资本结构的计算方法
合集下载
相关主题
- 1、下载文档前请自行甄别文档内容的完整性，平台不提供额外的编辑、内容补充、找答案等附加服务。
- 2、"仅部分预览"的文档,不可在线预览部分如存在完整性等问题,可反馈申请退款(可完整预览的文档不适用该条件!)。
- 3、如文档侵犯您的权益，请联系客服反馈,我们会尽快为您处理(人工客服工作时间：9:00-18:30)。
Cost of equity (ke): Cost of debt (kd): Overall Cost of Capital (ko): ke(Ve/Vo) + kd(Vd/Vo) E/Ve I/Vd = X/Vo
Where: E I X Ve Vd Vo
= = = = = =
Net Income Debt Interest Net Operating Income Value of Equity Value of Debt Total Value of Firm
600 600 0 0 0%
1,500 2,400 600 600 900 1,800 22.5 45 22.5% 45%
Return on Equity % 45 42 39 36 33 30 27 24 21 18 15 12 9 6 3 0 0 2 4
60% gearing
20% gearing 0% gearing
600 600 6 6%
1,500 1,500 15 15%
2,400 2,400 24 24%
600 200 400 5 5%
1,500 200 1,300 16.25 16.25%
2,400 200 2,200 27.5 27.5%
iii. Gearing 60% EBIT Debt Interest Shareholder Earnings EPS (pence) Return on Equity
2. There is an optimum capital structure for the firm at which its total value is maximised. (Traditional Theory, Static Trade-off Theory)
MODIGLIANI-MILLER HYPOTHESIS
Байду номын сангаас GEARING
OPERATING GEARING Refers to the extent to which the firm’s operating costs are fixed. FINANCIAL GEARING Measures the relationship between debt and equity in the firm’s capital structure. May be measured as:
i. Income Gearing ii. Capital Gearing
IMPACT OF DEBT FINANCING
Debt appears cheaper than equity as a source of finance for firms: i. Lower risk for investors ii. Tax advantages iii. Lower transactions costs But debt is is a riskier source of finance for firms: i. Increases risk of financial distress
CAPITAL STRUCTURE
AIMS
The aim of this section of the module is to provide students with an introduction to the theory and practice of firms’ capital structure decisions.
1. The total value of the firm is independent of its capital structure. 2. The cost of equity increases to exactly offset any benefits from increased use of cheaper debt. 3. The cut-off rate for investment appraisal is independent of the firm’s capital structure and therefore of the way in which the project is financed.
iv. Other Theories
v. Evidence & Implications
i. Empirical Evidence ii. Implications for Investment Appraisal
CAPITAL STRUCTURE
SCOPE Capital structure concerned with the levels of debt and equity financing employed by firms to finance their activities. Two questions:
i. Gearing 0% EBIT Shareholder Earnings EPS (pence) Return on Equity ii. Gearing 20% EBIT Debt Interest Shareholder Earnings EPS (pence) Return on Equity
ASSUMPTIONS 1. Perfect Capital Markets
2. Firms can be categorised into equivalent risk classes 3. Investors have homogeneous expectations
4. No Taxes
PROPOSITIONS
ii. Modigliani-Miller Hypothesis
iii. Static Trade Off Theory
i. Impact of Taxation ii. Impact of Bankruptcy Costs iii. Option Pricing & Capital Structure iv. Agency Costs i. ii. iii. iv. v. vi. Tax Exhaustion Debt Capacity Control Managerial Preferences Industry Pecking Order Theory
3. The net operating income of the firm is not expected to grow.
4. The capital structure of the firm comprises equity and perpetual debt only.
MEASURES OF COST OF CAPITAL
=
=
X-I
E+I
=
Ve + Vd
THE CAPITAL STRUCTURE DEBATE
Two basic views on capital structure:
1. Capital structure has no impact on the overall cost of capital to the firm or its total value. (Modigiani- Miller Hypothesis)
ke
Cost of Capital ko
kd Leverage (Vd/Ve) Cost of Capital under Modigliani-Miller Hypothesis
The cost of equity increases to exactly offset any benefits from increased use of cheaper debt. The cost of equity for a geared firm is given by: Keg = Kou + (kou - kd)(Vd/Ve)
6
8
10
12
14 16
18 20
22
24 ROCE%
ASSUMPTIONS
1. The capital structure of the firm is altered by substituting debt for equity and vice versa.
2. The firm pays out its entire net income (earnings after interest and taxes) as dividends.
SIGNIFICANCE
OPTIMUM CAPITAL STRUCTURE If capital structure affects firm value there may be some optimal capital structure for the firm. INVESTMENT APPRAISAL If capital structure affects the cost of capital then we may have to consider how a project is financed when evaluating it.
3. Evaluate the evidence on, and implications of capital structure theory.
TOPIC OUTLINE
i.
Introduction
i. Scope & Significance ii. Measuring Gearing iii. Impact of Debt Financing iv. Assumptions v. Measures of Cost of Capital i. Assumptions ii. Propositions iii. Rationale iv. Arbitrage Proof v. Market Imperfections vi. Extension - Capital Structure in a CAPM context
i. What effect does capital structure have on the value of the firm to its owners?
ii. What effect does capital structure have on the cost of capital to the firm?
