个人理财英文版第二章
个人理财英文版第一章
1-12
Goal-Setting Guidelines Effective Goals should be:
– Realistic – Stated
in specific, measurable
terms – Based on a time frame – Action-oriented
1-13
Assess Personal and Financial Opportunity Costs of Financial Decisions
• Opportunity cost = what you give up making a choice
Objective 3
– The trade-off of a decision
– Not always measurable in dollars; may be time – Consider lost opportunities resulting from your decisions
– /
1-7
Financial Planning in Our Economy Global Factors
• U.S economy affected by foreign investors and competition from foreign companies • Level of imports/exports affects available supply of dollars • Level of foreign investment affects domestic money supply • Money supply affects consumer interest rates
银行个人理财战略中英文对照外文翻译文献
银行个人理财战略中英文对照外文翻译文献随着全球化的深入推进，个人理财的重要性日益凸显。
在众多金融机构中，银行以其专业的服务和丰富的产品线成为了人们进行个人理财的首选。
本文将对银行个人理财战略的中英文对照外文翻译文献进行探讨。
银行个人理财战略是指银行为个人客户提供的一种全方位的财富管理服务，包括投资、储蓄、保险、信托等。
通过制定和执行个人理财战略，客户可以有效地进行财富的积累、保值和增值。
投资策略：根据客户的财务状况和风险承受能力，制定合适的投资策略，包括股票、债券、基金、房地产等。
储蓄策略：通过定期存款、通知存款、活期存款等方式，实现资金的保值和增值。
保险策略：为客户推荐合适的保险产品，如寿险、意外险、健康险等，实现风险的有效转嫁。
信托策略：为客户提供个性化的信托服务，满足其特定的财富管理需求。
了解客户需求：通过问卷调查、面谈等方式，了解客户的财务状况、风险承受能力、投资目标等。
制定理财方案：根据客户需求，制定个性化的理财方案，包括投资策略、储蓄策略、保险策略、信托策略等。
定期评估与调整：定期对客户的理财方案进行评估，根据市场变化和客户需求进行调整。
银行个人理财战略是现代社会中个人财富管理的重要组成部分。
通过制定和执行合适的个人理财战略，客户可以有效地进行财富的积累、保值和增值。
银行也需要不断地优化其个人理财服务，提高服务质量，满足客户的个性化需求。
在全球化的大背景下，对银行个人理财战略的中英文对照外文翻译文献进行探讨，不仅可以促进国内银行提升个人理财服务的水平，也可以帮助国内银行更好地走向国际市场，服务于全球客户。
随着经济的发展和人民收入水平的提高，个人理财业务逐渐成为银行业务的重要组成部分。
本文以中国建设银行个人理财业务为研究对象，对其战略进行研究，旨在提高该行个人理财业务的竞争力，更好地满足客户需求。
中国建设银行是我国五大国有商业银行之一，拥有丰富的金融资源和良好的品牌形象。
近年来，该行个人理财业务发展迅速，但也暴露出一些问题，如产品同质化严重、客户服务不到位等。
个人理财规划外文翻译文献编辑
文献信息：文献标题：A Study of Personal Financial Planning Process and Socio-Economic Decision-Making in Households（个人理财规划过程与家庭社会经济决策研究）国外作者：S Shah，AS Bhatt文献出处：《Social Science Electronic Publishing》,2016字数统计：英文2308单词，13376字符；中文4089汉字外文文献：A Study of Personal Financial Planning Process andSocio-Economic Decision-Making in Households Abstract In the current era, planning of finance is assuming extreme importance as myriad financial products are available and individuals’ demands are increasing. Personal financial planning is a process which outlines one’s financial objectives and takes financial decisions in a manner that his goals are achieved. The process of financial planning and decision-making in household has been studied independently by various researchers. However, these are essentially intertwined in nature. In view of this, the researchers have undertaken the task of understanding whether individuals followed the Personal Financial Planning process consciously and whether this was linked to household decision-making, especially in the social and economic areas. This paper also examines gender inequality in household decision-making and how household decision-making evolves with time. The study was conducted in the Ahmedabad district of Gujarat, and a sample size of 196 respondents was selected on judgmental basis to meet the objective of the study. The response rate was 78% (n=150) which is considered to be acceptable for a research study. The sample size was equally split between males and females. The survey was carried out in June- July, 2014.Analysis has been done by using Analysis of Variance(ANOV A), Binary Logistic Regression and Chi-square.It was found that age influences components of Personal financial planning (PFP) like determining one’s financial objectives, knowledge of finance, satisfaction regarding current economic status, and retirement planning. Likewise, gender, income, education, profession and marital status affect various components of PFP. It was also found that household economic and social decisions were related to income and investment of the respondent. Further, it could be inferred that in a household, males held more bargaining power in taking economic decisions, while females exerted more influence in taking social decisions.Key-words: Personal financial planning, financial objective, household economic decisions, household social decisions1.IntroductionHousehold financial management is that activity which is concerned with planning and controlling finances of individuals and households. The concept ‘personal financial management’ is of immense interest to researchers, academicians and policy formulators in the context of global economic crisis and financial inclusion in developing countries. As in the case of a nation or business institution, finance plays a crucial role in the life of an individual, to rich or poor. Mobilisation of finance and its wise and efficient deployment play a strategic role in the well-being of a nation or institution and at the most in the case of a person who is the base or starting point of any economic activity. Personal finance as a branch of economics deals with budgeting, saving, investing, borrowing, lending, insuring, and diversifying.Personal financial planning denotes the process of determining whether and how an individual can meet life goals through the proper management of financial sources.(CFP Board, 2005) Financial literacy and financial well-being are mutually related with each other (UNDP and PFIP, 2010). Financial well-being is the ability to have wealth to serve life - to have the financial means to comfortably attain whatever personal goals one has to enjoy an acceptable lifestyle. Sociological research data indicate that fourfactors strongly predict happiness and overall well-being in most cultures: health, economic status, employment, and family relationships. People are happier when they are healthy, employed, married or in a committed relationship, and financially secure. There is a relationship between an individual’s ability to do something (competence) and well-being (both self-perceived happiness and economic well-being). Well- being is, at least in part, a product of competent behaviour enacted consistently over time. Financial capability and financial competence therefore influence a person’s well-being. The opportunity accorded to people to engage with the formal financial system and how well they manage the money they have will influence their standard of living and the standard of living of those for whom they are responsible.Like never before, researchers, public authorities, community groups, industry associations and international organisations, are initiating financial literacy programmes and want to understand how people can become financially literate, or in other words, have the knowledge, understanding, skills and competence to deal with everyday financial matters and make the right choices for their needs.2.Literature Review2.1.Financial Literacy & PlanningVery few articles and research papers were found those have founded identical theories of personal financial planning. The term personal finance is having its root in micro-economics, finance and behavioral science as this area originated from home economics to various finance theories to behavioral finance. An Individual, as a consumer, is a rational being who tries to use his or her money income to derive the utmost amount of consummation or utility from it. Consumers want to get "the most for their money" or, to exceed their total utility as per ‘Maximisation of utility’ theory. Money is scarce in nature and due to this, consumers tend to be rational in their purchasing decisions. A consumer would spend his money on the best possible purpose or product and only when needed that guarantees optimum utility or a complete sense of satisfaction.Considering the importance of financial literacy, in RBI-OECD Workshop onFinancial Literacy, Bengaluru, in March, 2010 Sri Pranabkumar Mukerjee, Hon’ble Minister for Finance in his speech narrated “Financial literacy and education plays a crucial role in financial inclusion.” He further added that research and existing literature in financial literacy have typically associated an individual’s knowledge of economics and finance with his financial decisions related to savings, spending, borrowing, retirement planning, or portfolio choice. Today, financial competence has become essential due to complex choices and, while the policies need to enable access, the responsibility for saving and investing for the future primarily lies with the individuals. Another study by Miller M., Godfrey N., Levesque B. and Stark E. (2009) discussed the importance of financial literacy for consumers in developing countries, especially in the context of the global financial crisis.The authors stated that financial literacy was an active process, in which communicating information was only the beginning: empowering consumers to take action to improve their financial well-beingwas the ultimate goal. This study presented empirical evidence on thevalue of financial literacy programs and made a case for further research in determining the most effective financial literacy tools, programs and public policies, especially in the context of developing countries. Lusardi A. (2001), a world famous financial literacy scholar and academician, in her article ‘Financial literacy around the world: an overview’ stated that in an increasingly risky and globalised market-place, people must be able to make well-informed financial decisions.2.2.Socio-Economic decisions in householdHousehold decision-making affects many choices with important consequences including the distribution of income, allocation of resources, allocation of time, purchase of goods, and fertility decisions. If there is gender inequality in household decision