公司理财实务英文版(ppt 16)
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Long-Term Debt
Fixed Assets 1 Tangible 2 Intangible
© Professor Ho-Mou Wu
What longterm investments should the firm engage in?
Corporate Finance
Shareholders’ Equity
2 Intangible
Current Liabilities Long-Term
Debt
Shareholders’ Equity
© Professor Ho-Mou Wu
Corporate Finance
1-3
The Balance-Sheet Model of the Firm
The Net Working Capital Investment Decision
2750%50%30% DebtDeEbtquity
The Capital Structure decision can be viewed as
5705% Equity
how best to slice up a the
pie.
If how you slice the pie affects the size of the
Total Value of Assets:
Current Assets
Total Firm Value to Investors:
Current Liabilities
Long-Term Debt
Fixed Assets 1 Tangible 2 Intangible
© Professor Ho-Mou Wu
Introduction to Corporate Finance
• Corporate Finance addresses the following three questions:
1. What long-term investments should the firm engage in?
2. How can the firm raise money for the required investments?
Current Assets
(Financial Decision)
Net Working Capital
Current Liabilities
Long-Term Debt
Fixed Assets 1 Tangible 2 Intangible
How much shortterm cash flow does a company need to pay its bills?
Taxes (D)
Ultimately, the firm must be a cash generating activity.
© Professor Ho-Mou Wu
Government
Corporate Finance
The cash flows from the firm must exceed the cash flows from the financial markets.
• Secondary Markets
– Involve the sale of “used” securities from one investor to another.
Corporate Finance
Shareholders’ Equity
1-1
The Balance-Sheet Model of the Firm
The Capital Budgeting Decision
Current Assets
(Investment Decision)
Current Liabilities
Invests in assets
(B)
Retained cash flows (F)
Current assets
Cash flow Dividends and
Fixed assets from firm (C) debt payments (E)
Leabharlann Baidu
Financial markets
Short-term debt Long-term debt Equity shares
1-2
The Balance-Sheet Model of the Firm
The Capital Structure Decision
(Financing Decision)
Current Assets
Fixed Assets 1 Tangible
How can the firm raise the money for the required investments?
3. How much short-term cash flow does a company need to pay its bills?
4.
(RWJ ch.1)
© Professor Ho-Mou Wu
Corporate Finance
1-0
The Balance-Sheet Model of the Firm
Shareholders’ Equity
© Professor Ho-Mou Wu
Corporate Finance
1-4
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.
1-6
Financial Markets
• Primary Market
– When a corporation issues securities, cash flows from investors to the firm.
– Usually an underwriter is involved
pie, then the capital structure decision
matters.
© Professor Ho-Mou Wu
Corporate Finance
1-5
The Firm and the Financial Markets
Firm
Firm issues securities (A)
Fixed Assets 1 Tangible 2 Intangible
© Professor Ho-Mou Wu
What longterm investments should the firm engage in?
Corporate Finance
Shareholders’ Equity
2 Intangible
Current Liabilities Long-Term
Debt
Shareholders’ Equity
© Professor Ho-Mou Wu
Corporate Finance
1-3
The Balance-Sheet Model of the Firm
The Net Working Capital Investment Decision
2750%50%30% DebtDeEbtquity
The Capital Structure decision can be viewed as
5705% Equity
how best to slice up a the
pie.
If how you slice the pie affects the size of the
Total Value of Assets:
Current Assets
Total Firm Value to Investors:
Current Liabilities
Long-Term Debt
Fixed Assets 1 Tangible 2 Intangible
© Professor Ho-Mou Wu
Introduction to Corporate Finance
• Corporate Finance addresses the following three questions:
1. What long-term investments should the firm engage in?
2. How can the firm raise money for the required investments?
Current Assets
(Financial Decision)
Net Working Capital
Current Liabilities
Long-Term Debt
Fixed Assets 1 Tangible 2 Intangible
How much shortterm cash flow does a company need to pay its bills?
Taxes (D)
Ultimately, the firm must be a cash generating activity.
© Professor Ho-Mou Wu
Government
Corporate Finance
The cash flows from the firm must exceed the cash flows from the financial markets.
• Secondary Markets
– Involve the sale of “used” securities from one investor to another.
Corporate Finance
Shareholders’ Equity
1-1
The Balance-Sheet Model of the Firm
The Capital Budgeting Decision
Current Assets
(Investment Decision)
Current Liabilities
Invests in assets
(B)
Retained cash flows (F)
Current assets
Cash flow Dividends and
Fixed assets from firm (C) debt payments (E)
Leabharlann Baidu
Financial markets
Short-term debt Long-term debt Equity shares
1-2
The Balance-Sheet Model of the Firm
The Capital Structure Decision
(Financing Decision)
Current Assets
Fixed Assets 1 Tangible
How can the firm raise the money for the required investments?
3. How much short-term cash flow does a company need to pay its bills?
4.
(RWJ ch.1)
© Professor Ho-Mou Wu
Corporate Finance
1-0
The Balance-Sheet Model of the Firm
Shareholders’ Equity
© Professor Ho-Mou Wu
Corporate Finance
1-4
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.
1-6
Financial Markets
• Primary Market
– When a corporation issues securities, cash flows from investors to the firm.
– Usually an underwriter is involved
pie, then the capital structure decision
matters.
© Professor Ho-Mou Wu
Corporate Finance
1-5
The Firm and the Financial Markets
Firm
Firm issues securities (A)