公司理财英文版课件Chap011
《公司理财》斯蒂芬A罗斯英文》PPT课件讲义
5.1 Definition and Example of a Bond
• A bond is a legally binding agreement between a borrower and a lender: – Specifies the principal amount of the loan. – Specifies the size and timing of the cash flows:
• In dollar terms (fixed-rate borrowing) • As a formula (adjustable-rate borrowing)
5.1 Definition and Example of a Bond
• Consider a U.S. government bond listed as 6 3/8 of December 2009.
N I/Y PV PMT FV
12
5
– 1,070.52
31.875 = 1,000
1,000×0.06375 2
5.3 Bond Concepts
1. Bond prices and market interest rates move in opposite directions.
2. When coupon rate = YTM, price = par value. When coupon rate > YTM, price > par value (premium bond) When coupon rate < YTM, price < par value (discount bond)
公司理财原版英文课件Chap.ppt
Interest Rates and Bond Valuation
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
Key Concepts and Skills
PV
$31.875 .11 2
1
1 (1.055)10
$1,000 (1.055)10
$825.69
8-9
YTM and Bond Value
When the YTM < coupon, the bond
1300
trades at a premium.
Bond Value
Know the important bond features and bond types Understand bond values and why they fluctuate Understand bond ratings and what they mean Understand the impact of inflation on interest
Bond Concepts
Bond prices and market interest rates move in opposite directions.
When coupon rate = YTM, price = par value
When coupon rate > YTM, price > par value (premium bond)
volatility with respect to changes in the discount rate.
公司理财英文版第十一章
59,730
99,730
159,504
40.9%
11-7
Sensitivity Analysis
• What happens to NPV when we change one variable at a time • This is a subset of scenario analysis where we are looking at the effect of specific variables on NPV • The greater the volatility in NPV in relation to a specific variable, the larger the forecasting risk associated with that variable, and the more attention we want to pay to its estimation
• Example: What is the average cost and marginal cost under each situation in the previous example
– Produce 1,000 units: Average = 18,000 / 1000 = $18 – Produce 5,000 units: Average = 78,000 / 5000 = $15.60
11-10
Making a Decision
• Beware “Paralysis of Analysis” • At some point you have to make a decision • If the majority of your scenarios have positive NPVs, then you can feel reasonably comfortable about accepting the project • If you have a crucial variable that leads to a negative NPV with a small change in the estimates, then you may want to forego the project
英文版公司理财chapter-1课件
Making good investment and financing decisions is the chief task of the financial manager.
英文版公司理财chapter-1
7
The Investment Decision
• Investment decision /capital budgeting decision: decision to invest in
2750% Deb50t % 3D0e%bEt quity 5705% Equity
If how you slice the pie affects the size of the pie, then the capital structure decision matters.
英文版公司理财chapter-1
4. Understand why conflicts of interest arise, especially in large, public corporations
5. Explain how corporations mitigate conflicts and encourage ethical behavior
英文版公司理财chapter-1
Current Liabilities Long-Termபைடு நூலகம்Debt
Shareholders’ Equity
13
• The choice between debt and equity financing is often called the
capital structure decision
2
Chapter 1
The Corporation and the Financial Manager
公司理财英文版
公司理财英文版Company Financial ManagementIntroductionFinancial management is a critical aspect of running a successful business. It involves planning, organizing, controlling, and monitoring the company's financial resources to achieve its objectives. Effective financial management ensures that the company has sufficient funds, optimal utilization of resources, and profitability. This article provides an overview of the key components of company financial management, including financial planning, budgeting, forecasting, cash flow management, and risk management.Financial PlanningFinancial planning is the foundation of effective financial management. It involves assessing the company's current financial position, setting financial objectives, and developing strategies to achieve those objectives. The financial planning process includes analyzing the company's revenue and expenses, cash flow, assets and liabilities, and financial ratios. This analysis helps identify areas of improvement and opportunities for growth.One of the key aspects of financial planning is setting realistic and achievable financial