making then this affects the economic well-being of women and children in the household. Blood and Wolfe (1960) in their study based on households in the Detroit area of the United States, found that comparative resources of the wife and husband were more important determinants in decision-making and power than social norms. The spouse with the greater resource base was more likely to have more decision making power. Similar studies done in lower and middle-income countriesreported different results. Research in Yugoslavia and Greece found that husband’s socio-economic resources were negatively related to his power (Buric and Zecevic 1967, Safilios- Rothschild 1967). A study conducted in India by Rammu (1988) which included urban, dual and single income earning households found that the more resources the partner brought into the marriage, in terms of education, income and occupational status, the more decision-making power he/she possessed. He also found that women who were gainfully employed exercised greater authority in all spheres of decision-making compared to women engaged in domestic housework only. However, even employed women did not succeed in negotiating a noticeable change in the allocation of domestic housework, perhaps a consequence of the timeless social norm of women doing housework. In one more study conducted in Venezuela (Lawrence and Mancini 1998) focused on decision-making concerning four subjects: purchase of household goods, change in residence, household finances and children’s education. The study found that while a majority of households made decisions jointly, more women made decisions concerning the purchase of household goods and children’s education compared to men, while men dominated decisions concerning household finances and change in residence.The process of financial planning and decision-making in household has been studied independently in the previous researches. However, these are essentially intertwined and if one wants to achieve life goals, financial literacy is a necessity. In view of this, the researches undertook the task of understanding whether individuals followed the Personal Financial Planning (PFP) process consciously and whether this was linked to household decision-making, especially in the social and economic areas. Further, there is a dearth of research related to this topic especially in Gujarat state of India. Hence, the researchers carried out the study in Gujarat.3.Research MethodologyOn the basis of review of literature and evidences from psychological studies, the present study has been planned with the following objectives:1)To analyse the effect of demographic variables on household financial planning2)To find out the relationship between financial planning decisions and economic and social decisions3)To find out the gender impact on economic and social decisionsThe study was conducted in the Ahmedabad district of Gujarat, and a sample size of 196 respondents was selected on judgmental basis to meet the objectives of the study. The total number of questionnaires distributed was 196. We received 176 questionnaires, but some of them had one or more missing responses. Such questionnaires were discarded and were not considered for further analysis. The final sample size after discarding the questionnaires with missing responses was 150. Thus the response rate was 78% which is considered to be acceptable for a research study. The respondents carried equal number of males and females. The survey was carried out in June-July, 2014. The profile of the respondents with respect to demographics like age, gender, qualification, income, marital status and household investments has been presented in the data analysis section.The research design for the study is descriptive in nature. The questionnaire constructed for the study included several questions which were continuous and categorical in nature. The survey consisted of questions that covered demographics, financial attitude towards personal financial planning, preferences for investment avenues, and purposes for investment.Definition of ConstructsThe components of personal financial planning were obtained through literature review regarding how individuals consider each component in their household financial planning decisions.•Financial Objective: Financial objectives are life goals converted into monetary terms. They can be categorised based on time period- Short term, Medium term and Long term financial objectives.•Knowledge: Knowledge of financial products, terms, financial services and financial markets required for personal financial management.•Satisfaction: Satisfaction in context to personal financial components viz. obtaining, saving, borrowing, investment planning.•Tax efficiency: Proper management of financial resources to avail various rebates and concessions thereby reducing tax liability.•Insurance Coverage: Adequate insurance coverage of life, health and property against risks associated.•Retirement Income: Availability of sufficient corpus to maintain the same standard of living in non-earning years.Data Analysis ApproachAnalysis is done using SPSS software 19.0 and Microsoft excel.Description of Analytical Tools•To find out the impact of the demographical variables on household financial planning, One-Way Analysis of Variance (ANOV A) has been applied for each component identified through literature review and each demographic variable viz. gender, age, income, education, profession and marital status.•To find out the association between financial and socio-economic decisions, Chi square has been applied.•To further analyse the gender impact on economic and social decisions Bivariate Logistic regression is applied where gender is taken as predictor variable and decision taker as outcome variable.4.Managerial ImplicationsThere is significant association between gender and financial objective, knowledge of finance and retirement planning, wherein males agree more to having knowledge and adequate retirement planning.•The older age group (40 – 60 years) disagree more as compared to other age groups when it comes to satisfaction, financial objective, knowledge and retirement planning processes of financial planning.•The higher income group (above 8 lacs) disagree more when it comes to deriving satisfaction from the current PFP, however, the low income group agreed more to tax efficiency as they fall in the tax exempted category.•The non-employed group had less knowledge of the formal financial planning process as compared to the salaried and business groups, and the business class significantly differed from other two groups for retirement planning component.•The marital status is related to several components of PFP, viz. financial objective, knowledge, tax efficiency, and insurance coverage and the categories differ among themselves marginally for these components. However, the divorced category was found to be lacking on the financial objectives and satisfaction part.Looking at the above findings, it became increasingly clear that the typical target group for conducting financial literacy programs would consist of young and middle-aged, females who are home-makers. But the next question was whether they are influential in household decision- making. If they are not typical decision-makers, the training shall not impact the actual decisions taken in the household. Hence, a few significant economic and social decisions of the household were identified and the role of females was studied. The analysis indicated that males play a dominant role in taking economic decisions while females play a leading role in taking social decisions of the household. Hence, the financial literacy programs while targeting the above-mentioned group should especially capture the process of PFP, with a focus on social decisions taken in the household.中文译文：个人理财规划过程与家庭社会经济决策研究摘要在当前时代，随着金融产品的大量激增，以及个人需求的不断上升，理财规划开始变得非常重要。
合理理财英文作文
合理理财英文作文英文：As a personal finance enthusiast, I believe that proper financial management is crucial in achieving financial stability and security. To achieve this, one must have a clear understanding of their financial goals and create a well-thought-out financial plan.Firstly, it is important to set financial goals thatare realistic and achievable. These goals can be short-term, such as saving up for a vacation, or long-term, such as saving for retirement. Once these goals are set, it is important to create a budget that allows for saving and investing towards these goals.Secondly, it is important to diversify investments to minimize risk. Investing solely in one type of asset, such as stocks, can be risky as the market can be volatile. Diversifying investments can include investing in stocks,bonds, real estate, and other assets.Thirdly, it is important to regularly review and adjust the financial plan. Life circumstances can change, and financial goals may need to be adjusted accordingly. Regularly reviewing the financial plan can ensure that it is still aligned with one's goals and needs.In addition, it is important to seek professional advice when necessary. Financial advisors can provide guidance on investment options and can help create a financial plan that is tailored to one's needs and goals.Overall, proper financial management involves setting realistic goals, diversifying investments, regularly reviewing and adjusting the financial plan, and seeking professional advice when necessary.中文：作为一个个人理财爱好者，我认为合理的财务管理对于实现财务稳定和安全至关重要。
个人理财英文版第二章
• Insolvency:
N–eIntabWilityotrotphay debts when due – Liabilities far exceed assets
2-14
Sample Balance Sheet
2-15
Ways to Increase Net Worth
Documents re: purchase and sale of real estate Copies of tax returns and supporting data
Indefinitely
As long as you own them Indefinitely
7 years minimum 10 years better
RATIO
Calculation
Interpretation
Debt Ratio
Liabilities divided by net worth
Low debt is best
Curent Ratio Liquidity Ratio
Liquid assets divided by current liabilties
Money Management Troubles & Debt
Getting out of debt:
2-5
An Organized Personal Financial Records System
Provides a basis for:
• Handling daily business affairs, such as bill paying • Planning and measuring financial
个人理财英文作文答案
个人理财英文作文答案下载温馨提示:该文档是我店铺精心编制而成，希望大家下载以后，能够帮助大家解决实际的问题。
文档下载后可定制随意修改，请根据实际需要进行相应的调整和使用，谢谢!并且，本店铺为大家提供各种各样类型的实用资料，如教育随笔、日记赏析、句子摘抄、古诗大全、经典美文、话题作文、工作总结、词语解析、文案摘录、其他资料等等，如想了解不同资料格式和写法，敬请关注!Download tips: This document is carefully compiled by theeditor. I hope that after you download them,they can help yousolve practical problems. The document can be customized andmodified after downloading,please adjust and use it according toactual needs, thank you!In addition, our shop provides you with various types ofpractical materials,such as educational essays, diaryappreciation,sentence excerpts,ancient poems,classic articles,topic composition,work summary,word parsing,copyexcerpts,other materials and so on,want to know different data formats andwriting methods,please pay attention!I need to save some money. For example, I can cut down on eating out and shopping.It's important to have a budget. That way I know where my money is going.Investing can be a good idea. But I have to learn more about it first.Sometimes I think about buying a lottery ticket. Maybe I'll get lucky.Credit cards can be handy, but I have to be careful not to overspend.I should review my financial situation regularly. See if I'm on the right track.。
个人理财英文作文
个人理财英文作文英文回答：Personal Finance: A Comprehensive Guide to Mastering Your Money。
As Benjamin Franklin famously said, "A penny saved is a penny earned." Managing personal finances effectively is a crucial aspect of financial independence and overall well-being. It involves understanding your income, expenses, savings, investments, and financial goals. By embracing responsible financial habits, you can take control of your financial destiny and achieve your aspirations.Step 1: Track Your Income and Expenses。
The foundation of personal finance is understandingyour cash flow. You can use a budgeting app, spreadsheet,or simply a notebook to track every dollar that comes inand goes out. Categorize your expenses (e.g., housing, food,transportation) to identify areas where you can cut back.Step 2: Create a Budget。
个人理财相关的英语口语
个人理财相关的英语口语个人理财相关的英语口语个人理财，是在对个人收入、资产、负债等数据进行分析整理的基础上，根据个人对风险的偏好和承受能力，结合预定目标运用诸如储蓄、保险、证券、外汇、收藏、住房投资等多种手段管理资产和负债，合理安排资金，从而在个人风险可以接受范围内实现资产增值的最大化的过程。
下面有店铺整理的关于个人理财的英语口语，欢迎大家阅读!Dialouge 1A:Can you lend me fifty bucks?A:你可以借我50美元吗?B:What? Again? Why do you keep running out of money?B:什么?又借?你怎么老是缺钱?A:I guess I don't earn enough.A:我想是赚得不够多。
B:No,I think it's how you budget your life, that's the problem.B:不，我想是你没有好好计划开支，这才是问题所在。
A:That's my business, not yours.A:那是我的.问题，不关你事。
B:True enough, until the time comes that you need to take my mon-ey.I don't know where you're wasting your money but I think you need to take a look at what's really important.B:你说得对，可是每次你来找我借钱，我不知道你是怎么花掉你的钱的，但是你应该想想什么事情真正值得花钱。
A:So how do you survive from pay day to pay day?A:那你是怎样度过没有发工资的日子呢?B:I don't just survive. I put money away as well.I know when I get paid where most of the cash will go, and I stick to my plan. If I follow a budget I don't have any nasty surprises.B:我不仅仅“度日”，我还存钱，领了工资后，我知道钱该往什么地方花，而且我坚持这种做法，我遵循一个比较固定的预算。
个人理财英文
An Organized Personal Financial Records System
Provides a basis for:
• Handling daily business affairs, such as bill paying
• Planning and measuring financial progress
4. Connect money management activities with saving for personal financial goals
2-2
Objective 1
Identify the Main Components of Wise Money Management
• Money management = day-to-day financial activities necessary to manage current personal economic resources, while working toward long-term financial security
• Daily spending and saving decisions = central to financial planning
– Must be coordinated with needs, goals, and personal situations
2-3
Components of Money Management
account numbers – Citizenship and military papers – Adoption and custody papers – Serial numbers and photos of valuables – CDs and credit and banking account numbers – Mortgage papers and titles – List of insurance policy numbers – Stock and bond certificates – Coins and other collectibles – Copy of will
公司理财英文版第二章
US Corporation Income Statement – Table 2.2
Insert new Table 2.2 here (US Corp Income Statement)
2-19
Hale Waihona Puke Income Statement Analysis
• There are three things to keep in mind when analyzing an income statement:
2-13
• Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value? A. real estate investment B. good reputation of the company C. equipment owned by the firm D. money due from a customer E. an item held by the firm for future sale
• Which one of the following accounts is the most liquid? A. inventory B. building C. accounts receivable D. equipment E. land
• Which one of the following represents the most liquid asset? A. $100 account receivable that is discounted and collected for $96 today B. $100 of inventory which is sold today on credit for $103 C. $100 of inventory which is discounted and sold for $97 cash today D. $100 of inventory that is sold today for $100 cash E. $100 accounts receivable that will be collected in full next week
英文版罗斯公司理财习题答案Chap002
CHAPTER 2ACCOUNTING STATEMENTS, TAXES AND CASH FLOWAnswers to Concepts Review and Critical Thinking Questions1.Liquidity measures how quickly and easily an asset can be converted to cash without significant lossin value. It’s desirable for firms to have high liquidity so that they have a large factor of safety in meeting short-term creditor demands. However, since liquidity also has an opportunity cost associated with it - namely that higher returns can generally be found by investing the cash into productive assets - low liquidity levels are also desirable to the firm. It’s up to the firm’s financial management staff to find a reasonable compromise between these opposing needs2.The recognition and matching principles in financial accounting call for revenues, and the costsassociated with producing those revenues, to be “booked” when the revenue process is essentially complete, not necessarily when the cash is collected or bills are paid. Note that this way is not necessarily correct; it’s the way accountants have chosen to do it.3.The bottom line number shows the change in the cash balance on the balance sheet. As such, it is nota useful number for analyzing a company.4. The major difference is the treatment of interest expense. The accounting statement of cash flowstreats interest as an operating cash flow, while the financial cash flows treat interest as a financing cash flow. The logic of the accounting statement of cash flows is that since interest appears on the income statement, which shows the operations for the period, it is an operating cash flow. In reality, interest is a financing expense, which results from the company’s choice of debt/equity. We will have more to say about this in a later chapter. When comparing the two cash flow statements, the financial statement of cash flows is a more appropriate measure of the company’s performance because of its treatment of interest.5.Market values can never be negative. Imagine a share of stock selling for –$20. This would meanthat if you placed an order for 100 shares, you would get the stock along with a check for $2,000.How many shares do you want to buy? More generally, because of corporate and individual bankruptcy laws, net worth for a person or a corporation cannot be negative, implying that liabilities cannot exceed assets in market value.6.For a successful company that is rapidly expanding, for example, capital outlays will be large,possibly leading to negative cash flow from assets. In general, what matters is whether the money is spent wisely, not whether cash flow from assets is positive or negative.7.It’s probably not a good sign for an established company, but it would be fairly ordinary for a start-up, so it depends.8.For example, if a company were to become more efficient in inventory management, the amount ofinventory needed would decline. The same might be true if it becomes better at collecting its receivables. In general, anything that leads to a decline in ending NWC relative to beginning would have this effect. Negative net capital spending would mean more long-lived assets were liquidated than purchased.9.If a company raises more money from selling stock than it pays in dividends in a particular period,its cash flow to stockholders will be negative. If a company borrows more than it pays in interest and principal, its cash flow to creditors will be negative.10.The adjustments discussed were purely accounting changes; they had no cash flow or market valueconsequences unless the new accounting information caused stockholders to revalue the derivatives. Solutions to Questions and ProblemsNOTE: All end-of-chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and readability constraints, when these intermediate steps are included in this solutions manual, rounding may appear to have occurred. However, the final answer for each problem is found