Applied Corporate Finance THE FOUNDATIONS
Corporate finance专业词汇手册
Chapter 1: introduction to corporate financeCorporate finance（financial management）：公司财务、公司金融、财务管理Capital budgeting：资本预算Capital structure：资本结构Working capital management：流动资本管理Sole proprietorship：独资制、单一业主制Partnership：合伙制Corporation：公司、股份公司Profit maximization ：利润最大化Agency relation：委托代理关系Agency problem：委托代理问题Managerial compensation：管理层报酬Corporate control：公司控制Primary market ：一级市场、发行市场Secondary market：二级市场、交易市场Chapter 2: financial statements, taxes and cash flow Financial statements: 财务报表Cash flow:现金流Accounting value:会计Net income：净利润Depreciation:折旧The balance sheet：资产负债表The income statement 损益表Current asset流动资产Fixed asset固定资产Inventory存货Current liabilities流动负债Bond债券Bondholder债券持有人Shareholder’s equity/common equity/owner’s equity股东权益Balance sheet identity资产负债表等式Net working capital 营运资本Capital spending:资本支出Liquidity：流动性Generally accepted accounting principles：公认会计准则Historical cost：历史成本The income statement：损益表Operating cash flow：经营现金流Earnings per share（EPS）每股收益Earnings before interest and taxes(EBIT):息税前利润Revenue ：收入Chapter 3: working with financial statementsShort-term solvency/liquidity ratios ：短期偿债能力、流动比率Long-term solvency/financial leverage ratios：长期偿债能力、财务杠杆比率Asset management or turnover ratios：资产周转比率Profitability ratios：盈利比率Market value ratios：市场价值比率Quick (acid-test ratio)：速动比率/酸性比率Debt-equity ratio：债务权益比Equity multiplier：权益乘数Long-term debt ratio：长期债务比率Inventory turnover：存货周转率Days’ sales in inventory：存货周转天数Receivables turnover ：应收账款周转率Days’ sales in receivables：应收账款周转天数Return on assets：资产报酬率Return on equity：权益报酬率Price-earning ratio ：市盈率Market-to-book ratio ：市净率Chapter 5 and chapter 6: discounted cash flow valuationtime value of money: 货币时间价值future value：终值compounding/interest on interest：复利/利滚利present value：现值discount rate：贴现率discounted cash flow (DCF) valuation：贴现现金流股价Annuities：年金Perpetuities：永续年金Preferred stock：优先股Common stock:普通股Interest-only loan：纯利息贷款Amortized loan：分期偿还贷款Chapter 7 and chapter 8: interest rates ,bond valuation and stock valuation Bond:债券Bond’s coupons：债券票面利息Face value/ par value：面值Par value bond：平价债券Bond’s time to maturity：债券到期Yield to maturity (YTM)：到期收益率Discount bond：折价债券Premium bond: 溢价债券Interest rate risk：利率风险Semiannual coupons：一年付息两次债券Zero coupon bond：零息债券Floating-rate bond：浮动利率债券Common stock:普通股The dividend growth model：股利增长模型Cumulative voting：累计投票Straight voting：直接选举Chapter 9: net present value and other investment criteria Net present value: 净现值Payback rule：回收期Discounted payback：折现回收期average accounting return：平均会计报酬率Internal rate of return：内部报酬率Mutually exclusive investments：互斥投资项目Profitability index：获利能力指数Chapter 10 and chapter 11:Making capital investment decisions and project analysis Incremental cash flows:增量现金流Sunk costs：沉没成本Opportunity costs：机会成本Side effects：副作用Financing costs：融资成本Scenario analysis：情境分析Sensitivity analysis：敏感性分析Simulation analysis：模拟分析Break-even analysis：盈亏分析Fixed costs：固定成本Variable costs：变动成本Average cost versus marginal cost：平均成本/边际成本Operating leverage：经营杠杆Financial leverage：财务杠杆Chapter 12 and chapter 13: risk and return Risk premium：风险溢价Variability of returns：报酬率的变动Standard deviation：标准差Variance：方差Normal distribution：正态分布Arithmetic averages：算术均值Geometric averages：几何均值Capital market efficiency：资本市场有效性The efficient markets hypothesis (EMH)：有效市场假说Weak form efficient：弱有效Semi strong form efficient：半强有效Strong form efficient：强有效Chapter 12: return, risk and the security market lineExpected portfolio returns：期望组合收益率Portfolio risk：组合风险Security market line：证券市场线Diversification：多元化Portfolio risk：组合风险Systematic risk：系统风险Unsystematic risk：非系统风险Capital asset pricing model (CAPM)Chapter 14: cost of capital Weighted average cost of capital (WACC)Cost of capital：资本成本Cost of equity：股权成本Risk-free rate：无风险收益率Market risk premium：市场风险溢价Flotation costs：发行成本Chapter 15: raising capitalVenture capital:风险资本Private equity：私募股权Public company/listed company：上市公司Go public：上市General cash offer：现金发行Rights offer：认股权发行/配股Initial public offering：首次公开发行Underwriter：承销商Chapter 16 and chapter 17: capital structure policy and dividend policy Bankruptcy costs ：破产成本Static theory of capital structure：资本结构静态权衡理论Pecking-order theory：啄食理论Cash dividend：现金股利Stock dividend ：股票股利Announcement date：宣告日Ex-dividend date：除息日Record date ：登记日Stock repurchase：股票回购Stock split：股票分拆。