goals. These goals can be short-term or long-term and should align with the company's overall business objectives. Financial goals may include increasing revenue, reducing expenses, improving profitability, or expanding into newmarkets. Setting specific, measurable, attainable, relevant, and time-bound (SMART) goals enhances the effectiveness of financial planning.BudgetingBudgeting is an integral part of financial management as it helps allocate financial resources effectively. A budget is a comprehensive plan that outlines the company's expected revenue and expenses for a specific period, typically a year. It serves as a roadmap for financial decision-making and helps control spending, ensure profitability, and allocate resources efficiently.The budgeting process involves gathering relevant financial data, estimating revenue and expenses, and projecting cash flows. The budget should be realistic, achievable, and aligned with the company's financial goals. It should also be flexible enough to adapt to changing circumstances and market conditions. Regular monitoring and review of the budget help identify variances and take corrective actions if necessary.ForecastingForecasting is an essential component of financial management as it helps anticipate future financial trends and outcomes. It involves analyzing historical data, market trends, and economic indicators to predict the company's financial performance. Forecasting enables companies to make informed decisions, identify potential risks and opportunities, and develop strategies to mitigate risks and exploit opportunities.Cash Flow ManagementCash flow management is crucial for the financial stability and success of a company. It involves monitoring and controlling the company's cash inflows and outflows to ensure sufficient liquidity and meet financial obligations. Effective cash flow management minimizes the risk of cash shortages, improves financial flexibility, and enhances the company's ability to invest in growth opportunities.To manage cash flow effectively, companies need to accurately forecast cash inflows from sales, investments, and financing activities. They also need to monitor and control cash outflows, including payments to suppliers, employee salaries, and loan repayments. Efficient working capital management, such as optimizing inventory levels and extending payment terms with suppliers, can help improve cash flow.Risk ManagementRisk management is an integral part of company financial management. It involves identifying, assessing, and mitigating financial risks that may impact the company's financial stability and performance. Some common financial risks include market risks, credit risks, liquidity risks, and operational risks.To manage financial risks effectively, companies need to develop robust risk management strategies and processes. This includes diversifying investments, hedging against currency or interest ratefluctuations, implementing internal controls and governance structures, and having effective insurance coverage. Regular monitoring and review of risk management strategies help ensure their effectiveness and relevance in the changing business environment.ConclusionEffective financial management is crucial for the success of any company. It involves planning, budgeting, forecasting, cash flow management, and risk management. Financial planning helps set realistic and achievable financial goals, while budgeting allocates financial resources effectively. Forecasting helps anticipate future financial trends and outcomes, and cash flow management ensures sufficient liquidity. Lastly, risk management mitigates financial risks that may impact the company's financial stability and performance. By implementing sound financial management practices, companies can improve profitability, maximize shareholder value, and achieve long-term sustainability.。
公司理财英文版课件Chap.ppt
• Case III – Assumptions – Corporate taxes, but no personal taxes – Bankruptcy costs
16-15
Figure 16.3
16-16
Case I - Example
• Data
– Required return on assets = 16%; cost of debt = 10%; percent of debt = 45%
• What is the cost of equity?
16-6
Example: Financial Leverage, EPS and ROE – Part I
• We will ignore the effect of taxes at this stage
• What happens to EPS and ROE when we issue debt and buy back shares of stock?