without rounding during any step in the problem.Basic1.To find owner’s equity, we must construct a balance sheet as follows:Balance SheetCA $5,000 CL $4,500NFA 23,000 LTD 13,000OE ??TA $28,000 TL & OE $28,000We know that total liabilities and owner’s equity (TL & OE) must equal total assets of $28,000. We also know that TL & OE is equal to current liabilities plus long-term debt plus owner’s equity, so owner’s equity is:O E = $28,000 –13,000 – 4,500 = $10,500N WC = CA – CL = $5,000 – 4,500 = $5002. The income statement for the company is:Income StatementSales S/.527,000Costs 280,000Depreciation 38,000EBIT S/.209,000Interest 15,000EBT S/.194,000Taxes (35%) 67,900Net income S/.126,100One equation for net income is:Net income = Dividends + Addition to retained earningsRearranging, we get:Addition to retained earnings = Net income – DividendsAddition to retained earnings = S/.126,100 – 48,000Addition to retained earnings = S/.78,1003.To find the book value of current assets, we use: NWC = CA – CL. Rearranging to solve for currentassets, we get:CA = NWC + CL = $900K + 2.2M = $3.1MThe market value of current assets and fixed assets is given, so:Book value CA = $3.1M Market value CA = $2.8MBook value NFA = $4.0M Market value NFA = $3.2MBook value assets = $3.1M + 4.0M = $7.1M Market value assets = $2.8M + 3.2M = $6.0M 4.Taxes = 0.15(€50K) + 0.25(€25K) + 0.34(€25K) + 0.39(€273K – 100K)Taxes = €89,720The average tax rate is the total tax paid divided by net income, so:Average tax rate = €89,720 / €273,000Average tax rate = 32.86%.The marginal tax rate is the tax rate on the next €1 of earnings, so the marginal tax rate = 39%.5.To calculate OCF, we first need the income statement:Income StatementSales 元13,500Costs 5,400Depreciation 1,200EBIT 元6,900Interest 680Taxable income 元6,220Taxes (35%) 2,177Net income 元4,043OCF = EBIT + Depreciation – TaxesOCF = 元6,900 + 1,200 – 2,177OCF = 元5,923 capital spending = NFA end– NFA beg + DepreciationNet capital spending = £4,700,000 – 4,200,000 + 925,000 Net capital spending = £1,425,0007.The long-term debt account will increase by $8 million, the amount of the new long-term debt issue.Since the company sold 10 million new shares of stock with a $1 par value, the common stock account will increase by $10 million. The capital surplus account will increase by $16 million, the value of the new stock sold above its par value. Since the company had a net income of $7 million, and paid $4 million in dividends, the addition to retained earnings was $3 million, which will increase the accumulated retained earnings account. So, the new long-term debt and stockholders’ equity portion of the balance sheet will be:Long-term debt $ 68,000,000Total long-term debt $ 68,000,000Shareholders equityPreferred stock $ 18,000,000Common stock ($1 par value) 35,000,000Accumulated retained earnings 92,000,000Capital surplus 65,000,000Total equity $ 210,000,000Total Liabilities & Equity $ 278,000,0008.Cash flow to creditors = Interest paid – Net new borrowingCash flow to creditors = €340,000 – (LTD end– LTD beg)Cash flow to creditors = €340,000 – (€3,100,000 – 2,800,000)Cash flow to creditors = €340,000 – 300,000Cash flow to creditors = €40,0009. Cash flow to stockholders = Dividends paid – Net new equityCash flow to stockholders = €600,000 – [(Common end + APIS end) – (Common beg + APIS beg)]Cash flow to stockholders = €600,000 – [(€855,000 + 7,600,000) – (€820,000 + 6,800,000)]Cash flow to stockholders = €600,000 – (€7,620,000 – 8,455,000)Cash flow to stockholders = –€235,000Note, APIS is the additional paid-in surplus.10. Cash flow from assets = Cash flow to creditors + Cash flow to stockholders= €40,000 – 235,000= –€195,000Cash flow from assets = –€195,000 = OCF – Change in NWC – Net capital spending= OCF – (–€165,000) – 760,000= –€195,000Operating cash flow = –€195,000 – 165,000 + 760,000= €400,000Intermediate11. a.The accounting statement of cash flows explains the change in cash during the year. Theaccounting statement of cash flows will be:Statement of cash flowsOperationsNet income ZW$125Depreciation 75Changes in other current assets (25)Total cash flow from operations ZW$175Investing activitiesAcquisition of fixed assets ZW$(175)Total cash flow from investing activities ZW$(175)Financing activitiesProceeds of long-term debt ZW$90Current liabilities 10Dividends (65)Total cash flow from financing activities ZW$35Change in cash (on balance sheet) ZW$35b.Change in NWC = NWC end– NWC beg= (CA end– CL end) – (CA beg– CL beg)= [(ZW$45 + 145) – 70] – [(ZW$10 + 120) – 60)= ZW$120 – 70= ZW$50c.To find the cash flow generated by the firm’s assets, we need the operating cash flow, and thecapital spending. So, calculating each of these, we find:Operating cash flowNet income ZW$125Depreciation 75Operating cash flow ZW$200Note that we can calculate OCF in this manner since there are no taxes.Capital spendingEnding fixed assets ZW$250Beginning fixed assets (150)Depreciation 75Capital spending ZW$175Now we can calculate the cash flow generated by the firm’s assets, which is:Cash flow from assetsOperating cash flow ZW$200Capital spending (175)Change in NWC (50)Cash flow from assets ZW$(25)Notice that the accounting statement of cash flows shows a positive cash flow, but the financial cash flows show a negative cash flow. The cash flow generated by the firm’s assets is a better number for analyzing the firm’s performance.12.With the information provided, the cash flows from the firm are the capital spending and the changein net working capital, so:Cash flows from the firmCapital spending $(3,000)Additions to NWC (1,000)Cash flows from the firm $(4,000)And the cash flows to the investors of the firm are:Cash flows to investors of the firmSale of short-term debt $(7,000)Sale of long-term debt (18,000)Sale of common stock (2,000)Dividends paid 23,000Cash flows to investors of the firm $(4,000)13. a. The interest expense for the company is the amount of debt times the interest rate on the debt.So, the income statement for the company is:Income StatementSales £1,000,000Cost of goods sold 300,000Selling costs 200,000Depreciation 100,000EBIT £400,000Interest 100,000Taxable income £300,000Taxes (35%) 105,000Net income £195,000b. And the operating cash flow is:OCF = EBIT + Depreciation – TaxesOCF = £400,000 + 100,000 – 105,000OCF = £395,00014.To find the OCF, we first calculate net income.Income StatementSales Au$145,000Costs 86,000Depreciation 7,000Other expenses 4,900EBIT Au$47,100Interest 15,000Taxable income Au$32,100Taxes 12,840Net income Au$19,260Dividends Au$8,700Additions to RE Au$10,560a.OCF = EBIT + Depreciation – TaxesOCF = Au$47,100 + 7,000 – 12,840OCF = Au$41,260b.CFC = Interest – Net new LTDCFC = Au$15,000 – (–Au$6,500)CFC = Au$21,500Note that the net new long-term debt is negative because the company repaid part of its long-term debt.c.CFS = Dividends – Net new equityCFS = Au$8,700 – 6,450CFS = Au$2,250d.We know that CFA = CFC + CFS, so:CFA = Au$21,500 + 2,250 = Au$23,750CFA is also equal to OCF – Net capital spending – Change in NWC. We already know OCF.Net capital spending is equal to:Net capital spending = Increase in NFA + DepreciationNet capital spending = Au$5,000 + 7,000Net capital spending = Au$12,000Now we can use:CFA = OCF – Net capital spending – Change in NWCAu$23,750 = Au$41,260 – 12,000 – Change in NWC.Solving for the change in NWC gives Au$5,510, meaning the company increased its NWC by Au$5,510.15.The solution to this question works the income statement backwards. Starting at the bottom:Net income = Dividends + Addition to ret. earningsNet income = $900 + 4,500Net income = $5,400Now, looking at the income statement:EBT –EBT × Tax rate = Net incomeRecognize that EBT × tax rate is simply the calculation for taxes. Solving this for EBT yields: EBT = NI / (1– tax rate)EBT = $5,400 / 0.65EBT = $8,308Now we can calculate:EBIT = EBT + interestEBIT = $8,308 + 1,600EBIT = $9,908The last step is to use:EBIT = Sales – Costs – DepreciationEBIT = $29,000 – 13,000 – DepreciationEBIT = $9,908Solving for depreciation, we find that depreciation = $6,092.16.The balance sheet for the company looks like this:Balance SheetCash ¥175,000 Accounts payable ¥430,000 Accounts receivable 140,000 Notes payable 180,000 Inventory 265,000 Current liabilities ¥610,000 Current assets ¥580,000 Long-term debt 1,430,000Total liabilities ¥2,040,000 Tangible net fixed assets 2,900,000Intangible net fixed assets 720,000 Common stock ??Accumulated ret. earnings 1,240,000 Total assets ¥4,200,000 Total liab. & owners’ equity¥4,200,000Total liabilities and owners’ equity is:TL & OE = CL + LTD + Common stockSolving for this equation for equity gives us:Common stock = ¥4,200,000 – 1,240,000 – 2,040,000Common stock = ¥920,00017.The market value of shareholders’ equity cannot be zero. A negative market va lue in this case wouldimply that the company would pay you to own the stock. The market value of shareholders’ equity can be stated as: Shareholders’ equity = Max [(TA – TL), 0]. So, if TA is 元4,000,000 equity is equal to 元1,000,000 and if TA is 元2,500,000 equity is equal to 元0. We should note here that the book value of shareholders’ equity can be negative.18. a. Taxes Growth = 0.15($50K) + 0.25($25K) + 0.34($10K) = $17,150Taxes Income = 0.15($50K) + 0.25($25K) + 0.34($25K) + 0.39($235K) + 0.34($8.165M)= $2,890,000b. Each firm has a marginal tax rate of 34% on the next $10,000 of taxable income, despite theirdifferent average tax rates, so both firms will pay an additional $3,400 in taxes.19.Income StatementSales ₦850,000COGS 630,000A&S expenses 120,000Depreciation 130,000EBIT (₦30,000)Interest 85,000Taxable income (₦115,000)Taxes (30%) 0 income (₦115,000)b.OCF = EBIT + Depreciation – TaxesOCF = (₦30,000) + 130,000 – 0OCF = ₦100,000 income was negative because of the tax deductibility of depreciation and interest expense.However, the actual cash flow from operations was positive because depreciation is a non-cash expense and interest is a financing expense, not an operating expense.20. A firm can still pay out dividends if net income is negative; it just has to be sure there is sufficientcash flow to make the dividend payments.Change in NWC = Net capital spending = Net new equity = 0. (Given)Cash flow from assets = OCF – Change in NWC – Net capital spendingCash flow from assets = ₦100,000 – 0 – 0 = ₦100,000Cash flow to stockholders = Dividends – Net new equityCash flow to stockholders = ₦30,000 – 0 = ₦30,000Cash flow to creditors = Cash flow from assets – Cash flow to stockholdersCash flow to creditors = ₦100,000 – 30,000Cash flow to creditors = ₦70,000Cash flow to creditors is also:Cash flow to creditors = Interest – Net new LTDSo:Net new LTD = Interest – Cash flow to creditorsNet new LTD = ₦85,000 – 70,000Net new LTD = ₦15,00021. a.The income statement is:Income StatementSales $12,800Cost of good sold 10,400Depreciation 1,900EBIT $ 500Interest 450Taxable income $ 50Taxes (34%) 17Net income $33b.OCF = EBIT + Depreciation – TaxesOCF = $500 + 1,900 – 17OCF = $2,383c.Change in NWC = NWC end– NWC beg= (CA end– CL end) – (CA beg– CL beg)= ($3,850 – 2,100) – ($3,200 – 1,800)= $1,750 – 1,400 = $350Net capital spending = NFA end– NFA beg + Depreciation= $9,700 – 9,100 + 1,900= $2,500CFA = OCF – Change in NWC – Net capital spending= $2,383 – 350 – 2,500= –$467The cash flow from assets can be positive or negative, since it represents whether the firm raised funds or distributed funds on a net basis. In this problem, even though net income and OCF are positive, the firm invested heavily in both fixed assets and net working capital; it had to raise a net $467 in funds from its stockholders and creditors to make these investments.d.Cash flow to creditors = Interest – Net new LTD= $450 – 0= $450Cash flow to stockholders = Cash flow from assets – Cash flow to creditors= –$467 – 450= –$917We can also calculate the cash flow to stockholders as:Cash flow to stockholders = Dividends – Net new equitySolving for net new equity, we get:Net new equity = $500 – (–917)= $1,417The firm had positive earnings in an accounting sense (NI > 0) and had positive cash flow from operations. The firm invested $350 in new net working capital and $2,500 in new fixed assets. The firm had to raise $467 from its stakeholders to support this new investment. It accomplished this by raising $1,417 in the form of new equity. After paying out $500 of this in the form of dividends to shareholders and $450 in the form of interest to creditors, $467 was left to meet the firm’s cash flow needs for investment.22. a.Total assets 2005 = ¥650,000 + 2,900,000 = ¥3,550,000Total liabilities 2005 = ¥265,000 + 1,500,000 = ¥1,765,000Owners’ equity 2005 = ¥3,550,000 – 1,765,000 = ¥1,785,000Total assets 2006 = ¥705,000 + 3,400,000 = ¥4,105,000Total liabilities 2006 = ¥290,000 + 1,720,000 = ¥2,010,000Owners’ equity 2006 = ¥4,105,000 – 2,010,000 = ¥2,095,000b.NWC 2005 = CA05 – CL05 = ¥650,000 – 265,000 = ¥385,000NWC 2006 = CA06 – CL06 = ¥705,000 – 290,000 = ¥415,000Change in NWC = NWC06 – NWC05 = ¥415,000 – 385,000 = ¥30,000c.We can calculate net capital spending as:Net capital spending = Net fixed assets 2006 – Net fixed assets 2005 + DepreciationNet capital spending = ¥3,400,000 – 2,900,000 + 800,000Net capital spending = ¥1,300,000So, the company had a net capital spending cash flow of ¥1,300,000. We also know that net capital spending is:Net capital spending = Fixed assets bought – Fixed assets sold¥1,300,000 = ¥1,500,000 – Fixed assets soldFixed assets sold = ¥1,500,000 – 1,300,000 = ¥200,000To calculate the cash flow from assets, we must first calculate the operating cash flow. The operating cash flow is calculated as follows (you can also prepare a traditional income statement):EBIT = Sales – Costs – DepreciationEBIT = ¥8,600,000 – 4,150,000 – 800,000EBIT = ¥3,650,000EBT = EBIT – InterestEBT = ¥3,650,000 – 216,000EBT = ¥3,434,000Taxes = EBT ⨯ .35Taxes = ¥3,434,000 ⨯ .35Taxes = ¥1,202,000OCF = EBIT + Depreciation – TaxesOCF = ¥3,650,000 + 800,000 – 1,202,000OCF = ¥3,248,000Cash flow from assets = OCF – Change in NWC – Net capital spending.Cash flow from assets = ¥3,248,000 – 30,000 – 1,300,000Cash flow from assets = ¥1,918,000 new borrowing = LTD06 – LTD05Net new borrowing = ¥1,720,000 – 1,500,000Net new borrowing = ¥220,000Cash flow to creditors = Interest – Net new LTDCash flow to creditors = ¥216,000 – 220,000Cash flow to creditors = –¥4,000Net new borrowing = ¥220,000 = Debt issued – Debt retiredDebt retired = ¥300,000 – 220,000 = ¥80,00023.Balance sheet as of Dec. 31, 2005Cash €2,107 Accounts payable €2,213Accounts receivable 2,789 Notes payable 407Inventory 4,959 Current liabilities €2,620Current assets €9,855Long-term debt €7,056 Net fixed assets €17,669 Owners' equity €17,848Total assets €27,524 Total liab. & equity €27,524Balance sheet as of Dec. 31, 2006Cash €2,155 Accounts payable €2,146Accounts receivable 3,142 Notes payable 382Inventory 5,096 Current liabilities €2,528Current assets €10,393Long-term debt €8,232 Net fixed assets €18,091 Owners' equity €17,724Total assets €28,484 Total liab. & equity €28,4842005 Income Statement 2006 Income Statement Sales €4,018.00 Sales €4,312.00 COGS 1,382.00 COGS 1,569.00 Other expenses 328.00 Other expenses 274.00 Depreciation 577.00 Depreciation 578.00 EBIT €1,731.00 EBIT €1,891.00 Interest 269.00 Interest 309.00 EBT €1,462.00 EBT €1,582.00 Taxes (34%) 497.08 Taxes (34%) 537.88 Net income € 964.92 Net income €1,044.12 Dividends €490.00 Dividends €539.00 Additions to RE €474.92 Additions to RE €505.12 24.OCF = EBIT + Depreciation – TaxesOCF = €1,891 + 578 – 537.88OCF = €1,931.12Change in NWC = NWC end– NWC beg = (CA – CL) end– (CA – CL) begChange in NWC = (€10,393 – 2,528) – (€9,855 – 2,620)Change in NWC = €7,865 – 7,235 = €630Net capital spending = NFA end– NFA beg+ DepreciationNet capital spending = €18,091 – 17,669 + 578Net capital spending = €1,000Cash flow from assets = OCF – Change in NWC – Net capital spendingCash flow from assets = €1,931.12 – 630 – 1,000Cash flow from assets = €301.12Cash flow to creditors = Interest – Net new LTDNet new LTD = LTD end– LTD begCash flow to creditors = €309 – (€8,232 – 7,056)Cash flow to creditors = –€867Net new equity = Common stock end– Common stock begCommon stock + Retained earnings = T otal owners’ equityNet new equity = (OE – RE) end– (OE – RE) begNet new equity = OE end– OE beg + RE beg– RE endRE end= RE beg+ Additions to RE04Net new equity = OE end– OE beg+ RE beg– (RE beg + Additions to RE06)= OE end– OE beg– Additions to RENet new equity = €17,724 – 17,848 – 505.12 = –€629.12Cash flow to stockholders = Dividends – Net new equityCash flow to stockholders = €539 – (–€629.12)Cash flow to stockholders = €1,168.12As a check, cash flow from assets is €301.12.Cash flow from assets = Cash flow from creditors + Cash flow to stockholdersCash flow from assets = –€867 + 1,168.12Cash flow from assets = €301.12Challenge25.We will begin by calculating the operating cash flow. First, we need the EBIT, which can becalculated as:EBIT = Net income + Current taxes + Deferred taxes + InterestEBIT = £192 + 110 + 21 + 57EBIT = £380Now we can calculate the operating cash flow as:Operating cash flowEarnings before interest and taxes £380Depreciation 105Current taxes (110)Operating cash flow £375The cash flow from assets is found in the investing activities portion of the accounting statement of cash flows, so:Cash flow from assetsAcquisition of fixed assets £198Sale of fixed assets (25)Capital spending £173The net working capital cash flows are all found in the operations cash flow section of the accounting statement of cash flows. However, instead of calculating the net working capital cash flows as the change in net working capital, we must calculate each item individually. Doing so, we find:Net working capital cash flowCash £140Accounts receivable 31Inventories (24)Accounts payable (19)Accrued expenses 10Notes payable (6)Other (2)NWC cash flow £130Except for the interest expense and notes payable, the cash flow to creditors is found in the financing activities of the accounting statement of cash flows. The interest expense from the income statement is given, so:Cash flow to creditorsInterest £57Retirement of debt 84Debt service £141Proceeds from sale of long-term debt (129)Total £12And we can find the cash flow to stockholders in the financing section of the accounting statement of cash flows. The cash flow to stockholders was:Cash flow to stockholdersDividends £94Repurchase of stock 15Cash to stockholders £109Proceeds from new stock issue (49)Total £60 capital spending = NFA end– NFA beg + Depreciation= (NFA end– NFA beg) + (Depreciation + AD beg) – AD beg= (NFA end– NFA beg)+ AD end– AD beg= (NFA end + AD end) – (NFA beg + AD beg) = FA end– FA beg27. a.The tax bubble causes average tax rates to catch up to marginal tax rates, thus eliminating thetax advantage of low marginal rates for high income corporations.b.Assuming a taxable income of $100,000, the taxes will be:Taxes = 0.15($50K) + 0.25($25K) + 0.34($25K) + 0.39($235K) = $113.9KAverage tax rate = $113.9K / $335K = 34%The marginal tax rate on the next dollar of income is 34 percent.For corporate taxable income levels of $335K to $10M, average tax rates are equal to marginal tax rates.Taxes = 0.34($10M) + 0.35($5M) + 0.38($3.333M) = $6,416,667Average tax rate = $6,416,667 / $18,333,334 = 35%The marginal tax rate on the next dollar of income is 35 percent. For corporate taxable income levels over $18,333,334, average tax rates are again equal to marginal tax rates.c.Taxes = 0.34($200K) = $68K = 0.15($50K) + 0.25($25K) + 0.34($25K) + X($100K);X($100K) = $68K – 22.25K = $45.75KX = $45.75K / $100KX = 45.75%。
