Corporate Finace Final Formula Sheet
罗斯《公司理财Corporate-Finance》(第七版)英文-Ch01课件
2750% Deb50t % 3D0e%bEt quity
The Capital Structure decision can be viewed as how best to slice up a the pie.
5705% Equity
If how you slice the pie affects the size of the pie, then the capital structure decision matters.
investments? 3. How much short-term cash flow does a company need
to pay its bills?
罗斯《公司理财Corporate-Finance》(第七版)英文-Ch01
4
The Balance-Sheet Model of the Firm
罗斯《公司理财Corporate-Finance》(第七版)英文-Ch01
9
Hypothetical Organization Chart
Board of Directors Chairman of the Board and Chief Executive Officer (CEO)
President and Chief Operating Officer (COO)
Shareholders’ Equity
罗斯《公司理财Corporate-Finance》(第七版)英文-Ch01
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Capital Structure
The value of the firm can be thought of as a pie.
The goal of the manager is to increase the size of the pie.
Corporate finance (3)
19-9
19-1 AFTER-TAX WEIGHTED-AVERAGE COST OF CAPITAL
• Example, Continued
After tax interest rD (1 TC ) D .06 (1 .35) 5 .195 Expectedequity income C rD (1 TC ) D 1.125 .195 0.93
• Capital Project Adjustments
• Discount rate
• Modify to reflect capital structure, bankruptcy
risk, other factors
• Present value
• Assume firm financed entirely by equity, make
$3.5 million
3.5 3.2 3.4 5.9 6.1 6.0 PV(FCF) 2 3 4 5 1.09 1.09 1.09 1.09 1.09 1.096 20.3
19-15
19-2 VALUING BUSINESSES
• Example, Continued
• What should be included with debt?
• Long-term debt • Short-term debt • Cash (netted off) • Receivables • Deferred tax
19-18
19-3 USING WACC IN PRACTICE
19-20
19-3 USING WACC IN PRACTICE
罗斯《公司理财CorporateFinance》(第七版)英文课件Ch
If how you slice the pie affects the size of the pie, then the capital struቤተ መጻሕፍቲ ባይዱture decision matters.
1-9
Hypothetical Organization Chart
Board of Directors Chairman of the Board and Chief Executive Officer (CEO)
Shareholders’ Equity
1-5
The Balance-Sheet Model
of the Firm
The Capital Budgeting Decision
Current
Current Assets
Liabilities
Long-Term Debt
Fixed Assets 1 Tangible 2 Intangible
Cost Accounting Data Processing
1-10
The Financial Manager
To create value, the financial manager should: 1. Try to make smart investment decisions. 2. Try to make smart financing decisions.
How much shortterm cash flow does a company need to pay its bills?
Shareholders’ Equity
1-8
Capital Structure
The value of the firm can be thought of as a pie.
cfa二级考试时间和题量
cfa二级考试时间和题量一、CFA二级考试时间与题量概况。
CFA二级考试总时长为4小时24分钟，分为上、下午两场考试，每场考试时间为2小时12分钟。
CFA二级考试共有20个案例（Item Sets），每个案例包含6个选择题，总共120道选择题。
二、CFA二级20题示例及解析。
（一）财务报表分析（Financial Reporting and Analysis）部分。
1. 某公司采用先进先出法（FIFO）核算存货，在物价持续上涨期间，以下关于该公司财务比率的说法正确的是（）- A. 存货周转率会被高估。
- B. 毛利润率会被低估。
- C. 流动比率会被低估。
- D. 以上说法都不正确。
- 答案：D。
- 解析：在物价持续上涨期间，采用FIFO法，存货成本是按照较早的较低价格核算的。
存货周转率=销售成本/平均存货，由于存货成本低，销售成本相对较低，存货价值相对较高，存货周转率会被低估，A错误；毛利润率=(销售收入 - 销售成本)/销售收入，销售成本低，毛利润率会被高估，B错误；流动比率=流动资产/流动负债，存货价值相对较高，流动资产相对较高，流动比率会被高估，C错误。
2. 公司A在2020年对一项固定资产进行减值测试，该固定资产账面价值为1000万元，可收回金额为800万元。
公司采用直线法折旧，剩余使用寿命为5年，无残值。
减值后的年度折旧费用为（）- A. 160万元。
- B. 200万元。
- C. 180万元。
- D. 150万元。
- 答案：A。
- 解析：固定资产减值后，账面价值调整为可收回金额800万元。
减值后的年度折旧费用 = 800/5 = 160万元。
（二）公司金融（Corporate Finance）部分。
3. 公司B正在考虑一个新项目，初始投资为1000万元，预计未来5年每年的现金流入分别为300万元、350万元、400万元、450万元和500万元。
公司的加权平均资本成本（WACC）为10%。
公司理财(罗斯)第1章(英文
03 Valuation Basis
The concept and significance of valuation
要点一
Definition
Valuation is the process of estimating the worth of an asset or a company, typically through the use of financial metrics and analysis.
