21 So, the EFN is:EFN = Total assets – Total liabilities and equityEFN = $20,505,990 – 19,594,797EFN = $911,193The company can grow at this rate by changing the way it operates. For example, if profit margin increases, say by reducing costs, the ROE increases, it will increase the sustainable growth rate. In general, as long as the company increases the profit margin, total asset turnover, or equity multiplier, the higher growth rate is possible. Note however, that changing any one of these will have the effect of changing the pro forma financial statements.C-26 CASE SOLUTIONS3.Now we are assuming the company can only build in amounts of $5 million.We will assume that the company will go ahead with the fixed asset acquisition. To estimate the new depreciation charge, we will find the current depreciation as a percentage of fixed assets, then, apply this percentage to the new fixed assets. The depreciation as a percentage of assets this year was:Depreciation percentage = $1,366,680 / $16,122,400Depreciation percentage = .0848 or 8.48%The new level of fixed assets with the $5 million purchase will be:New fixed assets = $16,122,400 + 5,000,000 = $21,122,400So, the pro forma depreciation will be:Pro forma depreciation = .0848($21,122,400)Pro forma depreciation = $1,790,525We will use this amount in the pro forma income statement. So, the pro forma income statement will be:Income statementSales $ 34,159,35COGS 24,891,530 Other expensesCHAPTER 4 C-214,331,600Depreciation 1,790,525EBIT $ 3,145,696Interest 478,240Taxable income $ 2,667,456Taxes (40%) 1,066,982Net income $ 1,600,473Dividends $ 582,955Add to RE 1,017,519C-26 CASE SOLUTIONSThe pro forma balance sheet will remain the same except for the fixed asset and equity accounts. The fixed asset account will increase by $5 million, rather than the growth rate of sales.Balance sheetAssets Liabilities & EquityCurrent Assets Current LiabilitiesCash $ 493,92AccountsPayable $ 995,680Accounts rec. 793,408 Notes Payable 2,030,000 Inventory 1,161,574 Total CL $ 3,025,680 Total CA $ 2,448,902Long-term debt $ 5,320,000ShareholderEquityCommon stock $ 350,000Fixed assets Retainedearnings 10,737,439Net PP&E $ 21,122,400 Total Equity $ 11,087,439Total Assets $ 23,571,302 Total L&E $ 19,433,119CHAPTER 4 C-21 So, the EFN is:EFN = Total assets – Total liabilities and equityEFN = $23,581,302 – 19,433,119EFN = $4,138,184Since the fixed assets have increased at a faster percentage than sales, the capacity utilization for next year will decrease.CHAPTER 6THE MBA DECISION1. Age is obviously an important factor. The younger an individual is, the moretime there is for the (hopefully) increased salary to offset the cost of the decision to return to school for an MBA. The cost includes both the explicit costs such as tuition, as well as the opportunity cost of the lost salary.2. Perhaps the most important nonquantifiable factors would be whether ornot he is married and if he has any children. With a spouse and/or children, he may be less inclined to return for an MBA since his family may be less amenable to the time and money constraints imposed by classes. Other factors would include his willingness and desire to pursue an MBA, job satisfaction, and how important the prestige of a job is to him, regardless of the salary.3.He has three choices: remain at his current job, pursue a Wilton MBA, orpursue a Mt. Perry MBA. In this analysis, room and board costs are irrelevant since presumably they will be the same whether he attends college or keeps his current job. We need to find the aftertax value of each, so:Remain at current job:Aftertax salary = $55,000(1 – .26) = $40,700CHAPTER 6 C-27 His salary will grow at 3 percent per year, so the present value of his aftertax salary is:PV = C {1 – [(1 + g)/(1 + r)]t} / (r–g)]PV = $40,700{[1 – [(1 +.065)/(1 + .03)]38} / (.065 – .03)PV = $836,227.34Wilton MBA:Costs:Total direct costs = $63,000 + 2,500 + 3,000 = $68,500PV of direct costs = $68,500 + 68,500 / (1.065) = $132,819.25PV of indirect costs (lost salary) = $40,700 / (1.065) + $40,700(1 + .03) / (1 + .065)2 = $75,176.00Salary:PV of aftertax bonus paid in 2 years = $15,000(1 –.31) / 1.0652= $9,125.17Aftertax salary = $98,000(1 – .31) = $67,620C-26 CASE SOLUTIONSHis salary will grow at 4 percent per year. We must also remember that he will now only work for 36 years, so the present value of his aftertax salary is: PV = C {1 – [(1 + g)/(1 + r)]t} / (r–g)]PV = $67,620{[1 – [(1 +.065)/(1 + .04)]36} / (.065 – .04)PV = $1,554,663.22Since the first salary payment will be received three years from today, so we need to discount this for two years to find the value today, which will be: PV = $1,544,663.22 / 1.0652PV = $1,370,683.26So, the total value of a Wilton MBA is:Value = –$75,160 – 132,819.25 + 9,125.17 + 1,370,683.26 =$1,171,813.18Mount Perry MBA:Costs:Total direct costs = $78,000 + 3,500 + 3,000 = $86,500. Note, this is also the PV of the direct costs since they are all paid today.PV of indirect costs (lost salary) = $40,700 / (1.065) = $38,215.96Salary:CHAPTER 6 C-27 PV of aftertax bonus paid in 1 year = $10,000(1 – .29) / 1.065 = $6,666.67 Aftertax salary = $81,000(1 – .29) = $57,510His salary will grow at 3.5 percent per year. We must also remember that he will now only work for 37 years, so the present value of his aftertax salary is: PV = C {1 – [(1 + g)/(1 + r)]t} / (r–g)]PV = $57,510{[1 – [(1 +.065)/(1 + .035)]37} / (.065 – .035)PV = $1,250,991.81Since the first salary payment will be received two years from today, so we need to discount this for one year to find the value today, which will be:PV = $1,250,991.81 / 1.065PV = $1,174,640.20So, the total value of a Mount Perry MBA is:Value = –$86,500 – 38,215.96 + 6,666.67 + 1,174,640.20 = $1,056,590.90C-26 CASE SOLUTIONS4.He is somewhat correct. Calculating the future value of each decision willresult in the option with the highest present value having the highest future value. Thus, a future value analysis will result in the same decision. However, his statement that a future value analysis is the correct method is wrong since a present value analysis will give the correct answer as well.5. To find the salary offer he would need to make the Wilton MBA asfinancially attractive as the as the current job, we need to take the PV of his current job, add the costs of attending Wilton, and the PV of the bonus on an aftertax basis. So, the necessary PV to make the Wilton MBA the same as his current job will be:PV = $836,227.34 + 132,819.25 + 75,176.00 – 9,125.17 = $1,035,097.42This PV will make his current job exactly equal to the Wilton MBA on a financial basis. Since his salary will still be a growing annuity, the aftertax salary needed is:PV = C {1 – [(1 + g)/(1 + r)]t} / (r–g)]$1,035,097.42 = C {[1 – [(1 +.065)/(1 + .04)]36} / (.065 – .04)C = $45,021.51This is the aftertax salary. So, the pretax salary must be:Pretax salary = $45,021.51 / (1 – .31) = $65,248.576.The cost (interest rate) of the decision depends on the riskiness of the use offunds, not the source of the funds. Therefore, whether he can pay cash orCHAPTER 6 C-27 must borrow is irrelevant. This is an important concept which will be discussed further in capital budgeting and the cost of capital in later chapters.CHAPTER 7FINANCING S&S AIR’S EXPANSION PLANS WITH A BOND ISSUEA rule of thumb with bond provisions is to determine who benefits by theprovision. If the company benefits, the bond will have a higher coupon rate.If the bondholders benefit, the bond will have a lower coupon rate.1. A bond with collateral will have a lower coupon rate. Bondholders have theclaim on the collateral, even in bankruptcy. Collateral provides an asset that bondholders can claim, which lowers their risk in default. The downside of collateral is that the company generally cannot sell the asset used as collateral, and they will generally have to keep the asset in good working order.2.The more senior the bond is, the lower the coupon rate. Senior bonds getfull payment in bankruptcy proceedings before subordinated bonds receive any payment. A potential problem may arise in that the bond covenant may restrict the company from issuing any future bonds senior to the current bonds.3. A sinking fund will reduce the coupon rate because it is a partial guaranteeto bondholders. The problem with a sinking fund is that the company must make the interim payments into a sinking fund or face default. This means the company must be able to generate these cash flows.4. A provision with a specific call date and prices would increase the couponrate. The call provision would only be used when it is to the company’s advantage, thus the bondholder’s disadvantage. The downside is theCHAPTER 7 C-29 higher coupon rate. The company benefits by being able to refinance at a lower rate if interest rates fall significantly, that is, enough to offset the call provision cost.5. A deferred call would reduce the coupon rate relative to a call provision witha deferred call. The bond will still have a higher rate relative to a plain vanillabond. The deferred call means that the company cannot call the bond for a specified period. This offers the bondholders protection for this period. The disadvantage of a deferred call is that the company cannot call the bond during the call protection period. Interest rates could potentially fall to the point where it would be beneficial for the company to call the bond, yet the company is unable to do so.6. A make-whole call provision should lower the coupon rate in comparison toa call provision with specific dates since the make-whole call repays thebondholder the present value of the future cash flows. However, a make-whole call provision should not affect the coupon rate in comparison to a plain vanilla bond. Since the bondholders are made whole, they should be indifferent between a plain vanilla bond and a make-whole bond. If a bond with a make-whole provision is called, bondholders receive the market value of the bond, which they can reinvest in another bond with similar characteristics. If we compare this to a bond with a specific call price, investors rarely receive the full market value of the future cash flows.CASE 3 C-30 7. A positive covenant would reduce the coupon rate. The presence of positivecovenants protects bondholders by forcing the company to undertake actions that benefit bondholders. Examples of positive covenants would be: the company must maintain audited financial statements; the company must maintain a minimum specified level of working capital or a minimum specified current ratio; the company must maintain any collateral in good working order. The negative side of positive covenants is that the company is restricted in its actions. The positive covenant may force the company into actions in the future that it would rather not undertake.8. A negative covenant would reduce the coupon rate. The presence ofnegative covenants protects bondholders from actions by the company that would harm the bondholders. Remember, the goal of a corporation is to maximize shareholder wealth. This says nothing about bondholders.Examples of negative covenants would be: the company cannot increase dividends, or at least increase beyond a specified level; the company cannot issue new bonds senior to the current bond issue; the company cannot sell any collateral. The downside of negative covenants is the restriction of the company’s actions.9.Even though the company is not public, a conversion feature would likelylower the coupon rate. The conversion feature would permit bondholders to benefit if the company does well and also goes public. The downside is that the company may be selling equity at a discounted price.10. The downside of a floating-rate coupon is that if interest rates rise, thecompany has to pay a higher interest rate. However, if interest rates fall, the company pays a lower interest rate.CHAPTER 8STOCK VALUATION AT RAGAN, INC.1.The total dividends paid by the company were $126,000. Since there are100,000 shares outstanding, the total earnings for the company were: Total earnings = 100,000($4.54) = $454,000This means the payout ratio was:Payout ratio = $126,000/$454,000 = 0.28So, the retention ratio was:Retention ratio = 1 – .28 = 0.72Using the retention ratio, the company’s growth rate is:g = ROE × b = 0.25*(.72) = .1806 or 18.06%The dividend per share paid this year was:= $63,000 / 50,000D= $1.26DNow we can find the stock price, which is:C-84 CASE SOLUTIONSP 0 = D 1 / (R – g )P 0 = $1.26(1.1806) / (.20 – .1806)P 0 = $76.752.Since Expert HVAC had a write off which affected its earnings per share, we need to recalculate the industry EPS. So, the industry EPS is:Industry EPS = ($0.79 + 1.38 + 1.06) / 3 = $1.08Using this industry EPS, the industry payout ratio is:Industry payout ratio = $0.40/$1.08 = .3715 or 37.15%So, the industry retention ratio isIndustry retention ratio = 1 – .3715 = .6285 or 62.85%。