• Proposition II
– The WACC of the firm is NOT affected by capital structure
16-14
Case I - Equations
• WACC = RA = (E/V)RE + (D/V)RD
• RE = RA + (RA – RD)(D/E)
– RA is the “cost” of the firm’s business risk, i.e., the risk of the firm’s assets
公司理财原版英文课件Chap
RP X 1 ( R1 β1 F ε1 ) X 2 ( R 2 β2 F ε2 ) X N ( R N βN F εN ) RP X 1 R1 X 1 β1 F X 1ε1 X 2 R 2 X 2 β2 F X 2 ε2 X N R N X N βN F X N ε N
R 8%
R 8% 2.30 5% 1.50 (3%) 0.50 (10%) 1% R 12%
12-12
12.3 Portfolios and Factor Models
Now let us consider what happens to portfolios of stocks when each of the stocks follows a one-factor model. We will create portfolios from a list of N stocks and will capture the systematic risk with a 1-factor model. The ith stock in the list has return:
R R 2.30 5% 1.50 (3%) 0.50 FS 1%
12-10
Systematic Risk and Betas: Example
R R 2.30 5% 1.50 (3%) 0.50 FS 1%
If it were the case that the dollar-euro spot exchange rate, S($,€), was expected to increase by 10%, but in fact remained stable during the time period, then: FS = Surprise in the exchange rate = actual – expected = 0% – 10% = – 10%
罗斯《公司理财》英文习题答案DOCchap011
公司理财习题答案第十一章Chapter 11: An Alternative View of Risk and Return: The Arbitrage Pricing Theory 11.1 Real GNP was higher than anticipated. Since returns are positively related to the level of GNP, returns should rise based on this factor.Inflation was exactly the amount anticipated. Since there was no surprise in this announcement, it will not affect Lewis-Striden returns.Interest Rates are lower than anticipated. Since returns are negatively related to interest rates, the lower than expected rate is good news. Returns should rise due to interest rates.The President’s death is bad news. Although the president was expected to retire, his retirement would not be effective for six months. During that period he would still contribute to the firm. His untimely death mean that thosecontributions would not be made. Since he was generally considered an asset to the firm, his death will cause returns to fall.The poor research results are also bad news. Since Lewis-Striden must continue to test the drug as early as expected. The delay will affect expected future earnings, and thus it will dampen returns now.The research breakthrough is positive news for Lewis Striden. Since it was unexpected, it will cause returns to rise.The competitor’s announcement is also unexpected, but it is not a welcome surprise. this announcement will lower the returns on Lewis-Striden.Systematic risk is risk that cannot be diversified away through formation of a portfolio. Generally, systematic risk factors are those factors that affect a large number of firms in the market. Note those factors do not have to equally affect the firms. The systematic factors in the list are real GNP, inflation and interest rates.Unsystematic risk is the type of risk that can be diversified away throughportfolio formation. Unsystematic risk factors are specific to the firm or industry. Surprises in these factors will affect the returns of the firm in which you are interested, but they will have no effect on the returns of firms in a different industry and perhaps little effect on other firms in the same industry. For Lewis- Striden, the unsystematic risk factors are the president’s ability to contribute to the firm, the research results and the competitor.11.2 a. Systematic Risk = 0.042(4,480– 4,416) –1.4(4.3%– 3.1%)– 0.67(11.8% –9.5%) = –0.53% b. Unsystematic Risk = – 2.6%c. Total Return = 9.5% – 0.53% – 2.6% = 6.37%11.3 ()()()11.81%1.440.3710.0Return Total c.1.44%=23-270.36=Return ic Unsystemat b.0.372%=14.0%15.2%1.903.5%-4.8%2.04=Risk Systematic a.=++=--11.4 a. Stock A:()()R R R R R A A A m m Am A =+-+=+-+βεε105%12142%...Stock B:()()R R R R R B B m m Bm B=+-+=+-+βεε130%098142%...Stock C:()R R R R R C C C m m Cm C=+-+=+-+βεε157%137142%)..(.b.()[]()[]()[]()()()()()()[]()()CB A m cB A m c m B m A m CB A P 25.045.030.0%2.14R 1435.1%925.1225.045.030.0%2.14R 37.125.098.045.02.130.0%7.1525.0%1345.0%5.1030.0%2.14R 37.1%7.1525.0%2.14R 98.0%0.1345.0%2.14R 2.1%5.1030.0R 25.0R 45.0R 30.0R ε+ε+ε+-+=ε+ε+ε+-+++++=ε+-++ε+-++ε+-+=++= c.i.()R R R A B C =+-==+-==+-=105%1215%142%)1113%09815%142%)137%157%13715%142%168%..