The Time Value of Money
Fundamentals of Corporate Fianance (7 edition) 公司理财 复习提纲
公司理财 复习Chapter 11. Capital Budgeting Decision (Investment Decision):投资决策Decision to invest in tangible or intangible assets.Capital Structure: The mix of long term debt and equity financing.2. The Financing Decision:融资决策The form and amount of financing of a firm ’s investment.To raise the money that the firm requires for its investment and operation.3. Real Assets: 实际资产，不动产Assets used to produce goods and services.4. Financial Assets: 金融资产Financial claims to the income generates by the firm ’s real assets.（比如：the share of stock, a bank loan, securities ）5. Types of Business Organizations:Sole Proprietorships:（好处：unlimited liabilities,）Partnerships:（好处：pool money, unlimited liabilities, tax advantage, ）Corporations:Limited Liability Partnerships （limited ）6. Agency Problems ：代理问题Managers are agents for stockholders, but the managers may act in their own interests rather than maximizing value. cular time.3-4The Balance SheetCurrent Assets•Cash & Securities•Receivables•Inventories Fixed Assets•Tangible Assets•Intangible Assets +___________________Total Assets Current Liabilities •Payables •Short-term Debt +Long-term Liabilities +Shareholders’ Equity ____________________Total Liabilities &Shareholders’ Equity=2.Assetsrepresent the uses of a firm’s funds♦Liquid Asset –An asset that can be easily converted into cash. 容易转为现金•Note: The balance sheet places the most liquid assets at the top of the list and concludeswith the least liquid asset at the bottom.•Liquidity (Most→Least): Marketable Securities, Accounts Receivable, Inventories ♦Current Asset– Assets that are likely to be used or turned into cash in the near future (usually within the next 12 months).未来可能被使用或转为现金•Examples: include accounts receivable & inventories.包括应收账款和存货•Current Asset: Unsold Inventories♦Fixed Assets –Tangible Assets, Intangible Assets, GoodwillLiabilitiesrepresent the sources of a firm’s funding♦Current Liabilities – Liabilities that are likely to be paid off within the next 12 months.•Examples: accounts payable, debt due for repayment. 包括应付帐款和债务♦Long-Term Liabilities– Liabilities that are not likely to be paid off within the next 12 months. 不需要在未来12个月内支付的债务3.GAAP (Generally Accepted Accounting Principles): 一般公认会计原则Procedures for preparing financial statement.These state that assets must be shown in the balance sheet at their historical cost adjusted for depreciation.4.Book Value: 账面价值Value of assets or liabilities according to the balance sheet.Book values are based on historical or original values.5.Market Value: 市场价值The value of assets or liabilities were they to be resold in a marketMarket values measure current values of assets and liabilities.mon-size balance sheet: 统一度量式资产负债表All balance sheet items are expressed as a percentage of total assets.Income statement: 损益表A financial statement that shows the revenues, expenses, and net income of a firm over a period of time.Common-size income statement:All items on a common-size income statement are expressed as a percentage of revenues.7.Profit Flow VS. Cash Flow: 利润流VS现金流♦D epreciation (non-cash item) : 利润流要剔除折旧，现金流不需要。
corporate finance formula 公司金融公式