《Corporate Finance (公司金融学)》课件 (24)

this option
23.2 Valuing a Start-Up with Black-Scholes
The Black-Scholes Model is
Where
C0 S N(d1) EerT N(d2 )
C0 = the value of a European option at time t = 0 r = the risk-free interest rate.
• This “dead weight loss” is overcome by the incentive compatibility for the grantor.
Top Stock Option Grants
Company Citigroup, Inc. American Express Cisco Systems, Inc. Bank of America Honeywell Inc. ALCOA
23.1 Executive Stock Options
• Executive Stock Options exist to align the interests of shareholders and managers.
• Executive Stock Options are call options (technically warrants) on the employer’s shares. – Inalienable – Typical maturity is 10 years. – Typical vesting period is 3 years. – Most include implicit reset provision to preserve incentive compatibility.

公司金融-Corporate Finance

课程简介：公司金融、相关概念的比较与理解2相关概念的比较与理解财务管理是对企业的资金进行规划和控制的一项管理活动。

——王庆成王化成（西方财务管理）1993年版财务管理是有关资金的获得和有效使用的管理工作。

——注册会计师考委会办公室编（财务成本管理）1999年版企业理财是一种开放性、动态性和综合性的管理，就是围绕资金运动而展开的。

——余绪缨（企业理财学）1995年版运动而展开的公司理财与经济价值或财富的保值增值有关，是有关创造财富的决策。

——（美）Arthur J. Keown（现代财务管理基础）1996年版现代公司理财是指公司以投资者和融资者身份进入金融市场经营金融商品的活动。

——王永海（公司理财通论）1996年版国内传统理财学——会计意义大于金融意义《公司金融》威斯引例苹果电脑最初是一家位于车库里的两人合伙企业它成长迅速，到年，已变成企业。

它成长迅速，到19856000万股份、总市值超10亿$的大型公开交易公司。

企业创始人之，30岁的斯蒂交易公司企业创始人之一芬.乔布斯拥有其中的700万股，价值约1.2 亿$ 。

12尽管乔布斯在公司股份众多，而且在其创建和成功中居功至伟，但1985年公司财务业绩变糟时，被迫交出经营职权，还辞去所有职务。

☐辞职后乔布斯并未一撅不振，组建了Pixar 动画公司，该公司负责为《玩具总动员》、《虫虫危机》、《玩具总动员2》制作动画。

于年变成公众公司，遭到股市Pixar1995热烈追捧，乔布斯持有其80%股份价值高达11 亿$。

☐1997年苹果的未来仍处于困境中，该公司决定走延续道路，聘“新”CEO----乔布斯。

决定走延续道路聘“新”CEO乔布斯乔布斯在新（旧）职位上有多成功？☐2000年1月，苹果董事会授予乔布斯价值2亿$的股票期权，且一掷9000万为他购买和维护架万为他购买和维护一架Gulfstream V喷气式飞机。

董事会成员说：这家伙拯救了公司会成员说“这家伙拯救了公司”☐企业组织形态、企业目标和企业控制流动负债流动资产CurrentCurrent Liabilities 长期负债AssetsLong-TermDebt固定资产所有者权益Fixed Assets 1Shareholders ’Equity1 有形2 无形Equity流动资产流动负债Current LiabilitiesCurrent Assets长期负债L TLong-TermDebt固定资产Fixed Assets 所有者权益Fixed Assets1有形Shareholders’ Equity2 无形流动资产流动负债Current LiabilitiesCurrent Assets Current Assets Current Liabilities 长期负债L T Long-TermDebt固定资产Fixed Assets 所有者权益Shareholders’1有形2ShareholdersEquity2 无形流动资产流动负债Current LiabilitiesCurrent Assets Current Assets Current Liabilities 长期负债L T Long-TermDebt固定资产Fixed Assets 所有者权益Shareholders’1有形2 无形ShareholdersEquity第四节公司制企业的治理结构（P311－P322第十三章公司治理）一、公司治理结构与代理问题1、公司治理结构公司治理结构公司治理结构一般由三部分构成：决策机构；执行机构；监督机构。

Corporate finance Chap004

funds, stock price may increase due to higher future dividends
• Payout Ratio
• Fraction of earnings paid out as dividends
• Plowback Ratio
• Fraction of earnings retained by firm
• Sometimes called market capitalization rate
4-6
4-2 HOW COMMON STOCKS ARE VALUED
• Example
• Fledgling Electronics sells for $100 per share
today; they are expected to sell for $110 in one year. What is expected return if dividend in one year is forecasted to be $5.00?
• Primary Market
• New securities
• Secondary Market
• Previously-issued securities
• Common Stock
• Ownership shares in publicly-held
corporation
4-2
4-1 HOW COMMON STOCKS ARE TRADED
1 0 .31 .65 .67 PV 1 2 3 3 (1 .1) (1 .1) (1 .1) (1 .1) (.10 .04) 9.13

《Corporate Finance (公司金融学)》课件 (4)

Continuous Compounding (Advanced)
• The general formula for the future value of an investment compounded continuously over many periods can be written as: FV = C0×erT
FV $50 (1 .12)23 $50 (1.06)6 $70.93 2
The Effective Annual Interest Rate (EAR) is the annual rate that would give us the same end-ofinvestment wealth after 3 years:
4.1 The One-Period Case: Present Value
• In the one-period case, the formula for PV can be written as:
PV C1 1 r
Where C1 is cash flow at date 1 and r is the appropriate interest rate.
$1.10 $1.54 $2.16 $3.02 $4.23 $5.92
0
1
2
3
4
5
Present Value and Compounding
• How much would an investor have to set aside today in order to have $20,000 five years from now if the current rate is 15%?
FV C0 (1 r)T

CFA知识点-CorporateFinance公司金融

CFA知识点-Corporate Finance 公司金融Corporate Finance, 中文通常译作公司金融，或者公司理财。

在CFA一级考试中，它占比8%，难度系数在整个一级的学习科目中，为中等偏下，以理解为主。

虽然只有一个session,但包含6个主题，这构成了一个公司理财核心的三件事：钱从哪里来？钱怎么花？钱怎么分？这门课程告诉学员，一个公司，尤其是公司的高管是如何针对公司财务报表，使公司规划出最合适的资本结构，来获得资本的最优收益；在制定资本预算时，如何做出正确的现金流量估计和风险分析，从而作出正确的决定；如何在决定股利政策时，充分了解其中的资讯和意义；以及如何实现公司融资结构与投资结构的最优化并做出未来决策。

所以，这门课具有较强的实用性。

一、 Capital Budgeting 资本预算在众多的投资项目中，企业应当如何去做决策，这需要科学的方法论，由此衍生了资本预算理论的发展。

我们首先要了解的是资本预算的一般过程和资本预算的五大基本原则，以及在对一个项目进行评估的时候，几种主流评估方法：1）NPV (Net Present Value) 净现值法2）IRR (Internal Rate ofReturn) 内部收益率法3）Payback Period 投资回收期法4）Discounted Payback Period 贴现回收期法5）Average Accounting Rate ofReturn 平均会计收益率法6）Profitability Index 盈利性指数。

这其中，NPV和IRR深受大企业和学术研究的欢迎，也是考试的核心。

然而它们也有其各自优势与不足。

就NPV和IRR 的比较来说，（1）理论上看，净现值是最正确的方法，它考虑了所有的现金流情况，多个项目进行投资选择时，应该选择净现值最大的项目；（2）内部收益率法的最大优点就是以百分比的形式计算收益率，容易让人理解，但是存在多重解问题(即一个项目有可能出现两个IRR) 。

chap024Risk Management(财务管理,台湾大学,Matthew Will)

24- 9
Futures Contracts
Futures Contract - Exchange traded forward contract with gains or losses realized daily.
Profit to seller = initial futures price - ultimate market price Profit to buyer = ultimate market price - initial futures price
With a futures contract the farmer locks in a price
Price per bushel
McGraw-Hill/Irwin
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved
McGraw-Hill/Irwin
Copyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved
24- 3
Why Hedge?
Question of The Day
What
is a cereal company in the business of doing?
Future Contracts
Example - The Farmer’s Hedge - A farmer owns wheat in her fields and wishes to hedge against a drop in the price she will potentially sell it for in the open market. Show the positions involved in this hedge. Value of wheat

(完整word版)CorporateFinance重点知识整理

(完整word版)CorporateFinance重点知识整理第一章导论1. 公司目标：为所有者创造价值公司价值在于其产生现金流能力。

2。

财务管理的目标：最大化现有股票的每股现值。

3。

公司理财可以看做对一下几个问题进行研究：1。

资本预算:公司应该投资什么样的长期资产。

2. 资本结构：公司如何筹集所需要的资金。

3. 净运营资本管理:如何管理短期经营活动产生的现金流。

4. 公司制度的优点:有限责任,易于转让所有权，永续经营。

缺点：公司税对股东的双重课税。

第二章会计报表与现金流量资产= 负债+ 所有者权益（非现金项目有折旧、递延税款）EBIT（经营性净利润）= 净销售额—产品成本—折旧EBITDA = EBIT + 折旧及摊销现金流量总额CF(A) = 经营性现金流量—资本性支出—净运营资本增加额= CF(B）+ CF（S)经营性现金流量OCF = 息税前利润+ 折旧- 税资本性输出= 固定资产增加额+ 折旧净运营资本= 流动资产- 流动负债第三章财务报表分析与财务模型1. 短期偿债能力指标（流动性指标）流动比率= 流动资产/流动负债（一般情况大于一）速动比率= （流动资产—存货)/流动负债(酸性实验比率）现金比率= 现金/流动负债流动性比率是短期债权人关心的，越高越好；但对公司而言,高流动性比率意味着流动性好，或者现金等短期资产运用效率低下。

对于一家拥有强大借款能力的公司，看似较低的流动性比率可能并非坏的信号2。

长期偿债能力指标（财务杠杆指标)负债比率= (总资产—总权益)/总资产or （长期负债+ 流动负债)/总资产权益乘数= 总资产/总权益= 1 + 负债权益比利息倍数= EBIT/利息现金对利息的保障倍数（Cash coverage radio）= EBITDA/利息3。

资产管理或资金周转指标存货周转率= 产品销售成本/存货存货周转天数= 365天/存货周转率应收账款周转率= （赊）销售额/应收账款总资产周转率= 销售额/总资产= 1/资本密集度4. 盈利性指标销售利润率= 净利润/销售额资产收益率ROA = 净利润/总资产权益收益率ROE = 净利润/总权益(完整word版)CorporateFinance重点知识整理5. 市场价值度量指标市盈率= 每股价格/每股收益EPS 其中EPS = 净利润/发行股票数市值面值比= 每股市场价值/每股账面价值企业价值EV = 公司市值+ 有息负债市值- 现金EV乘数= EV/EBITDA6. 杜邦恒等式ROE = 销售利润率（经营效率）x总资产周转率(资产运用效率）x权益乘数(财杠）ROA = 销售利润率x总资产周转率7. 销售百分比法假设项目随销售额变动而成比例变动，目的在于提出一个生成预测财务报表的快速实用方法。

公司金融学前篇课件

3
• 公司金融理论的发展远远滞后于公司金融实践，在20 世纪50 年代之前，包括公司金融在内的整个微观金融学缺乏自己的理论构架，其研究方法是一般经济学中的供需均衡分析法。因此，即便在美国，从事微观金融学研究的学者在学界也缺乏其应有的学术地位。
• 20 世纪50 年代，规范的公司金融理论开始形成。马柯维茨的投资组合选择理论以及莫迪利亚尼和米勒的无税 MM 理论是现代公司金融乃至整个微观金融学的发端。从此以后，现代金融学有了自己的分析方法，即无套利均衡分析方法。
常可以使你避免采取最差的行动，它是一个次优
化准则。
17
种类
含义
应用及应注意的问题
（1）主要应用于直接投资项目；（2）还
有价值的创意原则
指新创意能获得额外报酬。
可应用于经营和销售活动创新的优势都是暂时的，企业长期的竞争优势，只有通过
一系列的短期优势才能维持。
指专长能创造价值。比较优
比较优势原势原则要求企业把主要精力（1）“人尽其才、物尽其用”；（2）优
公司金融学
刘昕
郑州师范学院经济管理学院经济系讲师
1
• 在我国，公司金融( Co叩orate Finance) 也称财务管理或公司财务学或公司理财。
• 这种译法源自20 世纪80 年代中期，我国会计学界的学者首先从西方国家的商学院引入了"Corporate Finance" 和" Financial Management" ，并将其译成财务管理或公司财务学，一直沿用至今。
• 20 世纪70 年代以后，随着公司经营和金融市场逐渐国际化，通货膨胀、利率变动、汇率波动、税制差异、全球经济不确定性等外部因素对公司的影响日益加剧，并渗透进了公司金融的各种决策中。一方面，公司的金融活动更加丰富多彩，使公司CFO 变得更加炙手可热;另一方面，公司金融的环境变得扑朔迷离，使公司价值创造过程戈得越来越复杂。

公司金融Chap0概要

The Balance-Sheet Model of the Firm
The Capital Budgeting Decision（资本预算）
Current Liabilities
Long-Term Debt Fixed Assets 1 Tangible 2 Intangible
Current Assets
References
Applied Corporate Finance: A User’s Manual (Second Edition) by Aswath Damodaran
爱斯华斯.达莫德伦，应用公司理财，机械工业出版社
Ross Stephen A.,公司理财(英文版, 第6版), 机械工
业出版社, 2002年4月
求如下：上市时间在一年（含一年）以上；至少已经公开了一个会计年度的财务报表；尽量避免亏损企业；勿选择金融行业。
•
–
从以下几方面分析上市公司的相关金融决策
• • • 分析公司的治理结构；分析企业的资本结构，判断企业是否负债不足，或过度负债；研究企业的股利政策，决定股利支付的多少
–
撰写案例分析报告（PPT或WORD形式）
The Balance-Sheet Model of the Firm
The Net Working Capital Investment Decision （净营运资金）
Current Assets
Current Liabilities
Net Working Capital
Long-Term Debt
资金运动的管理财务总监、公司金融
Board of Directors Chairman President Chief Executive Officer CEO Chief Operation Officer / COO Chief Financial Officer / CFO Treasurer

《Corporate Finance》公司财务课件 (2)

Pearson’s tax rate is 40%, so they have an interest tax shield worth TCBrB = .40×$600×.08 = $19.20 each present value of the project under leverage is:
rS
r0
B S
(1 TC )(r0
rB )
To calculate the debt to equity ratio, B , start with B
S
V
$125 $250 $375 $500 4 19.20
PV (1.10) (1.10)2 (1.10)3 (1.10)4 t1 (1.08)t
NPVloan
$600
4 t 1
$600.08 (1 .4) (1.08)t
$600 (1.08)4
NPVloan $63.59
APV = NPV + $7.09
Which is the same answer as before.
17-8
Two Ways to Find the NPV of the loan:
P V = $943.50 + $63.59 = $1,007.09
B = $600 when V = $1,007.09 so S = $407.09.
rS
.10
$600 (1.40)(.10 .08) $407.09
11.77%
17-12
Step Three: Valuation for Pearson
CF3 = $375 – 28.80 CF4 = $500 – 28.80 – 600

[精选]罗斯《公司理财》(厦门大学沈艺峰老师)上

1
第一章导论 Chapter 1 Introduction
《公司理财》的课程内容
可持续增长模型
公司理财 Corporate Finance
1
外部资金需要量
财务分析
如何才能顺利通过本门课程？ How to survive？
• 案例（case） 20%Biblioteka • 期中测试20%
• 期末考试（final examination） 50%
• 做好各项财务收支的计划、控制、核算、分析和考核工作
• 依法合理筹集资金
• 有效利用各项资产，努力提高经济效益
第一章导论 Chapter 1 Introduction
公司理财的环境
• 金融环境 • 税收环境 • 法律环境 • 社会环境 • 政府
公司理财 Corporate Finance
公司理财 Corporate Finance
1
第四章流动资金管理 Chapter 4 Working Capital Management
流动资金管理
• 流动资金（Working Capital）指占用在流动资产上的资金。
• 流动资产指可在一年内或一个营业周期内转换成现金或运用的其他资产。
Q* = 最优库存现金持有量
公司理财 Corporate Finance
1
第四章流动资金管理 Chapter 4 Working Capital Management
米勒-俄尔（Miller-Orr）模型
3b 2
3
Z= 4i
h = 3Z
Z = 最优库存现金持有量 b = 变现成本
= 日净现金流量的方差
可持续增长模型-另一种思维
• 资产=负债 + 权益

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Multiple Choice Questions1. Which one of the following entails the purchase of a put option on a stock to limit the downside risk associated with owning that stock?a. put-call parityb. covered callC. protective putd. straddlee. strangleSECTION: 24.1TOPIC: PROTECTIVE PUTTYPE: DEFINITIONS2. The relationship between the prices of the underlying stock, a call option, a put option, and a riskless asset is referred to as:A. put-call parity.b. a balanced call.c. a protective call.d. a balanced put.e. a protective put.SECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: DEFINITIONS3. The effect on an option's value of a small change in the value of the underlying asset is called the option:a. theta.b. vega.c. rho.D. delta.e. gamma.SECTION: 24.3TOPIC: OPTION DELTATYPE: DEFINITIONS4. The sensitivity of an option's value to a change in the option's time to expiration is measured by the option:A. theta.b. vega.c. rho.d. delta.e. gamma.SECTION: 24.3TOPIC: OPTION THETATYPE: DEFINITIONS5. The sensitivity of an option's value to a change in the standard deviation of the return on the underlying asset is measured by the option:a. theta.B. vega.c. rho.d. delta.e. gamma.SECTION: 24.3TOPIC: OPTION VEGATYPE: DEFINITIONS6. The sensitivity of an option's value to a change in the risk-free rate is measured by the option:a. theta.b. vega.C. rho.d. delta.e. gamma.SECTION: 24.3TOPIC: OPTION RHOTYPE: DEFINITIONS7. An estimate of the future standard deviation of the return on an asset obtained from the Black-Scholes Option Pricing Model is called a(n):a. residual error.b. asset mean return.c. derived case volatility (DCV).d. forecast rho.E. implied standard deviation (ISD).SECTION: 24.3TOPIC: IMPLIED STANDARD DEVIATIONTYPE: DEFINITIONS8. An option that grants the right, but not the obligation, to sell shares of the underlying asset ona particular date at a specified price is called a(n):a. American delta.b. American call.c. American put.D. European put.e. European call.SECTION: 24.1TOPIC: PUT OPTIONTYPE: CONCEPTS9. Which one of the following provides the option of selling a stock anytime during the option period at a specified price even if the market price of the stock declines to zero?a. American callb. European callC. American putd. European pute. either an American or a European putSECTION: 24.1TOPIC: PUT OPTIONTYPE: CONCEPTS10. The primary purpose of a protective put is to:a. increase the maximum potential return on a financial asset.b. offset an equivalent call option.C. limit the downside risk of asset ownership.d. lock in a risk-free rate of return on an individual financial asset.e. increase the upside potential return on a commodity.SECTION: 24.1TOPIC: PROTECTIVE PUTTYPE: CONCEPTS11. Which one of the following acts like an insurance policy should the price of a stock you own suddenly decrease in value?a. sale of a European call optionb. sale of an American put optionC. purchase of a protective putd. purchase of a protective calle. either the sale or purchase of a putSECTION: 24.1TOPIC: PROTECTIVE PUTTYPE: CONCEPTS12. A protective put strategy can be replicated by which one of the following?a. riskless investment and stock purchaseb. stock purchase and call optionC. call option and riskless investmentd. riskless investmente. call option, stock purchase, and riskless investmentSECTION: 24.1TOPIC: PROTECTIVE PUTTYPE: CONCEPTS13. Given an exercise price E, time to maturity T, and European put-call parity, the present value of E plus the value of the call option is equal to the:a. current market value of the stock.b. present value of the stock minus the value of the put.c. value of the put minus the market value of the stock.d. value of a U.S. Treasury bill.E. stock value plus the put value.SECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: CONCEPTS14. You can realize the same value as that derived from stock ownership if you:a. sell a put option and invest at the risk-free rate of return.b. buy a call option and write a put option on a stock and also lend out funds at the risk-free rate.C. sell a put and buy a call on a stock as well as invest at the risk-free rate of return.d. lend out funds at the risk-free rate of return and sell a put option on the stock.e. borrow funds at the risk-free rate of return and invest the proceeds in equivalent amounts of put and call options.SECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: CONCEPTS15. Under European put-call parity, the present value of the strike price is equivalent to:a. the current value of the stock minus the call premium.b. the market value of the stock plus the put premium.c. the present value of a government coupon bond with a face value equal to the strike price.D. a U.S. Treasury bill with a face value equal to the strike price.e. a risk-free security with a face value equal to the strike price and a coupon rate equal to the risk-free rate of return.SECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: CONCEPTS16. Assume that you want to have $25,000 ten years from now. The annual percentage rate applicable to this investment is 8 percent. Which one of the following methods of compounding interest will allow you to deposit the least amount possible today?a. annualb. dailyc. quarterlyd. monthlyE. continuousSECTION: 24.1TOPIC: CONTINUOUS COMPOUNDINGTYPE: CONCEPTS17. The buyer of a European call option has the:A. right, but not the obligation, to buy a stock at a specified price on a specified date.b. right, but not the obligation, to buy a stock at a specified price during a specified period of time.c. obligation to buy a stock on a specified date but only at the specified price.d. obligation to buy a stock sometime during a specified period of time at the specified price.e. obligation to buy a stock at the lower of the exercise price or the market price on the expiration date.SECTION: 24.2TOPIC: CALL OPTIONTYPE: CONCEPTS18. In the Black-Scholes option pricing formula, N(d1) is the probability that a standardized, normally distributed random variable is:a. less than or equal to N(d2).b. less than one.c. equal to one.d. equal to d1.E. less than or equal to d1.SECTION: 24.2TOPIC: BLACK-SCHOLESTYPE: CONCEPTS19. In the Black-Scholes model, the symbol " " is used to represent the standard deviation of the:a. option premium on a call with a specified exercise price.B. rate of return on the underlying asset.c. volatility of the risk-free rate of return.d. rate of return on a risk-free asset.e. option premium on a put with a specified exercise price.SECTION: 24.2TOPIC: BLACK-SCHOLESTYPE: CONCEPTS20. Which of the following affect the value of a call option?I. strike priceII. time to maturityIII. standard deviation of the return on the underlying assetIV. risk-free ratea. I and III onlyb. II and IV onlyc. I, II, and III onlyd. II, III, and IV onlyE. I, II, III, and IVSECTION: 24.2TOPIC: BLACK-SCHOLESTYPE: CONCEPTS21. To compute the value of a put using the Black-Scholes option pricing model, you:a. first have to apply the put-call parity relationship.B. first have to compute the value of the put as if it is a call.c. compute the value of an equivalent call and then subtract that value from one.d. compute the value of an equivalent call and then subtract that value from the market price of the stock.e. compute the value of an equivalent call and then multiply that value by e-RT.SECTION: 24.2TOPIC: PUT OPTION PRICINGTYPE: CONCEPTS22. Which one of the following statements is correct?a. The price of an American put is equal to the stock price minus the exercise price according to the Black-Scholes option pricing model.b. The value of a European put is greater than the value of a comparable American put.c. The value of a put is equal to one minus the value of an equivalent call.d. The value of a put minus the value of a comparable call is equal to the value of the stock minus the exercise price.E. The value of an American put will equal or exceed the value of a comparable European put. SECTION: 24.2TOPIC: PUT OPTION PRICINGTYPE: CONCEPTS23. The Black-Scholes Option Pricing Model can be used for:a. American options but not European options.B. European options but not American options.c. call options but not put options.d. put options but not call options.e. both zero coupon bonds and coupon bonds.SECTION: 24.2TOPIC: BLACK-SCHOLES MODELTYPE: CONCEPTS24. Which of the following variables is included in the Black-Scholes call option pricing formula?I. put premiumII. stock betaIII. exercise priceIV. stock priceA. III and IV onlyb. I, II, and IV onlyc. II, III, and IV onlyd. I, III, and IV onlye. I, II, III, and IVSECTION: 24.2TOPIC: BLACK-SCHOLES MODELTYPE: CONCEPTS25. Which one of the following statements is correct concerning options on a non-dividend paying stock?a. Prior to expiration, it is always better to exercise an option than to sell it.b. A European put is more valuable than a comparable American put.c. Holding an American put is always more valuable than exercising the put.D. Prior to expiration, it is always more valuable to sell a call than to exercise it.e. American call options are more valuable than comparable European call options. SECTION: 24.2TOPIC: OPTION EXERCISETYPE: CONCEPTS26. The value of a call option delta is:A. between zero and one.b. less than or equal to one.c. greater than zero.d. greater than or equal to zero.e. less than or equal to one.SECTION: 24.3TOPIC: OPTION DELTATYPE: CONCEPTS27. Which one of the following is the correct formula for approximating the change in an option's value given a small change in the value of the underlying stock?a. Change in option value ≈ Change in stock value / Deltab. Change in option value ≈ Change in stock value / (1 - Delta)c. Change in option value ≈ Change in stock value / (1 + Delta)d. Change in option value ≈ Change in stock value (1 - Delta)E. Change in option value ≈ Change in stock value DeltaSECTION: 24.3TOPIC: OPTION DELTATYPE: CONCEPTS28. An increase in the price of the underlying stock:I. decreases the value of a call.II. increases the value of a call.III. decreases the value of a put.IV. increases the value of a put.a. I and III onlyb. I and IV onlyC. II and III onlyd. II and IV onlye. I onlySECTION: 24.3TOPIC: OPTION DELTATYPE: CONCEPTS29. Which of the following statements is correct?I. Increasing the time to maturity may not increase the value of a European put.II. Theta measures the sensitivity of an option's value to the passage of time.III. Call options tend to be more sensitive to the passage of time than are put options. IV. An increase in time increases the value of a call option.a. I and III onlyb. II and IV onlyc. II, III, and IV onlyd. I, III, and IV onlyE. I, II, III, and IVSECTION: 24.3TOPIC: OPTION THETATYPE: CONCEPTS30. Theta measures an option's:a. intrinsic value.b. volatility.C. rate of time decay.d. sensitivity to changes in the value of the underlying asset.e. sensitivity to risk-free rate changes.SECTION: 24.3TOPIC: OPTION THETATYPE: CONCEPTS31. Selling an option has more value than exercising the option because of the option's:a. riskless value.b. intrinsic value.c. standard deviation.d. exercise price.E. time premium.SECTION: 24.3TOPIC: OPTION VALUETYPE: CONCEPTS32. Which of the following statements is correct?I. As the standard deviation of the returns on a stock increase, the value of a put option decreases.II. The value of a call option decreases as the standard deviation of the returns on the underlying stock increase.III. The sensitivity of an option's value to the volatility of the underlying asset is referred to as an option's vega.IV. Increasing the standard deviation of the underlying asset has similar effects on the both the stock's call and put options.a. I and III onlyb. II and IV onlyc. I and II onlyD. III and IV onlye. I, II, and III onlySECTION: 24.3TOPIC: OPTION VEGATYPE: CONCEPTS33. The effect an increase in the risk-free interest rate has on the value of an option is:a. more significant than the effect created by a change in the volatility of the underlying asset.b. negative if the option is a call option.c. referred to as the option delta.d. expressed in terms of theta.E. negative if the option is a put.SECTION: 24.3TOPIC: OPTION RHOTYPE: CONCEPTS34. Which one of the five factors included in the Black-Scholes model cannot be directly observed?a. risk-free rateb. strike priceC. standard deviationd. stock pricee. life of the optionSECTION: 24.3TOPIC: BLACK-SCHOLESTYPE: CONCEPTS35. The implied standard deviation is derived by:a. averaging the standard deviations of the returns over the past year.b. using the square root of the directly observed variances in the stock returns.C. using the Black-Scholes option pricing model and the market value of the option.d. subtracting the square root of the option value from one.e. using the square root of the expiration value of the option.SECTION: 24.3TOPIC: IMPLIED STANDARD DEVIATIONTYPE: CONCEPTS36. The implied standard deviation used in the Black-Scholes option pricing model is:a. based on historical performance.B. a prediction of the volatility of the return on the underlying asset over the