(完整word版)CorporateFinance重点知识整理
(完整word版)CorporateFinance重点知识整理第一章导论1. 公司目标：为所有者创造价值公司价值在于其产生现金流能力。
2。
财务管理的目标：最大化现有股票的每股现值。
3。
公司理财可以看做对一下几个问题进行研究：1。
资本预算:公司应该投资什么样的长期资产。
2. 资本结构：公司如何筹集所需要的资金。
3. 净运营资本管理:如何管理短期经营活动产生的现金流。
4. 公司制度的优点:有限责任,易于转让所有权，永续经营。
缺点：公司税对股东的双重课税。
第二章会计报表与现金流量资产= 负债+ 所有者权益（非现金项目有折旧、递延税款）EBIT（经营性净利润）= 净销售额—产品成本—折旧EBITDA = EBIT + 折旧及摊销现金流量总额CF(A) = 经营性现金流量—资本性支出—净运营资本增加额= CF(B）+ CF（S)经营性现金流量OCF = 息税前利润+ 折旧- 税资本性输出= 固定资产增加额+ 折旧净运营资本= 流动资产- 流动负债第三章财务报表分析与财务模型1. 短期偿债能力指标（流动性指标）流动比率= 流动资产/流动负债（一般情况大于一）速动比率= （流动资产—存货)/流动负债(酸性实验比率）现金比率= 现金/流动负债流动性比率是短期债权人关心的，越高越好；但对公司而言,高流动性比率意味着流动性好，或者现金等短期资产运用效率低下。
对于一家拥有强大借款能力的公司，看似较低的流动性比率可能并非坏的信号2。
长期偿债能力指标（财务杠杆指标)负债比率= (总资产—总权益)/总资产or （长期负债+ 流动负债)/总资产权益乘数= 总资产/总权益= 1 + 负债权益比利息倍数= EBIT/利息现金对利息的保障倍数（Cash coverage radio）= EBITDA/利息3。
资产管理或资金周转指标存货周转率= 产品销售成本/存货存货周转天数= 365天/存货周转率应收账款周转率= （赊）销售额/应收账款总资产周转率= 销售额/总资产= 1/资本密集度4. 盈利性指标销售利润率= 净利润/销售额资产收益率ROA = 净利润/总资产权益收益率ROE = 净利润/总权益(完整word版)CorporateFinance重点知识整理5. 市场价值度量指标市盈率= 每股价格/每股收益EPS 其中EPS = 净利润/发行股票数市值面值比= 每股市场价值/每股账面价值企业价值EV = 公司市值+ 有息负债市值- 现金EV乘数= EV/EBITDA6. 杜邦恒等式ROE = 销售利润率（经营效率）x总资产周转率(资产运用效率）x权益乘数(财杠）ROA = 销售利润率x总资产周转率7. 销售百分比法假设项目随销售额变动而成比例变动，目的在于提出一个生成预测财务报表的快速实用方法。
《corporate finance》罗斯版英文版 Chapter 06书本课后习题及答案
Chapter 061.The changes in a firm's future cash flows that are a direct consequence of accepting a project arecalled _____ cash flows.A. i ncrementalB. s tand-aloneC. o pportunityD. n et present valueE. e rosion2.The annual annuity stream of payments with the same present value as a project's costs is calledthe project's _____ cost.A. i ncrementalB. s unkC. o pportunityD. e rosionE. e quivalent annual3. A cost that has already been paid, or the liability to pay has already been incurred, is a(n):A. s alvage value expense.B. n et working capital expense.C. s unk cost.D. o pportunity cost.E. e rosion cost.4.The most valuable investment given up if an alternative investment is chosen is a(n):A. s alvage value expense.B. n et working capital expense.C. s unk cost.D. o pportunity cost.E. e rosion cost.5. A decrease in a firm’s current cash flows resulting from the implementation of a new project isreferred to as:A. s alvage value expenses.B. n et working capital expenses.C. s unk costs.D. o pportunity costs.E. e rosion costs.6.The depreciation method currently allowed under U.S. tax law governing the accelerated write-offof property under various lifetime classifications is called _____ depreciation.A. F IFOB. M ACRSC. s traight-lineD. s um-of-years digitsE. c urvilinear7.The cash flow tax savings generated as a result of a firm's tax-deductible depreciation expense iscalled the:A. a ftertax depreciation savings.B. d epreciable basis.C. d epreciation tax shield.D. o perating cash flow.E. a ftertax salvage value.8.The cash flow from a project is computed as the:A. n et operating cash flow generated by the project, less any sunk costs and erosion costs.B. s um of the incremental operating cash flow and aftertax salvage value of the project.C. n et income generated by the project, plus the annual depreciation expense.D. s um of the incremental operating cash flow, capital spending, and net working capital cashflows incurred by the project.E. s um of the sunk costs, opportunity costs, and erosion costs of the project.9.Interest rates or rates of return on investments that have been adjusted for the effects of inflationare called _____ rates.A. r ealB. n ominalC. e ffectiveD. s trippedE. c oupon10.The increase you realize in buying power as a result of owning an investment is referred to as the_____ rate of return.A. i nflatedB. r ealizedC. n ominalD. r ealE. r isk-free11.The pro forma income statement for a cost reduction project:A. w ill reflect a reduction in the sales of the firm.B. w ill generally reflect no incremental sales.C. h as to be prepared reflecting the total sales and expenses of the entire firm.D. c annot be prepared due to the lack of any project related sales.E. w ill always reflect a negative project operating cash flow.12.One purpose of identifying all of the incremental cash flows related to a proposed project is to:A. i solate the total sunk costs so they can be evaluated to determine if the project will add valueto the firm.B. e liminate any cost which has previously been incurred so that it can be omitted from theanalysis of the project.C. m ake each project appear as profitable as possible for the firm.D. i nclude both the proposed and the current operations of a firm in the analysis of the project.E. i dentify any and all changes in the cash flows of the firm for the past year so they can beincluded in the analysis.13.Sunk costs include any cost that:A. w ill change if a project is undertaken.B. w ill be incurred if a project is accepted.C. h as previously been incurred and cannot be changed.D. w ill be paid to a third party and cannot be refunded for any reason whatsoever.E. w ill occur if a project is accepted and once incurred, cannot be recouped.14.You spent $500 last week fixing the transmission in your car. Now, the brakes are acting up andyou are trying to decide whether to fix them or trade the car in for a newer model. In analyzing the brake situation, the $500 you spent fixing the transmission is a(n) _____ cost.A. o pportunityB. f ixedC. i ncrementalD. s unkE. r elevant15.Erosion can be explained as the:A. a dditional income generated from the sales of a newly added product.B. l oss of current sales due to a new project being implemented.C. l oss of revenue due to employee theft.D. l oss of revenue due to customer theft.E. l oss of cash due to the expenses required to fix a parking lot after a heavy rain storm.16.Which one of these is an example of erosion that should be included in project analysis?A. T he anticipated loss of current sales when a new product is launched.B. T he expected decline in sales as a new product ages.C. T he reduction in your sales that occurs when a competitor introduces a new product.D. T he sudden loss of sales due to a major employer in your community implementing massivelayoffs.E. T he reduction in sales price that will most likely be required to sell inventory that has aged.17.Which one of the following should be excluded from the analysis of a project?A. e rosion costsB. i ncremental fixed costsC. i ncremental variable costsD. s unk costsE. o pportunity costs18.All of the following are anticipated effects of a proposed project. Which of these should be considered when computing the cash flow for the final year of a project?A. o perating cash flow and salvage valuesB. s alvage values and net working capital recoveryC.operating cash flow, net working capital recovery, salvage valuesD. n et working capital recovery and operating cash flowE.operating cash flow only19.Changes in the net working capital:A. c an affect the cash flows of a project every year of the project's life.B. o nly affect the initial cash flows of a project.C. a re included in project analysis only if they represent cash outflows.D. a re generally excluded from project analysis due to their irrelevance to the total project.E. a ffect the initial and the final cash flows of a project but not the cash flows of the middle years.20.The net working capital of a firm will decrease if there is:A. a