Corporate Finance formula15 Dividend Yield16Constant Growth Dividend DiscountModel17Dividend Discounted Model18Equivalent annual cost (EAC)19Estimating Expected Rates of Return with Constant GrowthDividend20 Growth rate g = ROE X plowback ratio21 Return on Equity22Present Value of GrowthOpportunity23 P/E ratio P/E = P 0/ EPS 24 NPV PV – (required investment) 25 NPV(A+B) NPV (A+B) = NPV (A) + NPV (B)26 Percentage return27 Variance σ228Standard deviation σ29 General Cost of capital30Cost of capital with only Debt andEquity31 After-tax Cost of Capital: WACC32Covariance of asset 1 and asset 233 Two assets portfolio variance34N assets portfolio variance35Beta for one asset i : βi36General portfolio β37Portfolio β with only Debt andEquity38 CAPM model r = r f + β (r m – r f ) where r m is the market return and r f is the risk free rate 39 Risk premium ( r - r f )r - r f = β (r m – r f ) where r m is the market return and r f is the risk free rate40 Expected return on preferred stock41 Arbitrage Pricing Theory Return = α + b 1(r factor1) + b 2(r factor2) + b 3(r factor3) + …+ noise42Fama-French three-factor modelr - r f =b market (r market factor )+b size (r size factor )+ b book-to-market (r book-to-market factor )i = the nominal or Annual Percentage Rate n = the number of periodsm = the number of compounding periods per year EAR = the Effective Annual Rateln = the natural logarithm, the logarithm to the base ee = the base of the natural logarithm ≈ 2.71828PMT = the periodic payment or cash flowPerpetuity = an infinite annuityg = continuous growth rateDIV=dividendEPS= earns per share P0= current priceNPV= net present valueR = return= mean of xRm market portfolio return Rf risk free returnρ12 correlation between asset 1 and 2。
金融 Final Exam Formula Sheet
4
Correlation: Covariance:
j ,m
Cov (r j , rm )
j m
Cov ( r j , rm ) j ,m j m
Covariance: the probability-weighted average of cross-products of the deviations from the respective means Beta of stock j:
Fixed Costs Depreciati on Pretax Profits
Alternatively:
DOL = 1
Risk and Return
Rate of return on any security = interest rate on Treasury bills + security risk premium Expected market return = interest rate on Treasury bills + normal market risk premium Mean (or expected) return = probability-weighted average of possible returns Variance = 2 = probability-weighted average of squared deviations around the mean Sample variance = 2 = sum of squared deviations around the average return, divided by the number of observations minus 1 Standard deviation = = Variance
公司金融(基础篇)英文版 原书第12版 11_Ecsy_Cola_in_Inglistan[2页]
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ECSY-COLA IN INGLISTANMinicase solution, Chapter 11Principles of Corporate Finance, 12th EditionR. A. Brealey, S.C. Myers and F. AllenLibby Flannery prepared the attached spreadsheet to analyze the NPV of Ecsy-Cola’s proposed investment in Inglista n. With the inputs suggested in the mini-case, NPV was very slightly negative on a $20 million outlay.Libby was conscious of the spreadsheet’s simplifying assumptions. First, the project cash flows were projected as a perpetuity. The project, if successful, would generate cash returns for a long time, but not forever. On the other hand, the 25% nominal discount rate handed down from Ecsy-Cola’s headquarters seemed unreasonably high – there was clearly a built-in fudge factor.1 She decided to check her results with a more reasonable discount rate, say 15%.Libby used her spreadsheet to conduct a sensitivity analysis, assuming