英文版罗斯公司理财习题答案Chap012
CHAPTER 12RISK AND THE COST OF CAPITALAnswers to Concepts Review and Critical Thinking Questions1.It is the minimum rate of return the firm must earn overall on its existing assets. If it earns more thanthis, value is created.2.Book values for debt are likely to be much closer to market values than are equity book values.3.No. The cost of capital depends on the risk of the project, not the source of the money.4.Interest expense is tax-deductible. There is no difference between pretax and aftertax equity costs.5.You are assuming that the new project’s risk is the same as the risk of the firm as a whole, and thatthe firm is financed entirely with equity.6.Two primary advantages of the SML approach are that the model explicitly incorporates the relevantrisk of the stock and the method is more widely applicable than is the DCF model, since the SML doesn’t make any assumptions about the firm’s dividends. The primary disadvantages of the SML method are (1) three parameters (the risk-free rate, the expected return on the market, and beta) must be estimated, and (2) the method essentially uses historical information to estimate these parameters.The risk-free rate is usually estimated to be the yield on very short maturity T-bills and is, hence, observable; the market risk premium is usually estimated from historical risk premiums and, hence, is not observable. The stock beta, which is unobservable, is usually estimated either by determining some average historical beta from the firm and the market’s return data, or by using beta estimates provided by analysts and investment firms.7.The appropriate aftertax cost of debt to the company is the interest rate it would have to pay if itwere to issue new debt today. Hence, if the YTM on outstanding bonds of the company is observed, the company has an accurate estimate of its cost of debt. If the debt is privately-placed, the firm could still estimate its cost of debt by (1) looking at the cost of debt for similar firms in similar risk classes, (2) looking at the average debt cost for firms with the same credit rating (assuming the firm’s private debt is rated), or (3) consulting analysts and investment bankers. Even if the debt is publicly traded, an additional complication is when the firm has more than one issue outstanding;these issues rarely have the same yield because no two issues are ever completely homogeneous.8. a.This only considers the dividend yield component of the required return on equity.b.This is the current yield only, not the promised yield to maturity. In addition, it is based on thebook value of the liability, and it ignores taxes.c.Equity is inherently riskier than debt (except, perhaps, in the unusual case where a firm’s assetshave a negative beta). For this reason, the cost of equity exceeds the cost of debt. If taxes are considered in this case, it can be seen that at reasonable tax rates, the cost of equity does exceed the cost of debt.B-2 SOLUTIONS= .12 + .75(.08) = .1800 or 18.00%9.RSupBoth should proceed. The appropriate discount rate does not depend on which company is investing;it depends on the risk of the project. Since Superior is in the business, it is closer to a pure play.Therefore, its cost of capital should be used. With an 18% cost of capital, the project has an NPV of $1 million regardless of who takes it.10.If the different operating divisions were in much different risk classes, then separate cost of capitalfigures should be used for the different divisions; the use of a single, overall cost of capital would be inappropriate. If the single hurdle rate were used, riskier divisions would tend to receive more funds for investment projects, since their return would exceed the hurdle rate despite the fact that they may actually plot below the SML and, hence, be unprofitable projects on a risk-adjusted basis. The typical problem encountered in estimating the cost of capital for a division is that it rarely has its own securities traded on the market, so it is difficult to observe the market’s valuation of the risk of the division. Two typical ways around this are to use a pure play proxy for the division, or to use subjective adjustments of the overall firm hurdle rate based on the perceived risk of the division.11.The discount rate for the projects should be lower that the rate implied by the security market line.The security market line is used to calculate the cost of equity. The appropriate discount rate for projects is the firm’s weighted average cost of capital. Since the firm’s cost of debt is generally less that the firm’s cost of equity, the rate implied by the security market line will be too high.12.Beta measures the responsiveness of a security's returns to movements in the market. Beta isdetermined by the cyclicality of a firm's revenues. This cyclicality is magnified by the firm's operating and financial leverage. The following three factors will impact the firm’s beta. (1) Revenues. The cyclicality of a firm's sales is an important factor in determining beta. In general, stock prices will rise when the economy expands and will fall when the economy contracts. As we said above, beta measures the responsiveness of a security's returns to movements in the market.Therefore, firms whose revenues are more responsive to movements in the economy will generally have higher betas than firms with less-cyclical revenues. (2) Operating leverage. Operating leverage is the percentage change in earnings before interest and taxes (EBIT) for a percentage change in sales. A firm with high operating leverage will have greater fluctuations in EBIT for a change in sales than a firm with low operating leverage. In this way, operating leverage magnifies the cyclicality of a firm's revenues, leading to a high beta. (3) Financial leverage. Financial leverage arises from the use of debt in the firm's capital structure. A levered firm must make fixed interest payments regardless of its revenues. The effect of financial leverage on beta is analogous to the effect of operating leverage on beta. Fixed interest payments cause the percentage change in net income to be greater than the percentage change in EBIT, magnifying the cyclicality of a firm's revenues. Thus, returns on highly-levered stocks should be more responsive to movements in the market than the returns on stocks with little or no debt in their capital structure.CHAPTER 12 B-3 Solutions to Questions and ProblemsNOTE: All end-of-chapter problems were solved using a spreadsheet. Many problems require multiple steps. Due to space and readability constraints, when these intermediate steps are included in this solutions manual, rounding may appear to have occurred. However, the final answer for each problem is found without rounding during any step in the problem.Basic1. With the information given, we can find the cost of equity using the CAPM. The cost of equity is:R E = .05 + 1.30 (.12 – .05) = .1410 or 14.10%2. The pretax cost of debt is the YTM of the company’s bonds, so:P0 = $1,050 = $40(PVIFA R%,24) + $1,000(PVIF R%,24)R = 3.683%YTM = 2 × 3.683% = 7.37%And the aftertax cost of debt is:R D = .0737(1 – .40) = .0442 or 4.42%3. a.The pretax cost of debt is the YTM of the company’s bonds, so:P0 = $1,080 = $50(PVIFA R%,46) + $1,000(PVIF R%,46)R = 4.58%YTM = 2 × 4.58% = 9.16%b.The aftertax cost of debt is:R D = .0916(1 – .40) = .05496 or 5.50%c.The aftertax rate is more relevant because that is the actual cost to the company.4. The book value of debt is the total par value of all outstanding debt, so:BV D = €20M + 80M = €100MTo find the market value of debt, we find the price of the bonds and multiply by the number of bonds. Alternatively, we can multiply the price quote of the bond times the par value of the bonds.Doing so, we find:MV D = 1.08(€20M) + .58(€80M) = €68MB-4 SOLUTIONSThe YTM of the zero coupon bonds is:P Z = €580 = €1,000(PVIF R%,7)R = 8.09%So, the aftertax cost of the zero coupon bonds is:R Z = .0809(1 – .35) = .0526 or 5.26%The aftertax cost of debt for the company is the weighted average of the aftertax cost of debt for all outstanding bond issues. We need to use the market value weights of the bonds. The total aftertax cost of debt for the company is:R D = .0595(€21.6/€68) + .0526(€46.4/€68) = .0548 or 5.48%5. Using the equation to calculate the WACC, we find:WACC = .60 (.16) + .40(.09)(1 – .35) = .1194 or 11.94%6. Here we need to use the debt-equity ratio to calculate the WACC. Doing so, we find:WACC = .18(1/1.60) + .10(.60/1.60)(1 – .35) = .1369 or 13.69%7.Here we have the WACC and need to find the debt-equity ratio of the company. Setting up theWACC equation, we find:WACC = .1150 = .16(E/V) + .075(D/V)(1 – .35)Rearranging the equation, we find:.115(V/E) = .16 + .075(.65)(D/E)Now we must realize that the V/E is just the equity multiplier, which is equal to:V/E = 1 + D/E.115(D/E + 1) = .16 + .04875(D/E)Now we can solve for D/E as:.06625(D/E) = .0450D/E = .6792CHAPTER 12 B-5 8. a.The book value of equity is the book value per share times the number of shares, and the bookvalue of debt is the face value of the company’s debt, so:BV E = 9.5M(£5) = £47.5MBV D = £75M + 60M = £135MSo, the total value of the company is:V = £47.5M + 135M = £182.5MAnd the book value weights of equity and debt are:E/V = £47.5/£182.5 = .2603D/V = 1 – E/V = .7397b.The market value of equity is the share price times the number of shares, so:MV E = 9.5M(£53) = £503.5MUsing the relationship that the total market value of debt is the price quote times the par value of the bond, we find the market value of debt is:MV D = .93(£75M) + .965(£60M) = £127.65MThis makes the total market value of the company:V = £503.5 + 127.65M = £631.15And the market value weights of equity and debt are:E/V = £503.5/£631.15 = .7978D/V = 1 – E/V = .2022c.The market value weights are more relevant.B-6 SOLUTIONS9.First, we will find the cost of equity for the company. The information provided allows us to solvefor the cost of equity using the CAPM, so:R E = .052 + 1.2(.09) = .1600 or 16.00%Next, we need to find the YTM on both bond issues. Doing so, we find:P1 = $930 = $40(PVIFA R%,20) + $1,000(PVIF R%,20)R = 4.54%YTM = 4.54% × 2 = 9.08%P2 = $965 = $37.5(PVIFA R%,12) + $1,000(PVIF R%,12)R = 4.13%YTM = 4.13% × 2 = 8.25%To find the weighted average aftertax cost of debt, we need the weight of each bond as a percentage of the total debt. We find:w D1 = .93($75M)/$127.65M = .546w D2 = .965($60M)/$127.65M = .454Now we can multiply the weighted average cost of debt times one minus the tax rate to find the weighted average aftertax cost of debt. This gives us:R D = (1 – .40)[(.546)(.0908) + (.454)(.0825)] = .0522 or 5.22%Using these costs and the weight of debt we calculated earlier, the WACC is:WACC = .7978(.1600) + .2022(.0522) = .1382 or 13.82%10. ing the equation to calculate WACC, we find:WACC = .105 = (1/1.8)(.15) + (.8/1.8)(1 – .35)R DR D = .0750 or 7.50%ing the equation to calculate WACC, we find:WACC = .105 = (1/1.8)R E + (.8/1.8)(.062)R E = .1394 or 13.94%CHAPTER 12 B-7 11.We will begin by finding the market value of each type of financing. We find:MV D = 4,000($1,000)(1.03) = $4,120,000MV E = 90,000($57) = $5,130,000And the total market value of the firm is:V = $4,120,000 + 5,130,000 = $9,250,000Now, we can find the cost of equity using the CAPM. The cost of equity is:R E = .06 + 1.10(.08) = .1480 or 14.80%The cost of debt is the YTM of the bonds, so:P0 = $1,030 = $35(PVIFA R%,40) + $1,000(PVIF R%,40)R = 3.36%YTM = 3.36% × 2 = 6.72%And the aftertax cost of debt is:R D = (1 – .35)(.0672) = .0437 or 4.37%Now we have all of the components to calculate the WACC. The WACC is:WACC = .0437(4.12/9.25) + .1480(5.13/9.25) = .1015 or 10.15%Notice that we didn’t include the (1 – t C) term in the WACC equation. We simply used the aftertax cost of debt in the equation, so the term is not needed here.12. a.We will begin by finding the market value of each type of financing. We find:MV D = 120,000(元1,000)(0.93) = 元111,600,000MV E = 9,000,000(元34) = 元306,000,000And the total market value of the firm is:V = 元111,600,000 + 306,000,000 = 元417,600,000So, the market value weights of the comp any’s financing is:D/V = 元111,600,000/元417,600,000 = .2672E/V = 元111,600,000/元417,600,000 = .7328B-8 SOLUTIONSb.For projects equally as risky as the firm itself, the WACC should be used as the discount rate.First we can find the cost of equity using the CAPM. The cost of equity is:R E = .05 + 1.20(.10) = .1700 or 17.00%The cost of debt is the YTM of the bonds, so:P0 = 元930 = 元42.5(PVIFA R%,30) + 元1,000(PVIF R%,30)R = 4.69%YTM = 4.69% × 2 = 9.38%And the aftertax cost of debt is:R D = (1 – .35)(.0938) = .0610 or 6.10%Now we can calculate the WACC as:WACC = .1700(.7328) + .0610 (.2672) = .1409 or 14.09%13. a.Projects X, Y and Z.ing the CAPM to consider the projects, we need to calculate the expected return of eachproject given its level of risk. This expected return should then be compared to the expected return of the project. If the return calculated using the CAPM is higher than the project expected return, we should accept the project; if not, we reject the project. After considering risk via the CAPM:E[W] = .05 + .60(.12 – .05) = .0920 < .11, so accept WE[X] = .05 + .90(.12 – .05) = .1130 < .13, so accept XE[Y] = .05 + 1.20(.12 – .05) = .1340 < .14, so accept YE[Z] = .05 + 1.70(.12 – .05) = .1690 > .16, so reject Zc. Project W would be incorrectly rejected; Project Z would be incorrectly accepted.Intermediateing the debt-equity ratio to calculate the WACC, we find:WACC = (.65/1.65)(.055) + (1/1.65)(.15) = .1126 or 11.26%Since the project is riskier than the company, we need to adjust the project discount rate for the additional risk. Using the subjective risk factor given, we find:Project discount rate = 11.26% + 2.00% = 13.26%CHAPTER 12 B-9We would accept the project if the NPV is positive. The NPV is the PV of the cash outflows plus the PV of the cash inflows. Since we have the costs, we just need to find the PV of inflows. The cash inflows are a growing perpetuity. If you remember, the equation for the PV of a growing perpetuity is the same as the dividend growth equation, so:PV of future CF = $3,500,000/(.1326 – .05) = $42,385,321The project should only be undertaken if its cost is less than $42,385,321 since costs less than this amount will result in a positive NPV.15.We will begin by finding the market value of each type of financing. We will use D1 to representthe coupon bond, and D2 to represent the zero coupon bond. So, the market value of the firm’s financing is:MV D1 = 50,000(¥1,000)(1.1980) = ¥59,900,000MV D2 = 150,000(¥1,000)(.1385) = ¥20,775,000MV P = 120,000(¥112) = ¥13,440,000MV E = 2,000,000(¥65) = ¥130,000,000And the total market value of the firm is:V = ¥59,900,000 + 20,775,000 + 13,440,000 + 130,000,000 = ¥224,115,000Now, we can find the cost of equity using the CAPM. The cost of equity is:R E = .04 + 1.10(.09) = .1390 or 13.90%The cost of debt is the YTM of the bonds, so:P0 = ¥1,198 = ¥40(PVIFA R%,50) + ¥1,000(PVIF R%,50)R = 3.20%YTM = 3.20% × 2 = 6.40%And the aftertax cost of debt is:R D2 = (1 – .40)(.0640) = .0384 or 3.84%And the aftertax cost of the zero coupon bonds is:P0 = ¥138.50 = ¥1,000(PVIF R%,60)R = 3.35%YTM = 3.35% × 2 = 6.70%R D1 = (1 – .40)(.0670) = .0402 or 4.02%Even though the zero coupon bonds make no payments, the calculation for the YTM (or price) still assumes semiannual compounding, consistent with a coupon bond. Also remember that, even though the company does not make interest payments, the accrued interest is still tax deductible for the company.B-10 SOLUTIONSTo find the required return on preferred stock, we can use the preferred stock pricing equation, which is the level perpetuity equation, so the required return on the company’s preferred stock is: R P = D1 / P0R P = ¥6.50 / ¥112R P = .0580 or 5.80%Notice that the required return in the preferred stock is lower than the required on the bonds. This result is not consistent with the risk levels of the two instruments, but is a common occurrence.There is a practical reason for this: Assume Company A owns stock in Company B. The tax code allows Company A to exclude at least 70 percent of the dividends received from Company B, meaning Company A does not pay taxes on this amount. In practice, much of the outstanding preferred stock is owned by other companies, who are willing to take the lower return since it is effectively tax exempt.Now we have all of the components to calculate the WACC. The WACC is:WACC = .0684(59.9/224.115) + .0402(20.775/224.115) + .1390(130/224.115)+ .0580(13.44/224.115)WACC = .0981 or 9.81%Challenge16.We can use the debt-equity ratio to calculate the weights of equity and debt. The debt of thecompany has a weight for long-term debt and a weight for accounts payable. We can use the weight given for accounts payable to calculate the weight of accounts payable and the weight of long-term debt. The weight of each will be:Accounts payable weight = .20/1.20 = .17Long-term debt weight = 1/1.20 = .83Since the accounts payable has the same cost as the overall WACC, we can write the equation for the WACC as:WACC = (1/2.3)(.17) + (1.3/2.3)[(.20/1.2)WACC + (1/1.2)(.09)(1 – .35)]Solving for WACC, we find:WACC = .0739 + .5652[(.20/1.2)WACC + .0488]WACC = .0739 + (.0942)WACC + .0276(.9058)WACC = .1015WACC = .1132 or 11.32%Since the cash flows go to perpetuity, we can calculate the future cash inflows using the equation for the PV of a perpetuity. The NPV is:NPV = –$45,000,000 + ($5,700,000/.1132)NPV = –$45,000,000 + 50,372,552 = $5,372,552CHAPTER 12 B-11 17.The €4 million cost of the land 3 years ago is a sunk cost and irrelevant; the €6.5 million appraisedvalue of the land is an opportunity cost and is relevant. The relevant market value capitalization weights are:MV D = 15,000(€1,000)(0.92) = €13,800,000MV E = 300,000(€75) = €22,500,000MV P = 20,000(€72) = €1,440,000The total market value of the company is:V = €13,800,000 + 22,500,000 + 1,440,000 = €37,740,000Next we need to find the cost of funds. We have the information available to calculate the cost of equity using the CAPM, so:R E = .05 + 1.3(.08) = .1540 or 15.40%The cost of debt is the YTM of the company’s outstanding bonds, so:P0 = €920 = €35(PVIFA R%,30) + €1,000(PVIF R%,30)R = 3.96%YTM = 3.96% × 2 = 7.92%And the aftertax cost of debt is:R D = (1 – .35)(.0792) = .0515 or 5.15%The cost of preferred stock is:R P = €5/€72 = .0694 or 6.94%a.The initial cost to the company will be the opportunity cost of the land, the cost of the plant,and the net working capital cash flow, so:CF0 = –€6,500,000 – 15,000,000 – 900,000 = –€22,400,000b.To find the required return on this project, we first need to calculate the WACC for thecompany. The company’s WACC is:WACC = [(€22.5/€37.74)(.1540) + (€1.44/€37.74)(.0694) + (€13.8/€37.74)(.0515)] = .1133The company wants to use the subjective approach to this project because it is located overseas.The adjustment factor is 2 percent, so the required return on this project is:Project required return = .1133 + .02 = .1333B-12 SOLUTIONSc.The annual depreciation for the equipment will be:€15,000,000/8 = €1,875,000So, the book value of the equipment at the end of five years will be:BV5 = €15,000,000 – 5(€1,875,000) = €5,625,000So, the aftertax salvage value will be:Aftertax salvage value = €5,000,000 + .35(€5,625,000 – 5,000,000) = €5,218,750ing the tax shield approach, the OCF for this project is:OCF = [(P – v)Q – FC](1 – t) + t C DOCF = [(€10,000 – 9,000)(12,000) – 400,000](1 – .35) + .35(€15M/8) = €8,196,250e.The accounting breakeven sales figure for this project is:Q A = (FC + D)/(P – v) = (€400,000 + 1,875,000)/(€10,000 – 9,000) = 2,275 unitsf.We have calculated all cash flows of the project. We just need to make sure that in Year 5 weadd back the aftertax salvage value, the recovery of the initial NWC, and the aftertax value of the land. The cash flows for the project are:Year Flow Cash0 –€22,400,0001 8,196,2502 8,196,2503 8,196,2504 8,196,2505 18,815,000Using the required return of 13.33 percent, the NPV of the project is:NPV = –€22,400,000 + €8,196,250(PVIFA13.33%,4) + €18,815,000/1.13335NPV = €11,878,610.78And the IRR is:NPV = 0 = –€22,400,000 + €8,196,250(PVIFA IRR%,4) + €18,815,000/(1 + IRR)5IRR = 30.87%。
如何理财的英文作文
如何理财的英文作文英文，How to Manage Your Finances。
Managing your finances is an important aspect of life that can help you achieve your financial goals and live a comfortable lifestyle. There are several ways to manage your finances effectively, and I will be discussing some of them below.Firstly, it is important to create a budget. A budget is a financial plan that outlines your income and expenses. By creating a budget, you can track your spending and ensure that you are not overspending. It also helps you identify areas where you can cut back on expenses and save more money.Secondly, it is important to save money. Saving money is crucial for achieving your financial goals and building wealth. You can save money by setting aside a portion of your income each month and putting it into a savingsaccount. You can also save money by cutting back on unnecessary expenses and finding ways to reduce your bills.Thirdly, it is important to invest wisely. Investing your money can help you grow your wealth and achieve your financial goals. However, it is important to invest wisely and do your research before making any investment decisions. You should also diversify your investments to reduce your risk.Lastly, it is important to stay informed about your finances. You should regularly review your budget, savings, and investments to ensure that you are on track toachieving your financial goals. You should also stay informed about financial news and trends that may affect your finances.中文，如何理财。
个人理财英文版二PPT课件
Money Management Skills
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.
Money Management Skills
Chapter Objectives
• Daily spending and saving decisions = central to financial planning
– Must be coordinated with needs, goals, and personal situations
2-3
Components of Money Management
preparation software • Account summaries and investment
performance results • Computerized versions of wills,
estate plans, and other documents
* Keep a backup!
2-5
An Organized Personal Financial Records System
Provides a basis for:
• Handling daily business affairs, such as bill paying
• Planning and measuring financial progress
• Items you refer to often
– Personal and employment records – Money management records – Tax records – Financial services records – Credit records – Consumer purchase and auto records – Housing records – Insurance records – Investment records – Estate planning and retirement records
关于理财的英文作文
关于理财的英文作文英文：When it comes to personal finance, one of the most important aspects is managing your money wisely through investments and savings. There are many different options for investing, such as stocks, bonds, mutual funds, andreal estate. Each option has its own risks and potential rewards, so it's important to do your research and choose wisely.Personally, I prefer to invest in mutual funds because they offer a diversified portfolio and are managed by professionals. This means that my investments are spread across multiple companies and industries, reducing the risk of losing all my money if one company fails. Additionally, the fund managers are constantly monitoring and adjusting the portfolio to maximize returns.Another important aspect of personal finance is savingmoney. This can be done through budgeting, cutting expenses, and setting financial goals. For example, I set a goal to save a certain amount of money each month towards a down payment on a house. By creating a budget and cutting unnecessary expenses, I was able to reach my goal within a year.In conclusion, managing personal finance requires a combination of smart investments and disciplined savings habits. By doing your research, choosing the right investments, and setting financial goals, you can achieve financial security and peace of mind.中文：谈到个人理财，最重要的方面之一就是通过投资和储蓄明智地管理你的钱。
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Benefits
1. Recap your current financial position in relation to the value of items you own and amounts you owe
2-11
Balance Sheet
A financial statement that reports what an individual or family owns and owes as of a specific date:
• ቤተ መጻሕፍቲ ባይዱlso called:
–Net worth statement –Statement of financial position
4. Connect money management activities with saving for personal financial goals
2-2
Objective 1
Identify the Main Components of Wise Money Management
• Money management = day-to-day financial activities necessary to manage current personal economic resources, while working toward long-term financial security
How much of earnings goes to sevice debt; less than 20% recommended
Savings Ratio
Monthly savings divided by gross income
5-10% recommended
2-17
The Cash Flow Statement
position • Net worth ≠ cash available
• Insolvency:
–Inability to pay debts when due –Liabilities far exceed assets
2-14
Sample Balance Sheet
2-15
Ways to Increase Net Worth
• Step 2 – Determine amounts owed –Current liabilities (< 1 year) –Long term liabilities
• Step 3 - Compute your net worth.
2-13
Net Worth
• Assets - Liabilities = Net Worth • Measurement of current financial
2-4
Money Management Troubles & Debt
• Getting out of debt: –Evaluate your credit situation –Track your spending –Plan to make payments on time –Consider other income sources –If appropriate, seek assistance
institution account numbers –Citizenship and military papers –Adoption and custody papers –Serial numbers and photos of valuables –CDs and credit and banking account numbers –Mortgage papers and titles –List of insurance policy numbers –Stock and bond certificates –Coins and other collectibles –Copy of will
2. Measure progress toward financial goals
3. Maintain information on financial activities
4. Provide information for preparing tax
forms or applying for credit
• Daily spending and saving decisions = central to financial planning
–Must be coordinated with needs, goals, and personal situations
2-3
Components of Money Management
Step 2 - Record cash outflows
– Fixed and variable expenses
Step 3 - Determine Net Cash Flow – Use this statement as a basis for creating a spending, saving and investment plan
2-5
An Organized Personal Financial Records System
Provides a basis for:
• Handling daily business affairs, such as bill paying
• Planning and measuring financial progress
✓ Increase your savings ✓ Reduce spending ✓ Increase the value of
investments and other possessions ✓ Reduce amounts owed
2-16
Evaluating Financial Progress Ratios
Chapter 2
Money Management Skills
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights
Money Management Skills
Chapter Objectives
2-7
What to Keep in a Safe Deposit Box
• Records and items that would be hard to replace:
–Birth, marriage and death certificates –List of checking, savings and financial
Copies of tax returns and supporting data
Retention Period Indefinitely
As long as you own them Indefinitely
7 years minimum 10 years better
2-10
Objective 2
Inflows and Outflows
• Cash flow statement = personal income and expenditure statement
• Summary of cash receipts and payments for a given period
Total cash received during the time period
tax preparation software • Account summaries and investment
performance results • Computerized versions of wills,
estate plans, and other documents
* Keep a backup!
High is
desirable
Number of months
Liquid assets divided expenses canbe paid in
by monthly expenses an emergency; high is
desirable
Debt-payments Ratio
Monthly credit payments divided by take-home pay
- Items of Value
(what you own)
Amounts owed
Net Worth
(what you owe) = (your wealth)
2-12
Components of a Balance Sheet
• Step 1 – List items of value –Liquid assets –Real estate –Personal possessions –Investment assets
- Cash outlays
Cash surplus
during the = or deficit
time period
2-18
The Cash Flow Statement
Inflows and Outflows
Step 1 - Record Income
– Net income from employment (Net Pay) – Savings and investment income – Other sources