life of the option.c. a measure of the time decay of an option.d. an estimate of the future value of an option given a strike price E.e. a measure of the historical intrinsic value of an option.SECTION: 24.3TOPIC: IMPLIED STANDARD DEVIATIONTYPE: CONCEPTS37. The value of an option is equal to the:a. intrinsic value minus the time premium.B. time premium plus the intrinsic value.c. implied standard deviation plus the intrinsic value.d. summation of the intrinsic value, the time premium, and the implied standard deviation.e. summation of delta, theta, vega, and rho.SECTION: 24.3TOPIC: OPTION VALUETYPE: CONCEPTS38. For the equity of a firm to be considered a call option on the firm's assets, the firm must:a. be in default.B. be leveraged.c. pay dividends.d. have a negative cash flow from operations.e. have a negative cash flow from assets.SECTION: 24.4TOPIC: EQUITY VALUE OF A FIRMTYPE: CONCEPTS39. If you consider the equity of a leveraged firm to be an option on the firm's assets then the act of paying off debt is comparable to _____ on the assets of the firm.a. purchasing a put optionb. purchasing a call optionc. exercising an in-the-money put optionD. exercising an in-the-money call optione. selling a call optionSECTION: 24.4TOPIC: EQUITY VALUE OF A FIRMTYPE: CONCEPTS40. For every positive net present value project that a firm undertakes, the equity in the firm will increase the most if the delta of the call option on the firm's assets is:A. equal to one.b. between zero and one.c. equal to zero.d. between zero and minus one.e. equal to minus one.SECTION: 24.4TOPIC: EQUITY VALUE OF A FIRMTYPE: CONCEPTS41. The value of the risky debt of a firm is equal to the value of:a. a call option plus the value of a risk-free bond.b. a risk-free bond plus a put option.c. the equity of the firm minus a put.d. the equity of the firm plus a call option.E. a risk-free bond minus a put option.SECTION: 24.4TOPIC: VALUE OF A FIRM'S DEBTTYPE: CONCEPTS42. A firm has assets of $36.2 million and a 5-year, zero-coupon bond with a face value of $14 million. The bond has a current market value of $9.6 million. How can the owners of this firm change their risky bonds into risk-free bonds?a. purchase a call option with a 1-year life and a $9.6 million face valueb. purchase a call option with a 5-year life and a $14 million face valuec. purchase a put option with a 1-year life and a $9.6 million face valued. purchase a put option with a 5-year life and a $9.6 million face valueE. purchase a put option with a 5-year life and a $14 million face valueSECTION: 24.4TOPIC: BOND PROTECTIVE PUTTYPE: CONCEPTS43. Pure financial mergers:a. are beneficial to stockholders.b. are beneficial to both stockholders and bondholders.C. are detrimental to stockholders.d. add value to both the total assets and the total equity of a firm.e. reduce both the total assets and the total equity of a firm.SECTION: 24.5TOPIC: OPTIONS AND MERGERSTYPE: CONCEPTS44. A purely financial merger:a. increases the risk that the firm will default on its debt obligations.b. has no effect on the risk level of the firm's debt.C. reduces the value of the option to go bankrupt.d. has no effect on the equity value of a firm.e. reduces the risk level of the firm and increases the value of the firm's equity. SECTION: 24.5TOPIC: OPTIONS AND MERGERSTYPE: CONCEPTS45. Shareholders in a leveraged firm might wish to accept a negative net present value project if:A. it increases the standard deviation of the returns on the firm's assets.b. it lowers the variance of the returns on the firm's assets.c. it lowers the risk level of the firm.d. it diversifies the cash flows of the firm.e. it decreases the risk that a firm will default on its debt.SECTION: 24.5TOPIC: OPTIONS AND CAPITAL BUDGETINGTYPE: CONCEPTS46. You recently purchased a share of Wise Brothers stock at a cost of $33. You simultaneously purchased a put on one share of Wise Brothers stock at a cost of $2.50 and a strike price of $35. The put was for a period of one year. How much profit will you earn if the stock is worth $34 at the end of the one-year period?a. -$1.50B. -$0.50c. $1.00d. $2.00e. $2.50Profit = $35 $33 - $2.50 = -$0.50AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: PROTECTIVE PUT STRATEGYTYPE: PROBLEMS47. Today, you purchased one share of Diaz Motors stock at a market price of $54 along with a put on that one share of stock. The put is for one year, has a strike price of $50 and has an option premium of $.20. What is the maximum amount you can lose over the next year?A. -$4.20b. -$4.00c. -$3.80d. -$2.50e. -$0.20Maximum loss = $50 $54 - $.20 = -$4.20AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: PROTECTIVE PUT STRATEGYTYPE: PROBLEMS48. Today, you are buying a one-year call on Peterson Nursery stock with a strike price of $35 along with a one-year risk-free asset which pays 4 percent interest. The cost of the call is $1.80 and the amount invested in the risk-free asset is $33.65. How much profit will you earn if the stock has a market price of $37 one year from now?a. $0.85b. $1.35C. $1.55d. $3.35e. $3.55Profit = ($33.65 1.04) + ($37 $35) $1.80 - $33.65 = $1.55AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: RISK-FREE ASSET PLUS CALLTYPE: PROBLEMS49. Today, you are buying a one-year call on Trico stock with a strike price of $45 along with a one-year risk-free asset that pays 5 percent interest. The cost of the call is $2.20 and the amount invested in the risk-free asset is $42.86. What is the most you can lose over the next year? A. -$0.06b. $0.00c. $0.94d. $1.26e. $2.14Maximum loss = ($42.86 1.05) + $0 $2.20 - $42.86 = -$0.06AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: RISK-FREE ASSET PLUS CALLTYPE: PROBLEMS50. Party Town stock is selling for $44 a share. A 6-month call on Party Town stock with a strike price of $45 is priced at $0.40. Risk-free assets are currently returning 0.20 percent per month. What is the price of a 6-month put on Party Town stock with a strike price of $45?a. $0.29b. $0.54C. $0.86d. $1.00e. $1.40P = ($45 / 1.0026) + $0.40 $44 = $0.86AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: PROBLEMS51. Dial Tone stock has a current market price of $23 a share. The one-year call on Dial Tone stock with a strike price of $25 is priced at $2.05 while the one-year put with a strike price of $25 is priced at $2.60. What is the risk-free rate of return?a. 5.98 percentb. 6.03 percentC. 6.16 percentd. 6.29 percente. 