for simplicity that the optimistic and pessimistic probabilities were each 25%:Steady-State Sales $ millions Probability NPV at25%, $ millionsNPV at15%, $ millionsOptimistic 80 .25 + 14.8 + 42.9 Most Likely 50 .50 - 0.1 + 15.7 Pessimistic 20 .25 - 14.9 - 11.6If Libby waited a year, and discovered that potential sales were only 20 million liters per year, Ecsy-Cola would not invest. Then the downside NPV, assuming a 25% discount rate, would be zero, not −$14.9 million. The payoff to waiting would be:1 See Chapter 9.Expected NPV, invest in year 1 = .25 ⨯ 14.8 + .50 ⨯ (−0.1) + .25 ⨯ 0 = + $3.65 millionAt a 15% discount rate, the expected NPV from investing in year 1 would be +$18.6 million. These calculations su ggested a “wait and see” strategy.The problem with that strategy was potential competition. If steady-state sales turned out higher than now expected – 80 million liters per year, for example – then Sparky-Cola, or some other competitor, would surely enter. Therefore the high cash flows for the optimistic case were not sustainable in the long run, and the optimistic-case NPVs, while no doubt positive, were less than her spreadsheet suggested. Competition would limit the upside NPVs.Libby realized that investing right away, and establishing the Ecsy-Cola brand in Inglistan before her competitors could act, gave her best chance of generating a significant positive NPV. In the optimistic scenario, competition would come sooner or later, but Ecsy-Cola would have a head start and probably the largest market share. If Ecsy-Cola was just breaking even (earning its cost of capital), competitors would have no incentive to enter.Libby had to weigh the competitive advantages of investing immediately against the possibility of a costly mistake. Therefore she refocused her analysis on establishing the minimum potential size of the market. If NPV at that minimum was at least zero, or perhaps an acceptably small negative number, she resolved to invest right away.。
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%。
公司财务管理 Corporate Financial Management 公式
编号
名称/English
公式
反映
2-1
毛利率GPM
GrossProfitMargin
毛利率=毛利润/营业收入*100%
用来测度依据产品成本进行产品定价的能力。是衡量同行业各企业之间成本竞争优势的重要指标
2-2
销售净利率NPM
NetProfit Margin
销售净利率=净利润/营业收入*100%
企业的真实盈利能力
2-10
总资产收益率ROA
Return on Assets
ROA=净利润/平均资产总额*100%
企业单位资产产生净利润的能力
-
编号
名称/English
公式
反映
2-11
总资产周转率（周转次数）
TotalAssets turnover
TAT=营业收入/平均资产总额
企业单位资产所产生的营业收入
2-23
非流动资产周转天数
NCAT天数=365/（营业收入/平均非流动资产）
2-24
资产负债率ALR
Assets Liabilities ratio
=平均负债总额/平均资产总额
平均负债/资产总额=期初负债/资产总额+期末负债/资产总额/2
单位收入需要的总资产投入。营业收入相同，所需要的投资越少，说明总资产盈利性越好，运营效率高
2-12
总资产周转天数
TAT天数=365/（营业收入/平均资产总额）
总资产周转一次所需要的时间（越短越好，总资产运营效率高，盈利性越好
2-13
总资产与收入比
=平均资产总额/营业收入
单位收入需要的总资产投入。营业收入相同，所需要的投资越少，说明总资产盈利性越好，运营效率高
公司理财(罗斯)第15章(英文
Multinational company capital budget
01
Foreign Project Evaluation
02
Capital Budgeting Decision
Capital Structure Decision
03
04
Divided Policy Decision
Foreign exchange risk management
Corporate Finance (Ross) Chapter 15
目录
• Introduction • Capital Structure and Cost of Capital • Financial stress and financial crisis • Finance of multinational
Bankruptcy or reception
In extreme cases, bankruptcy or reception may be necessary to resolve financial conflicts
Hale Waihona Puke Finance of04 multinational corporations
Master the analysis methods and influencing factors of capital structure decision-making.