decrease in accounts payable.B. a n increase in inventory.C. a decrease in accounts receivable.D. a n increase in the firm's checking account balance.E. a decrease in fixed assets. working capital:A. c an be ignored in project analysis because any expenditure is normally recouped by the end ofthe project.B. r equirements generally, but not always, create a cash inflow at the beginning of a project.C. e xpenditures commonly occur at the end of a project.D. i s frequently affected by the additional sales generated by a new project.E. i s the only expenditure where at least a partial recovery can be made at the end of a project.22.A company which uses the MACRS system of depreciation:A. w ill have equal depreciation costs each year of an asset's life.B. w ill expense the largest percentage of the cost during an asset’s first year of life.C. c an depreciate the cost of land, if it so desires.D. w ill write off the entire cost of an asset over the asset's class life.E. c annot expense any of the cost of a new asset during the first year of the asset's life.23.Champion Toys just purchased some MACRS 5-year property at a cost of $230,000. TheMACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. The book value of the asset as of the end of Year 2 can be calculated as:A. $230,000 × (1 −.20 −.32).B. $230,000 × ([1 - (.20 × .32)].B. $230,000 × (1 - .20) × (1 - .32).C. $230,000 / (1 - .20 - .32).D. $230,000 - ($230,000 × .20 × .32).24.Pete’s Garage just purchased some equipment at a cost of $650,000. What is the propermethodology for computing the depreciation expense for Year 3 if the equipment is classified as 5-year property for MACRS? The MACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively.A. $650,000 ×(1 − .20) ×(1 −.32) ×(1 −.192)B. $650,000 ×(1 − .20) ×(1 −.32)C. $650,000 ×(1 − .20) ×(1 − .32) × .192)D. $650,000 ×(1 −.192)E. $650,000 ×.19225.The book value of an asset is primarily used to compute the:A. a nnual depreciation tax shield.B. a mount of cash received from the sale of an asset.C. a mount of tax saved annually due to the depreciation expense.D. a mount of tax due on the sale of an asset.E. c hange in depreciation needed to reflect the market value of the asset.26.The salvage value of an asset creates an aftertax cash flow in an amount equal to the:A. s ales price of the asset.B. s ales price minus the book value.C. s ales price minus the tax due based on the sales price minus the book value.D. s ales price plus the tax due based on the sales price minus the book value.E. s ales price plus the tax due based on the book value minus the sales price.27.The pretax salvage value of an asset is equal to the:A. b ook value if straight-line depreciation is used.B. b ook value if MACRS depreciation is used.C. m arket value minus the book value.D. b ook value minus the market value.E. m arket value.28.A project's operating cash flow will increase when the:A. d epreciation expense increases.B. s ales projections are lowered.C. i nterest expense is lowered.D. n et working capital requirement increases.E. e arnings before interest and taxes decreases.29.The cash flows of a project should:A. b e computed on a pretax basis.B. i nclude all sunk costs and opportunity costs.C. i nclude all incremental and opportunity costs.D. b e applied to the year when the related expense or income is recognized by GAAP.E. i nclude all financing costs related to new debt acquired to finance the project.30.Assume a firm has no interest expense or extraordinary items. Given this, the operating cash flow can be computed as:A. E BIT - Taxes.B. E BIT × (1 - Tax rate) + Depreciation × Tax rate.C. (Sales - Costs) × (1 - Tax rate).D. E BIT - Depreciation + Taxes.E.Net income + Depreciation.31.The bottom-up approach to computing the operating cash flow applies only when:A. b oth the depreciation expense and the