INTENDED LEARNING OUTCOMES
On the successful completion of this section of the module students will be able to: 1. Explain the scope and significance of capital structure theory. 2. Explain and critically evaluate theories of capital structure. competing
Trading Conditions EBIT (£000) ROCE Poor 600 6% Normal 1,500 15% Good 2,400 24%
Three possible financing structures are being considered: i. Gearing 0% (Equity 10 million £1 shares) ii. Gearing 20% (Equity 8 million £1 shares, 10% Debt £2 million) iii.Gearing 60% (Equity 4 million £1 shares, 10% Debt £6 million)
ii. Increases volatility of returns to shareholders
Fulthor plc is to be set up with a total capital of £10 million. Expected results for the company depend on trading conditions shown below:
Where: E I X Ve Vd Vo
= = = = = =
Net Income Debt Interest Net Operating Income Value of Equity Value of Debt Total Value of Firm
600 600 0 0 0%
1,500 2,400 600 600 900 1,800 22.5 45 22.5% 45%
Return on Equity % 45 42 39 36 33 30 27 24 21 18 15 12 9 6 3 0 0 2 4
60% gearing
20% gearing 0% gearing
600 600 6 6%
1,500 1,500 15 15%
2,400 2,400 24 24%
600 200 400 5 5%
1,500 200 1,300 16.25 16.25%
2,400 200 2,200 27.5 27.5%
iii. Gearing 60% EBIT Debt Interest Shareholder Earnings EPS (pence) Return on Equity
2. There is an optimum capital structure for the firm at which its total value is maximised. (Traditional Theory, Static Trade-off Theory)
MODIGLIANI-MILLER HYPOTHESIS
Байду номын сангаас GEARING
OPERATING GEARING Refers to the extent to which the firm’s operating costs are fixed. FINANCIAL GEARING Measures the relationship between debt and equity in the firm’s capital structure. May be measured as:
i. Income Gearing ii. Capital Gearing
IMPACT OF DEBT FINANCING
Debt appears cheaper than equity as a source of finance for firms: i. Lower risk for investors ii. Tax advantages iii. Lower transactions costs But debt is is a riskier source of finance for firms: i. Increases risk of financial distress
CAPITAL STRUCTURE
AIMS
The aim of this section of the module is to provide students with an introduction to the theory and practice of firms’ capital structure decisions.
1. The total value of the firm is independent of its capital structure. 2. The cost of equity increases to exactly offset any benefits from increased use of cheaper debt. 3. The cut-off rate for investment appraisal is independent of the firm’s capital structure and therefore of the way in which the project is financed.
iv. Other Theories
v. Evidence & Implications
i. Empirical Evidence ii. Implications for Investment Appraisal
CAPITAL STRUCTURE
SCOPE Capital structure concerned with the levels of debt and equity financing employed by firms to finance their activities. Two questions:
i. Gearing 0% EBIT Shareholder Earnings EPS (pence) Return on Equity ii. Gearing 20% EBIT Debt Interest Shareholder Earnings EPS (pence) Return on Equity
ASSUMPTIONS 1. Perfect Capital Markets
2. Firms can be categorised into equivalent risk classes 3. Investors have homogeneous expectations
4. No Taxes
PROPOSITIONS
ii. Modigliani-Miller Hypothesis
iii. Static Trade Off Theory
i. Impact of Taxation ii. Impact of Bankruptcy Costs iii. Option Pricing & Capital Structure iv. Agency Costs i. ii. iii. iv. v. vi. Tax Exhaustion Debt Capacity Control Managerial Preferences Industry Pecking Order Theory
3. The net operating income of the firm is not expected to grow.
4. The capital structure of the firm comprises equity and perpetual debt only.
MEASURES OF COST OF CAPITAL
=
=
X-I
E+I
=
Ve + Vd
THE CAPITAL STRUCTURE DEBATE
Two basic views on capital structure:
1. Capital structure has no impact on the overall cost of capital to the firm or its total value. (Modigiani- Miller Hypothesis)
ke
Cost of Capital ko
kd Leverage (Vd/Ve) Cost of Capital under Modigliani-Miller Hypothesis
The cost of equity increases to exactly offset any benefits from increased use of cheaper debt. The cost of equity for a geared firm is given by: Keg = Kou + (kou - kd)(Vd/Ve)
6
8
10
12
14 16
18 20
22
24 ROCE%
ASSUMPTIONS
1. The capital structure of the firm is altered by substituting debt for equity and vice versa.
2. The firm pays out its entire net income (earnings after interest and taxes) as dividends.
SIGNIFICANCE
OPTIMUM CAPITAL STRUCTURE If capital structure affects firm value there may be some optimal capital structure for the firm. INVESTMENT APPRAISAL If capital structure affects the cost of capital then we may have to consider how a project is financed when evaluating it.
3. Evaluate the evidence on, and implications of capital structure theory.
TOPIC OUTLINE
i.
Introduction
i. Scope & Significance ii. Measuring Gearing iii. Impact of Debt Financing iv. Assumptions v. Measures of Cost of Capital i. Assumptions ii. Propositions iii. Rationale iv. Arbitrage Proof v. Market Imperfections vi. Extension - Capital Structure in a CAPM context
i. What effect does capital structure have on the value of the firm to its owners?
ii. What effect does capital structure have on the cost of capital to the firm?
INTENDED LEARNING OUTCOMES
On the successful completion of this section of the module students will be able to: 1. Explain the scope and significance of capital structure theory. 2. Explain and critically evaluate theories of capital structure. competing
Trading Conditions EBIT (£000) ROCE Poor 600 6% Normal 1,500 15% Good 2,400 24%
Three possible financing structures are being considered: i. Gearing 0% (Equity 10 million £1 shares) ii. Gearing 20% (Equity 8 million £1 shares, 10% Debt £2 million) iii.Gearing 60% (Equity 4 million £1 shares, 10% Debt £6 million)
ii. Increases volatility of returns to shareholders
Fulthor plc is to be set up with a total capital of £10 million. Expected results for the company depend on trading conditions shown below: