公司理财英文版课件Chap016.pptx
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《公司理财》斯蒂芬A罗斯英文》PPT课件讲义
• The rate should be appropriate to the risk presented by the security.
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)
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)
公司理财课件英文版
be worth $9,523.81 in today’s dollars.
$9,52.381$10,000 1.05
2.V • The amount that a borrower would need to set
aside today to to able to meet the promised payment
2.2 Project Evaluation in a Riskless World Why do we use NPV as the investment criterion
?Assume Perfect Capital Market and Two Period
C1 Saver (lending)
Investment Criterion
In the one-period case, the formula for NPV can be written aPN sV: P 1C FC V 1r ,dwaho t eeP r1esCFtV 1 is cash flow at If we had not undertaken the positive NPV project considered on the last slide, and instead invested our $9,500 elsewhere at 5-percent, our FV would be less than the $10,000 that investment promised and we would be unambiguously worse off in FV terms as well: $9,500×(1.05) = $9,975 < $10,000.
B C1
$9,52.381$10,000 1.05
2.V • The amount that a borrower would need to set
aside today to to able to meet the promised payment
2.2 Project Evaluation in a Riskless World Why do we use NPV as the investment criterion
?Assume Perfect Capital Market and Two Period
C1 Saver (lending)
Investment Criterion
In the one-period case, the formula for NPV can be written aPN sV: P 1C FC V 1r ,dwaho t eeP r1esCFtV 1 is cash flow at If we had not undertaken the positive NPV project considered on the last slide, and instead invested our $9,500 elsewhere at 5-percent, our FV would be less than the $10,000 that investment promised and we would be unambiguously worse off in FV terms as well: $9,500×(1.05) = $9,975 < $10,000.
B C1
公司理财原版英文课件Chap.ppt
Chapter 8
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.
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.
公司理财英文版课件Chap016
• The firm can increase leverage by issuing debt and repurchasing outstanding shares
• The firm can decrease leverage by issuing new shares and retiring outstanding debt
• Understand the effect of financial leverage on cash flows and the cost of equity
• Understand the impact of taxes and bankruptcy on capital structure choice
16-3
Capital Restructuring
• We are going to look at how changes in capital structure affect the value of the firm, all else equal
• Capital restructuring involves changing the amount of leverage a firm has without changing the firm’s assets
• We can maximize stockholder wealth by maximizing the value of the firm or minimizing the WACC
16-5
The Effect of Leverage
• How does leverage affect the EPS and ROE of a firm?
• The firm can decrease leverage by issuing new shares and retiring outstanding debt
• Understand the effect of financial leverage on cash flows and the cost of equity
• Understand the impact of taxes and bankruptcy on capital structure choice
16-3
Capital Restructuring
• We are going to look at how changes in capital structure affect the value of the firm, all else equal
• Capital restructuring involves changing the amount of leverage a firm has without changing the firm’s assets
• We can maximize stockholder wealth by maximizing the value of the firm or minimizing the WACC
16-5
The Effect of Leverage
• How does leverage affect the EPS and ROE of a firm?
公司理财英文版课件Chap016
• If we have a really bad year, we still have to pay our fixed costs and we have less left over for our stockholders
• Leverage amplifies the variation in both EPS and ROE
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?
16-3
Capital Restructuring
• We are going to look at how changes in capital structure affect the value of the firm, all else equal
• Capital restructuring involves changing the amount of leverage a firm has without changing the firm’s assets
• Understand the effect of financial leverage on cash flows and the cost of equity
• Understand the impact of taxes and bankruptcy on capital structure choice
– Change the risk of the cash flows – Change the cash flows
• Leverage amplifies the variation in both EPS and ROE
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?
16-3
Capital Restructuring
• We are going to look at how changes in capital structure affect the value of the firm, all else equal
• Capital restructuring involves changing the amount of leverage a firm has without changing the firm’s assets
• Understand the effect of financial leverage on cash flows and the cost of equity
• Understand the impact of taxes and bankruptcy on capital structure choice
– Change the risk of the cash flows – Change the cash flows
公司理财英文版课件 (6)
Calculate the net future value of all cash inflows using the investing rate.
Find the rate of return that equates these values.
Benefits: single answer and specific rates for borrowing and reinvestment
Must exceed a MINIMUM acceptance criteria
5-15
Multiple IRRs
There are two IRRs for this project:
$200 $800
Which one should
0
1
-$200
2
3
- $800
we use?
NPV
$100.00
criteria may not have a positive NPV
Advantages:
Easy to understand Biased toward liquidity
5-7
5.3 The Discounted Payback Period
How long does it take the project to “pay back” its initial investment, taking the time value of money into account?
Advantages:
Easy to understand and communicate
5-10
IRR: Example
Consider the following project:
Find the rate of return that equates these values.
Benefits: single answer and specific rates for borrowing and reinvestment
Must exceed a MINIMUM acceptance criteria
5-15
Multiple IRRs
There are two IRRs for this project:
$200 $800
Which one should
0
1
-$200
2
3
- $800
we use?
NPV
$100.00
criteria may not have a positive NPV
Advantages:
Easy to understand Biased toward liquidity
5-7
5.3 The Discounted Payback Period
How long does it take the project to “pay back” its initial investment, taking the time value of money into account?
Advantages:
Easy to understand and communicate
5-10
IRR: Example
Consider the following 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
公司理财中英文课件 (6)
• Individuals and institutions have different income streams and different intertemporal consumption preferences. • They can adjust their consumption decisions through the financial market. • A market has arisen for money.
• An investment must be at least as desirable as the opportunities available in the financial markets.
4 The Basic Principle: A Lending Example
• John has an income of $100,000 this year and expects to make the same amount next year. The interest rate is 10 percent. • This individual is thinking about investing in a piece of land that costs $70,000. She is certain that next year the land will be worth $75,000. • Should she undertake the investment?
1 The Financial Market Economy: Example
• Consider郭 who earns 200,000 RMB per year and chooses to consume 80,000 RMB per year. He has 120,000 RMB in surplus money to invest. • He could loan 30,000 RMB to each of 4 college seniors. They each promise to pay him back with interest after they graduate in one year. 货币时间价值是指货币随着时间的推移而发生的增值。
• An investment must be at least as desirable as the opportunities available in the financial markets.
4 The Basic Principle: A Lending Example
• John has an income of $100,000 this year and expects to make the same amount next year. The interest rate is 10 percent. • This individual is thinking about investing in a piece of land that costs $70,000. She is certain that next year the land will be worth $75,000. • Should she undertake the investment?
1 The Financial Market Economy: Example
• Consider郭 who earns 200,000 RMB per year and chooses to consume 80,000 RMB per year. He has 120,000 RMB in surplus money to invest. • He could loan 30,000 RMB to each of 4 college seniors. They each promise to pay him back with interest after they graduate in one year. 货币时间价值是指货币随着时间的推移而发生的增值。
《公司理财》斯蒂芬A.罗斯
• There are two dimensions:
1. A Time Frame
• Short run is probably anything less than a year. • Long run is anything over that; usually taken to be a
two-year to five-year period.
2. A Level of Aggregation
• •
McGraw-Hill/Irwin
Each division and operational unit should have a plan.
As the capital-budgeting analyses of each of the firm’s divisions are added up, the firm aggregates these small projects as a big project.
McGraw-Hill/Irwin
Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
3-6
Sales Forecast
• All financial plans require a sales forecast. • Perfect foreknowledge is impossible since
3-0
Chapter Three
Long-Term FCinoarpnocriaatel Finance
Planning and Growth Ross • Westerfield • Jaffe
公司理财原版英文课件Chap
Ri Ri βi F εi
RP X 1 ( R1 β1 F ε1 ) X 2 ( R 2 β2 F ε2 ) X N ( R N βN F εN ) RP X 1 R1 X 1 β1 F X 1ε1 X 2 R 2 X 2 β2 F X 2 ε2 X N R N X N βN F X N ε N
R 8%
R 8% 2.30 5% 1.50 (3%) 0.50 (10%) 1% R 12%
12-12
12.3 Portfolios and Factor Models
Now let us consider what happens to portfolios of stocks when each of the stocks follows a one-factor model. We will create portfolios from a list of N stocks and will capture the systematic risk with a 1-factor model. The ith stock in the list has return:
R R 2.30 5% 1.50 (3%) 0.50 FS 1%
12-10
Systematic Risk and Betas: Example
R R 2.30 5% 1.50 (3%) 0.50 FS 1%
If it were the case that the dollar-euro spot exchange rate, S($,€), 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%
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%
公司理财chap1ppt课件
Arbitrage Pricing Theory 11.7 Empirical Approaches to Asset Pricing
McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 4
Arbitrage Pricing Theory
Arbitrage arises if an investor can construct a zero investment portfolio with a sure profit.
– Since no investment is required, an investor can create large positions to secure large levels of profit.
Slide 5
11.1 Factor Models: Announcements, Surprises, and Expected Returns
• The return on any security consists of two
parts.
– First, the expected returns – Second, the unexpected or risky returns
• An unsystematic risk is a risk that specifically affects a single asset or small group of assets.
• The surprise is the news that influences the unanticipated return on the stock, U.
McGraw-Hill/Irwin
Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved
Slide 4
Arbitrage Pricing Theory
Arbitrage arises if an investor can construct a zero investment portfolio with a sure profit.
– Since no investment is required, an investor can create large positions to secure large levels of profit.
Slide 5
11.1 Factor Models: Announcements, Surprises, and Expected Returns
• The return on any security consists of two
parts.
– First, the expected returns – Second, the unexpected or risky returns
• An unsystematic risk is a risk that specifically affects a single asset or small group of assets.
• The surprise is the news that influences the unanticipated return on the stock, U.
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• Understand the basic components of the bankruptcy process
2
16-2
Chapter Outline
• The Capital Structure Question • The Effect of Financial Leverage • Capital Structure and the Cost of Equity Capital • M&M Propositions I and II with Corporate Taxes • Bankruptcy Costs • Optimal Capital Structure • The Pie Again • The Pecking-Order Theory • Observed Capital Structures • A Quick Look at the Bankruptcy Process
Chapter 16
Financial Leverage and Capital Structure Policy
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill 1
Companies, Inc. All rights reserved.
Key Concepts and Skillsount of debt financing, we increase the fixed interest expense
• If we have a really good year, then we pay our fixed cost and we have more left over for our stockholders
• Understand the effect of financial leverage on cash flows and the cost of equity
• Understand the impact of taxes and bankruptcy on capital structure choice
8
16-8
Break-Even EBIT
• Find EBIT where EPS is the same under both the current and proposed capital structures
6
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?
7
16-7
Example: Financial Leverage, EPS and ROE – Part II
• Variability in ROE
– Current: ROE ranges from 6% to 20% – Proposed: ROE ranges from 2% to 30%
4
16-4
Choosing a Capital Structure
• What is the primary goal of financial managers?
– Maximize stockholder wealth
• We want to choose the capital structure that will maximize stockholder wealth
3
16-3
Capital Restructuring
• We are going to look at how changes in capital structure affect the value of the firm, all else equal
• Capital restructuring involves changing the amount of leverage a firm has without changing the firm’s assets
• Variability in EPS
– Current: EPS ranges from $0.60 to $2.00 – Proposed: EPS ranges from $0.20 to $3.00
• The variability in both ROE and EPS increases when financial leverage is increased
• We can maximize stockholder wealth by maximizing the value of the firm or minimizing the WACC
5
16-5
The Effect of Leverage
• How does leverage affect the EPS and ROE of a firm?
• If we have a really bad year, we still have to pay our fixed costs and we have less left over for our stockholders
• Leverage amplifies the variation in both EPS and ROE
• The firm can increase leverage by issuing debt and repurchasing outstanding shares
• The firm can decrease leverage by issuing new shares and retiring outstanding debt
2
16-2
Chapter Outline
• The Capital Structure Question • The Effect of Financial Leverage • Capital Structure and the Cost of Equity Capital • M&M Propositions I and II with Corporate Taxes • Bankruptcy Costs • Optimal Capital Structure • The Pie Again • The Pecking-Order Theory • Observed Capital Structures • A Quick Look at the Bankruptcy Process
Chapter 16
Financial Leverage and Capital Structure Policy
McGraw-Hill/Irwin
Copyright © 2010 by The McGraw-Hill 1
Companies, Inc. All rights reserved.
Key Concepts and Skillsount of debt financing, we increase the fixed interest expense
• If we have a really good year, then we pay our fixed cost and we have more left over for our stockholders
• Understand the effect of financial leverage on cash flows and the cost of equity
• Understand the impact of taxes and bankruptcy on capital structure choice
8
16-8
Break-Even EBIT
• Find EBIT where EPS is the same under both the current and proposed capital structures
6
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?
7
16-7
Example: Financial Leverage, EPS and ROE – Part II
• Variability in ROE
– Current: ROE ranges from 6% to 20% – Proposed: ROE ranges from 2% to 30%
4
16-4
Choosing a Capital Structure
• What is the primary goal of financial managers?
– Maximize stockholder wealth
• We want to choose the capital structure that will maximize stockholder wealth
3
16-3
Capital Restructuring
• We are going to look at how changes in capital structure affect the value of the firm, all else equal
• Capital restructuring involves changing the amount of leverage a firm has without changing the firm’s assets
• Variability in EPS
– Current: EPS ranges from $0.60 to $2.00 – Proposed: EPS ranges from $0.20 to $3.00
• The variability in both ROE and EPS increases when financial leverage is increased
• We can maximize stockholder wealth by maximizing the value of the firm or minimizing the WACC
5
16-5
The Effect of Leverage
• How does leverage affect the EPS and ROE of a firm?
• If we have a really bad year, we still have to pay our fixed costs and we have less left over for our stockholders
• Leverage amplifies the variation in both EPS and ROE
• The firm can increase leverage by issuing debt and repurchasing outstanding shares
• The firm can decrease leverage by issuing new shares and retiring outstanding debt