(..46%.(......ii.R P =+-=12925%1143515%142%)138398%..(..11.5 a.Since five stocks have the same expected returns and the same betas, the portfolio also has the same expected return and beta.()R F F E E E E E p =+++++++110084169151212345...b.公司理财习题答案第十一章R F F E N E N E NAs N s are fini F F p N =++++++→∞→=++1100841690110084169121212......,...,1Nbut E te,Thus, R j p11.6To determine which investment investor would prefer, you must compute the variance of portfolios created by many stocks from either market. Note, because you know that diversification is good, it is reasonable to assume that once an investor chose the market in which he or she will invest, he or she will buy many stocks in that market. Known:E EF ====001002 and and for all i.i σσεε..Assume: The weight of each stock is 1/N; that is, X N i =1/for all i.If a portfolio is composed of N stocks each forming 1/N proportion of the portfolio, thereturn on the portfolio is 1/N times the sum of the returns on the N stocks. Recall that thereturn on each stock is 0.1+βF+ε.()()()()()()[]()()()()()()()[]()[]()[]()()[]()()()()()j i 2j i 22j i i 2222222222P P P P iP ,0.04Corr 0.01,Cov s =isvariance the ,N as limit In the ,Cov 1/N 1s 1/N s )(1/N 1/N F 2F E 1/N F E 0.10.1/N F 0.1E R E R E R Var 0.101/N 00.1E 1/N F E 0.11/N F 0.1E R E 1/N F 0.1F 0.1(1/N)R 1/N R εε+β=εε+β∞⇒εε-+ε+β=ε∑+εβ+β=ε+β=-ε+β+=-==+β+=ε+β+=ε∑+β+=ε+β+=ε+β+==∑∑∑∑∑∑∑∑()()()()()()Thus,F R f E R E R Var R Corr Var R Corr ii ip P p i j PijR 1i =++=++===+=+010*********002250040002500412212111222.........,,εεεεεεa.()()()()Corr Corr Var R Var R i j i j p pεεεε112212000225000225,,..====Since Var ()()R p 1 Var R 2p 〉, a risk averse investor will prefer to invest in the second market.b.Corr ()()εεεε112090i j j ,.,== and Corr 2i()()Var R Var R pp120058500025==..Since Var ()()risk a ,R V ar R 2p p 1〉averse investor will prefer to invest in the second market.c.()()()()Corr Var R Var R i j j p pεεεε112120050022500225,,...==== and Corr 2i Since ()()Var R Var R p p12=, a risk averse investor will be indifferentbetween investing in the two market.d. Indifference implies that the variances of the portfolio in the two marketsare equal.()()()()()()Var R Var R Corr Corr Corr Corr p pijij ijij1211222211002250040002500405=+=+=+..,..,,,.εεεεεεεε公司理财习题答案第十一章This is exactly the relationship used in part c.11.7()()()()()()()()()()()() 2.7225%1.211.5s 1.7424%1.211.2s 0.5929%1.210.7s R Var R Var 0/N Var ,N As i.b.22.30%0.22304.9725/100s 4.9725%2.251.211.5s 17.84%0.17843.1824/100s 3.1824%1.441.211.2s 12.62%1.5929/100s 1.5929%1.001.210.7s Var R Var R Var a.22C 22B 22A m 2i i j C 22C B 2B 2A 2A 2i m 2i j ======β=∴→ε∞→===⇒=+====⇒=+===⇒=+=∴ε+β=ii. APT Model: ()R R R R i F m F i =+-β%25.14)5.1)(3.36.10(3.3R %06.12)2.1)(3.36.10(3.3R %41.8)7.0)(3.36.10(3.3R C B A =-+==-+==-+= APT Model shows that assets A & B are accurately priced but asset C is overpriced. Thus, rational investors will not hold asset C.iii. If short selling is allowed, all rational investors will sell short asset C so that the price of asset C will decrease until no arbitrage opportunity exists. In other words, price of asset C should decrease until the returnbecome 14.25%.11.8 a. Let X= the proportion of security of one in the portfolio and (1-X) = theproportion of security two in the portfolio.()()[]()()[]t 222t 121t 2t 212t 111t 1t2t 1pt F F R E x 1F F R E x R X 1XR R β+β+-++β+=-+=The condition that the return of the portfolio does not depend on F 1implies:()05.0)X 1(X 0X 1X 2111=-+=β-+βThus, P=(-1,2); i.e. sell short security one and buy security two.()()()()()()5.2225.11%20%202%201R E 2p p =+-=β=+-=b. Follow the same logic as in part a, we have()()3X 05.1X 1X 0X 1X 4131==-+=β-+βWhere X is the proportion of security three in the portfolio. Thus, sell short security four and buy security three.()()()()()()075.025.03%10%102%103R E 2p p =-=β=-+=this is a risk free portfolio!c. The portfolio in part b provides a risk free return of 10% which is higher than the 5% return provided by the risk free security. To take advantage of this opportunity, borrow at the risk free rate of 5% and invest the funds in a portfolio built by selling short security four and buying security three with weights (3,-2).d. Assuming that the risk free security will not change. The price of security four ( that everyone is trying to sell short) will decrease and the price of security three ( that everyone is trying to buy ) will increase. Hence the return of security four will increase and the return of security three will decrease.The alternative is that the prices of securities three and four will remain the same, and the price of the risk-free security drops until its return is 10%.Finally, a combined movement of all security prices is also possible. The prices of security four and the risk-free security will decrease and the price of security four will increase until the opportunity disappears.E ()R j20%10% 5%()ββ1210i =2.5。
公司理财(罗斯)第2章(英文)
2-2
Sources of Information
Annual reports Wall Street Journal Internet
2.1 The Balance Sheet 2.2 The Income Statement 2.3 Net Working Capital 2.4 Financial Cash Flow 2.5 The Statement of Cash Flows 2.6 Financial Statement Analysis 2.7 Summary and Conclusions
McGraw-Hill/Irwin Corporate Finance, 7/e 2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
2-6
Debt versus Equity
Generally, when a firm borrows it gives the bondholders first claim on the firm’s cash flow. Thus shareholder’s equity is the residual difference between assets and liabilities.
Total assets
McGraw-Hill/Irwin Corporate Finance, 7/e
$1,879
$1,742
2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
公司理财英文版
公司理财英文版Company Financial ManagementFinancial management is an essential aspect of running a successful company. It involves planning, organizing, controlling, and monitoring financial resources to achieve the company's goals and objectives.The first step in financial management is creating a budget. A budget is a detailed plan that outlines the company's projected income and expenses for a specific period. It helps in allocating resources effectively and identifying areas where expenses can be reduced.To ensure effective financial management, companies need to have a system for tracking and recording financial transactions. This includes maintaining accurate and up-to-date financial statements, such as income statements, balance sheets, and cash flow statements.Another important aspect of financial management is financial analysis. This involves evaluating the company's financial performance, identifying areas of strength and weakness, and making strategic decisions based on the analysis.One of the key objectives of financial management is maximizing profitability. This can be achieved by implementing cost-cutting measures, increasing sales revenue, and optimizing financial resources.Companies also need to manage their cash flow effectively. This includes monitoring cash inflows and outflows, ensuring there is enough cash to cover expenses and investments, and managing short-term liquidity.In addition, companies need to consider long-term financial planning. This involves setting financial goals and developing strategies to achieve them, such as investment planning and capital structure management.Risk management is another important aspect of financial management. Companies need to identify and analyze potential risks, such as financial market volatility, credit risk, and operational risks, and implement strategies to mitigate them. Ultimately, effective financial management is crucial for the success and sustainability of a company. It helps in making informed decisions, maximizing profitability, and ensuring financial stability.。
公司理财课件 Chpt011
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
• In efficient markets, profitable arbitrage opportunities will quickly disappear.
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
11-4 11.1 Factor Models: Announcements, Surprises, and Expected Returns
• Any announcement can be broken down into two parts, the anticipated or expected part and the surprise or innovation:
11-3 11.1 Factor Models: Announcements, Surprises, and Expected Returns
• The return on any security consists of two parts. – First the expected returns – Second is the unexpected or risky returns.
公司理财Chap011-PPT课件
公司理财Chap011-PPT
4
Cost of Capital – Baker Corporation
公司理财Chap011-PPT
5
Cost of Debt
• Measured interest rate, or yield, paid to bondholders
• Example: $1,000 bond paying $100 annual interest – 10% yield • Calculation is complex discount rate or premium from par value bonds
公司理财Chap011-PPT
8
Adjusting Yield for Tax Considerations
• Yield to maturity indicates how much the firm has to pay on a before-tax basis
• Interest payment on a debt is a tax-deductible expense
• Capital asset pricing model (CAPM)
• Where:
= Required return on common stock; = Risk-free rate of return, usually the current rate on Treasury bill securities; = Beta coefficient (measures the historical volatility of an individual stock’s return relative to a stock market index; = return in the market as measured by an approximate index
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11-15
Using Accounting BreakEven
• Accounting break-even is often used as an early stage screening number • If a project cannot break-even on an accounting basis, then it is not going to be a worthwhile project • Accounting break-even gives managers an indication of how a project will impact accounting profit
59,730
99,730
159,504
40.9%
11-7
Sensitivity Analysis
• What happens to NPV when we change one variable at a time • This is a subset of scenario analysis where we are looking at the effect of specific variables on NPV • The greater the volatility in NPV in relation to a specific variable, the larger the forecasting risk associated with that variable, and the more attention we want to pay to its estimation
Chapter 11
Project Analysis and Evaluaห้องสมุดไป่ตู้ion
McGraw-
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights
Key Concepts and Skills
• Understand forecasting risk and sources of value • Understand and be able to conduct scenario and sensitivity analysis • Understand the various forms of break-even analysis • Understand operating leverage • Understand capital rationing and its effects
11-2
Chapter Outline
• • • • Evaluating NPV Estimates Scenario and Other What-If Analyses Break-Even Analysis Operating Cash Flow, Sales Volume, and Break-Even • Operating Leverage • Capital Rationing
11-12
Example: Costs
• There are two types of costs that are important in breakeven analysis: variable and fixed
– Total variable costs = quantity * cost per unit – Fixed costs are constant, regardless of output, over some time period – Total costs = fixed + variable = FC + vQ
11-6
Summary of Scenario Analysis
Scenario Net Income Cash Flow NPV IRR Base case 19,800 59,800 15,567 15.1%
Worst Case
-15,510
24,490
-111,719
-14.4%
Best Case
Best case
6,500
66,400
39,357
19.7%
11-9
Simulation Analysis
• Simulation is really just an expanded sensitivity and scenario analysis • Monte Carlo simulation can estimate thousands of possible outcomes based on conditional probability distributions and constraints for each of the variables • The output is a probability distribution for NPV with an estimate of the probability of obtaining a positive net present value • The simulation only works as well as the information that is entered, and very bad decisions can be made if care is not taken to analyze the interaction between variables
– Accounting break-even – sales volume at which NI = 0 – Cash break-even – sales volume at which OCF =0 – Financial break-even – sales volume at which NPV = 0
• Example: What is the average cost and marginal cost under each situation in the previous example
– Produce 1,000 units: Average = 18,000 / 1000 = $18 – Produce 5,000 units: Average = 78,000 / 5000 = $15.60
11-8
Summary of Sensitivity Analysis for New Project
Scenario Unit Sales Cash Flow NPV IRR
Base case
6,000
59,800
15,567
15.1%
Worst case
5,500
53,200
-8,226
10.3%
11-11
Break-Even Analysis
• Common tool for analyzing the relationship between sales volume and profitability • There are three common break-even measures
• Best case and worst case are not necessarily probable, but they can still be possible
11-5
New Project Example
• Consider the project discussed in the text • The initial cost is $200,000, and the project has a 5-year life. There is no salvage. Depreciation is straight-line, the required return is 12%, and the tax rate is 34%. • The base case NPV is 15,567
11-16
Accounting Break-Even and Cash Flow
• We are more interested in cash flow than we are in accounting numbers • As long as a firm has non-cash deductions, there will be a positive cash flow • If a firm just breaks even on an accounting basis, cash flow = depreciation • If a firm just breaks even on an accounting basis, NPV will generally be < 0
11-3
Evaluating NPV Estimates
• NPV estimates are just that – estimates • A positive NPV is a good start – now we need to take a closer look
– Forecasting risk – how sensitive is our NPV to changes in the cash flow estimates; the more sensitive, the greater the forecasting risk – Sources of value – why does this project create value?
11-10
Making a Decision
• Beware “Paralysis of Analysis” • At some point you have to make a decision • If the majority of your scenarios have positive NPVs, then you can feel reasonably comfortable about accepting the project • If you have a crucial variable that leads to a negative NPV with a small change in the estimates, then you may want to forego the project