6.37 percent$25 / (1 + r) = -$2.05 + $23 + $2.60; r = 6.16 percentAACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: PROBLEMS52. High Five stock is selling for $17 a share. A 6-month call on High Five stock with a strike price of $20 is priced at $0.36. Risk-free assets are currently returning 0.25 percent per month. What is the price of a 6-month put on High Five stock with a strike price of $20?a. $2.47b. $2.58c. $2.73D. $3.06e. $3.19P = ($20 / 1.00256) + $0.36 $17 = $3.06AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: PROBLEMS53. B&K, Inc. stock has a current market price of $62 a share. The one-year call on B&K stock with a strike price of $60 is priced at $5.61 while the one-year put with a strike price of $60 is priced at $0.68. What is the risk-free rate of return?A. 5.13 percentb. 5.22 percentc. 5.38 percentd. 5.65 percente. 5.74 percent$60 / (1 + r) = -$5.61 + $62 + $0.68; r = 5.13 percentAACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: PUT-CALL PARITYTYPE: PROBLEMS54. If you invest $6,500 today at 7 percent, compounded continuously, how much will you have in 6 years?a. $9,509b. $9,684c. $9,754d. $9,801E. $9,893FV = $6,500 2.71828.07 6 = $9,893AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: CONTINUOUS COMPOUNDINGTYPE: PROBLEMS55. Todd invested $7,500 in an account today at 9 percent compounded continuously. How much will he have in his account if he leaves his money invested for 3 years?a. $9,607B. $9,825c. $9,919d. $9,528e. $9,634FV = $7,500 2.71828.09 3 = $9,825AACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: CONTINUOUS COMPOUNDINGTYPE: PROBLEMS56. Van, Inc. stock is selling for $38 a share. The 6-month 35 call on Van, Inc. stock is selling for $5.97 while the 6-month 35 put is priced at $1.85. What is the continuously compounded risk-free rate of return?a. 6.41 percentB. 6.50 percentc. 6.57 percentd. 6.65 percente. 6.73 percent($35 e-R 1/2) = -$5.97 + $38 + $1.85$35 e-.5R = $33.88ln(e.5R)=ln.9685R = -.032523R = 6.50 percentAACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: CONTINUOUSLY COMPOUNDED Rf RATETYPE: PROBLEMS57. The stock of Edwards Homes, Inc. has a current market value of $54 a share. The 9-month call with a strike price of $50 is selling for $6.39 while the 9-month put with a strike price of $50 is priced at $.73. What is the continuously compounded risk-free rate of return?a. 4.43 percentB. 4.50 percentc. 4.68 percentd. 5.00 percente. 5.29 percent($50 e-R .75) = -$6.39 + $54 + $0.73$50 e-.75R = $48.34ln(e-.75R)=ln.9668.75R = -.03376R = 4.50 percentAACSB TOPIC: ANALYTICSECTION: 24.1TOPIC: CONTINUOUSLY COMPOUNDED Rf RATETYPE: PROBLEMS58. What is the value of d2 given the following information on a stock?A. .4323b. .4406c. .4479d. .4508e. .4529d 2 = .648831 (.25 .75) = .4323AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: BLACK-SCHOLES OPTION PRICING MODELTYPE: PROBLEMS59. Given the following information, what is the value of d2 as it is used in the Black-Scholes Option Pricing Model?a. .3138B. .2307c. .0146d. .1894e. .2276= .072399 .35 .75) = -.2307d2AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: BLACK-SCHOLES OPTION PRICING MODELTYPE: PROBLEMS60. What is the value of a 9-month call with a strike price of $50 given the Black-Scholes Option Pricing Model and the following information?a. $0b. $0.26c. $1.47d. $1.90E. $2.59C = ($47 .46119) ($50 2.71828-.04 .75 .39334) = $21.68 $19.09 = $2.59AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: BLACK-SCHOLES OPTION PRICING MODELTYPE: PROBLEMS61. What is the value of a 6-month call with a strike price of $35 given the Black-Scholes Option Pricing Model and the following information?a. $0b. $0.13c. $1.06D. $1.85e. $2.14C = ($32 .42132) ($35 2.71828-.05 .5 .34066) = $13.48 $11.63 = $1.85 AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: BLACK-SCHOLES OPTION PRICING MODELTYPE: PROBLEMS62. What is the value of a 9-month put with a strike price of $20 given the Black-Scholes Option Pricing Model and the following information?a. $3.25b. $3.67c. $3.88d. $4.03E. $4.31P = ($20 2.71828-.055 .75) + $2.12 $17 = $4.31AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: BLACK-SCHOLES OPTION PRICING MODELTYPE: PROBLEMS63. What is the value of a 3-month put with a strike price of $45 given the Black-Scholes Option Pricing Model and the following information?A. $3.23b. $3.40c. $3.61d. $4.03e. $4.22P = ($45 2.71828-.065 .25) + $4.96 $46 = $3.23AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: BLACK-SCHOLES OPTION PRICING MODELTYPE: PROBLEMS64. A stock is currently selling for $43 a share. The risk-free rate is 6 percent and the standard deviation is 30 percent. What is the value of d1 of a 6-month call option with a strike price of $45?a. .0298b. .0317C. .0332d. .0432e. .0449AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: CALL OPTION DELTATYPE: PROBLEMS65. A stock is currently selling for $28 a share. The risk-free rate is 4.5 percent and the standard deviation is 35 percent. What is the value of d1 of a 3-month call option with a strike price of $25?a. .4207b. .5413c. .6488d. .7479E. .7994AACSB TOPIC: ANALYTICSECTION: 24.2TOPIC: CALL OPTION DELTATYPE: PROBLEMS66. The delta of a call option on a firm's assets is .804. This means that a $60,000 project will increase the value of equity by:a. $11,760.b. $21,336.C. $48,240.d. $74,627.e. $108,240.Increase in equity value = $60,000 .804 = $48,240AACSB TOPIC: ANALYTICSECTION: 24.4TOPIC: MARKET VALUE OF EQUITYTYPE: PROBLEMS67. The delta of a call option on a firm's assets is .613. This means that a $35,000 project will increase the value of equity by:a. $19,260.B. $21,455.c. $48,240.d. $56,455.e. $57,096.Increase in equity value = $35,000 .613 = $21,455AACSB TOPIC: ANALYTICSECTION: 24.4TOPIC: MARKET VALUE OF EQUITYTYPE: PROBLEMS68. The current market value of the assets of Kleiner, Inc. is $72 million, with a standard deviation of 20 percent per year. The firm has zero-coupon bonds outstanding with a total face value of $35 million. These bonds mature in 3 years. The risk-free rate is 5 percent per year compounded continuously. What is the value of d1?A. 2.69b. 2.94c. 3.13d. 3.46e. 3.58AACSB TOPIC: ANALYTICSECTION: 24.4TOPIC: MARKET VALUE OF EQUITYTYPE: PROBLEMS69. The current market value of the assets of Klymner Industries is $58.74 million. The market value of the equity is $31.92 million. The risk-free rate is 5.5 percent and the outstanding debt matures in 6 years. What is the market value of the firm's debt?a. $19.45 millionB. $26.82 millionc. $36.98 milliond. $77.78 millione. $90.66 millionMarket value of debt = $58.74m $31.92m = $26.82AACSB TOPIC: ANALYTICSECTION: 24.4TOPIC: MARKET VALUE OF DEBTTYPE: PROBLEMS。