Understand the impact of capital structure adjustment on enterprise value and financial condition.
Capital Structure of Multinational Corporations
公司理财(罗斯)第5章(英文)
McGraw-Hill/Irwin Corporate Finance, 7/e
5-2
Valuation of Bonds and Stock
First Principles:
Value of financial securities = PV of expected future cash flows
5-10
Example of pure discount bonds:
What is the price of a 25-year, pure discount bond that pays $50 at maturity if the current yield-to maturity is 8 percent? 0 1 2… 25 |----------|---------|-------------------| $50 PV0 = 50 ÷ (1.08)25 = $7.30
Time to maturity (T) = Maturity date - today’s date Face value (F) Discount rate (r)
$0
0
$0
$0
$F
T
1
2
T 1
Present value of a pure discount bond at time 0:
F PV = T (1+ r)
批注本地保存成功开通会员云端永久保存去开通
5-0
CHAPTER
5
2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
formula sheet
BUSN3004 Corporate Finance – Formulae Sheet ()()()()()c c e i o o e i t D r t D r debt of benefits shield tax of lue Present va Equity Debt Equity k Equity Debt Debt k k company the of ue market val Total income operating Net E D O V O k equityof ue Market val rs shareholde ordinary to available Earnings E ES k goutstandin debt of ue Market val debt on interest Annual D I k ==+×+ +×==+======− + = costs agency & bankruptcy of lues Present va debt of benefits shield tax of lues Present va company unlevered of Value company levered of ValueEquity Residual Method ()()()()ratex company ta t debtof cost k (levered)capital equity of cost k D debt project issuing of zero at time proceeds net NP tperiod in debt project D tperiod in flow -cash operating after tax R NP C k 1D D t 1D k R NPV(E)c d e '1't t n 1t t e '1t 't c 't d t ======−−+−−−−=∑=+Adjusted Present Value Method()())(unlevered capital equity of cost k k 1t D k C k 1R APV *e n 1t n 1t t d c 't d t *e t =++−+=∑∑== Adjusted Cost of Capital Methods:(i) Modigliani & Miller Formula()L t 1k k C k)(1R NPV(MM)c *e n 1t t t −=−+=∑=L=project’s marginal contribution to the firm’s debt capacity as a proportion of the project’s present value.(ii) Miles & Ezzell Formula++−=−+=∑=d *e c d *e n 1t tt k 1k 1Lt k k k C k)(1R NPV(ME)(iii) Weighted Average Cost of Capital Formula()()wt 1k w 1k k C k)(1R NPV(WACC)c d e n 1t t t −+−=−+=∑= w = proportion of project financing undertaken with debtArditti-Levy Method()wk w 1k k C k)(1t D k R NPV(AL)d e n 1t t c 't d t +−=−++=∑=Corporate Acquisitionshareper price market s company'Target company target of share each for company acquiring by the offered shares of Number share per price market s company' Acquiring exchange of Ratio ×=Gain = V AT – (V A +V T )Net Cost = cash –V TNet Cost = (b x V surviving company ) – V TNPV A = gain – net costProject FinancingReserve Saleable Life Loan ReserveSaleable Total Ratio Coverage Reserve RateTax TR sCommitment Lease LE ExpenseInterest IE DebtTerm Long of Portion Current CPLTD tsParticipan Equity to available Flows Cash Net NCFE RatioCoverage Service Debt DSCR TR)LE)(1(IE CPLTD TR)LE)(1(IE CPLTD NCFE DSCR =======−++−+++=。
《Corporate Finance》公司财务课件 (2)
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
补充A经营战略分析
4-23
一客户的讨价还价能力
• 一般来说;客户的讨价还价能力取决于以下 因素：
• 1 客户的价格敏感性 • 2 产品的差异性以及转换成本 • 3 客户所在行业的集中度以及客户的购买
数量
4-24
一客户的讨价还价能力
1 客户的价格敏感性 • 客户的价格敏感性主要取决于以下因素： • 1产品对于客户成本的重要性 当产品在客户的成本中占
行业在投入品和产出品市场上的相对讨价还价能力
客户的讨价还价能力
价格敏感性 产品差异性 转换成本 客户的集中度 客户的购买数量
供应商的讨价还价能力
价格敏感性 产品差异性 转换成本 供应商的集中度 供应商的供应数量
4-7
第一节 行业分析
一 行业实际和潜在的竞争程度 二 行业在投入品和产出品市场上的相对讨
4-13
一现有公司间的竞争
4 规模经济以及固定成本/可变成本的比率 • 如果一个行业存在着规模经济;就会刺激该
行业的公司展开激烈竞争以争夺市场份额 和扩大规模
• 同样;如果一个行业的固定成本/可变成本 比率较高;公司就会倾向于降低价格以充分 利用现有的生产能力 比如;航空业价格战 司空见惯;就是这种情况的一个典型例子
定因素和经营风险;从而可以使随后的会计分析 财务分析和业绩预测建立在公司实际情况的基础 上
4-3
补充A 经营战略分析
• 公司的价值取决于公司获得超过资本成本的收益 的能力 公司的资本成本是由资本市场决定的
• 公司的盈利能力则取决于公司的战略选择： • 第一;公司选择在哪个或哪些行业里从事经营活
动;即行业选择； • 第二;公司选择采取什么方式与同行业的其他公
公司金融(基础篇)(英文版 原书第12版 09_Jones_Family_Inc[3页]
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THE JONES FAMILY, INCORPORATEDMinicase SolutionPrinciples of Corporate Finance, 12th EditionR. A. Brealey, S. C. Myers and F. AllenIf the wildcat well is a success, it should produce 75×365 = 27,375 barrels per year. Suppose production starts after one year. The net cash flow per barrel, after pipeline and shipping costs and including one year’s inflation at 2.5%, is (100 – 20)×1.025 = $82. Total cash flow is C1 = 27,375×82 = $2,245,000 (we will round to the nearest $1000). Production will decline by 5% per year, but prices are projected to grow at 2.5% per year. The net growth rate is (1.025×.95) – 1 = –.026 or –2.6%.Johnny used the CAPM to get a discount rate. The interest rate is 6%, the market risk premium is 7% and the beta is .8. Thus:r=r f+β(r m−r f)=.6+.8×7=11.6%The cash flows from the oil well are a 15-year annuity declining at 2.6% per year.1 Johnny decided to use the short-cut formula in Table 2.2. The short cut starts with the formula for a growing (in this case declining) perpetuity, but subtracts the PV of another declining perpetuity. Let T = the date of the last cash flow from the declining annuity:PV=C1r−g−C1r−g×(1+g)T(1+r)T=2,245,000.116−(−.026)[1−(1−.0261.116)15]=13,757,0001 This assumes that the well produces one lump-sum cash flow per year at dates 1, 2, … , 15. This timing may not be right. If the cash flows are spread evenly over each year, and the well starts production at date 1, then it would be better to assume rece ipt at dates 1.5, 2.5, … , 15.5 (the mid-year convention). In this case you could discount the present values by an extra half year to account for the six-month delays. Or you could switch over to continuous compounding.The second term inside the brackets subtracts the present value of an annuity starting in year 16 and discounts it back to the present. Note that the cash flow for year 16 is C 1 × (1 - .026)15.Of course there was a 30 per cent chance of a dry hole, so Johnny multiplied his PV of $13,757,000 by 1 - .3 = .7 and subtracted the $5 million investment.NPV = .7 ⨯ 13,757,000 – 5,000,000 = + $4,630,000What about the operating leverage that so concerned Johnny’s father? Operating leverage is caused by fixed costs, in this base by the pipeline and shipping costs. These costs start at 20 × 1.025 = $20.50 per barrel in year 1 and are expected to grow at 2.5% per year. The calculation above folds them into net cash flows and discounts them at 11.6%, as if they were just as risky as the revenues. If they are really fixed, they should be discounted at a lower rate, for example at the 7% long-term borrowing rate for Jones Family Oil, Inc.Johnny decided to see how the PV of the fixed costs would change whendiscounted at 7 vs. 11.6%. The PV per barrel at 11.6%, which was included in the PV calculated above, is:1520.51.026PV 1$125.6.116(.026) 1.116⎡⎤-⎛⎫=-=⎢⎥ ⎪--⎝⎭⎢⎥⎣⎦The PV at 7% increases to:1520.51.026PV 1$161.4.07(.026) 1.07⎡⎤-⎛⎫=-=⎢⎥ ⎪--⎝⎭⎢⎥⎣⎦Thus recognizing operating leverage could decrease overall PV by (161.4 – 125.6) ×27,375 = $980,000 and decrease NPV to 13,757,000 – 980,000 = $12,777,000.2 The wildcat well’s NPV is still po sitive, however, because .7 × 12,777,000 = $8,944,000 is still greater than the $5 million outlay.It seems that Marsha’s oil well is an excellent investment. In fact it remains a good investment (ignoring any adjustment for operating leverage) even if production lasts only 6 years. You can check this by recalculating the declining annuity formula with T = 6, multiplying by the 0.7 probability of finding oil and subtracting the investment of $5 million. The resulting NPV is still positive.2 This holds the 11.6% discount rate for revenues constant. If that rate was right for net cash flows (revenues less fixed costs), it is too high for revenues alone. Operating leverage adds risk to net cash flows, not to revenue. A lower discount rate for revenues would increase NPV and make the Marsha’s investment still more attractive.。
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10
Scratch Paper 1
11
Scratch Puld tear off the last 4 pages of the exam sheet and use them as scratch paper for any work you do NOT want to be graded.
FORMULAS:
Rights-on M −S R0 = 0 N +1 Rights-ex
9
Price Drop and Dividends with taxes
ΔP 1 − t div = Div 1 − t cg
Sustainable Growth
g = RR * ROE
Accounting Ratios and Identities
ROE = Net Income/BV Equity EPS = Net Income/ Number shares P/E = Price/ EPS EBIT = EBITDA – Depreciation Net Income = EBIT – Net Interest – Taxes CFO = Net Income + Non-Cash Items + ΔWC CFI = Change in fixed assets ROC = EBIT (1-T) / (BV Debt + BV Equity)
VL = VU + BTC
Beta of equity (with corporate taxes)
β S = β0 +
B (1 − Tc )( β 0 − β b ) S
WACC (with corporate and personal taxes) B rWACC = r0 − r0 Tc V WACC (with corporate taxes) B B S rWACC = r0 − r0 TC = rB (1 − TC ) + rS V B+S S+B
CAPM
Ri = R F + β i ( RM − R F )
Levered cashflows
LCF = CFO + CFI + ChangeDebt − CashInt * (1 − T )
Unlevered cashflows
UCF = CFO + CFI + DebtInt * (1 − T ) − CashInt * (1 − T )
Value of Levered Equity (perpetual non-growing cashflows and corporate taxes)
S= ( EBIT − rb B )(1 − TC ) rs
Value of Unlevered Equity/Firm (perpetual non-growing cashflows and corporate taxes)
Re =
Me − S N
⎡ 1 ⎤ ⎢1 − (1 + r )t ⎥ ⎣ ⎦
Annuity (payments made at end of year)
P=
CF r
Return on equity (with corporate and personal taxes) B RS = R0 + (1 − Tc )( R0 − Rb ) S Return on equity (when cashflows are perpetual and non-growing) EPS RS = P Value of leveraged firm (with corporate taxes and personal taxes)