interest expense are equal to zero.B. t he interest expense is equal to zero.C. t he project is a cost-cutting project.D. n o fixed assets are required for the project.E. t axes are ignored and the interest expense is equal to zero.32.The top-down approach to computing the operating cash flow:A. i gnores all noncash items.B. a pplies only if a project produces sales.C. c an only be used if the entire cash flows of a firm are included.D. i s equal to Sales −Costs −Taxes + Depreciation.E. i ncludes the interest expense related to a project.33.For a profitable firm, an increase in which one of the following will increase the operating cashflow?A. e mployee salariesB. o ffice rentC. b uilding maintenanceD. d epreciationE. e quipment rental34.Tax shield refers to a reduction in taxes created by:A. a reduction in sales.B. a n increase in interest expense.C. n oncash expenses.D. a project's incremental expenses.E. o pportunity costs.35.A project which is designed to improve the manufacturing efficiency of a firm but will generate noadditional sales revenue is referred to as a(n) _____ project.A. s unk costB. o pportunityC. c ost-cuttingD. r evenue-cuttingE. r evenue-generating36.Toni's Tools is comparing machines to determine which one to purchase. The machines sell fordiffering prices, have differing operating costs, differing machine lives, and will be replaced when worn out. These machines should be compared using:A. n et present value only.B. b oth net present value and the internal rate of return.C. t heir equivalent annual costs.D. t he depreciation tax shield approach.E. t he replacement parts approach.37.The equivalent annual cost method is useful in determining:A. t he annual operating cost of a machine if the annual maintenance is performed versus whenthe maintenance is not performed as recommended.B. t he tax shield benefits of depreciation given the purchase of new assets for a project.C. o perating cash flows for cost-cutting projects of equal duration.D. w hich one of two machines to acquire given equal machine lives but unequal machine costs.E. w hich one of two machines to purchase when the machines are mutually exclusive, havedifferent machine lives, and will be replaced once they are worn out.38.Marshall's purchased a corner lot five years ago at a cost of $498,000 and then spent $63,500 ongrading and drainage so the lot could be used for storing outdoor inventory. The lot was recently appraised at $610,000. The company now wants to build a new retail store on the site. Thebuilding cost is estimated at $1.1 million. What amount should be used as the initial cash flow for this building project?A. $1,661,500B. $1,100,000C. $1,208,635D. $1,710,000E. $1,498,00039.Samson's purchased a lot four years ago at a cost of $398,000. At that time, the firm spent$289,000 to build a small retail outlet on the site. The most recent appraisal on the propertyplaced a value of $629,000 on the property and building. Samson’s now wants to tear down the original structure and build a new strip mall on the site at an estimated cost of $2.3 million. What amount should be used as the initial cash flow for new project?A. $2,987,000B. $2,242,000C. $2,058,000D. $2,300,000E. $2,929,00040.Jamestown Ltd. currently produces boat sails and is considering expanding its operations toinclude awnings. The expansion would require the use of land the firm purchased three years ago at a cost of $142,000 that is currently valued at $137,500. The expansion could use someequipment that is currently sitting idle if $6,700 of modifications were made to it. The equipment originally cost $139,500 six years ago, has a current book value of $24,700, and a current market value of $39,000. Other capital purchases costing $780,000 will also be required. What is the amount of the initial cash flow for this expansion project?A. $953,400B. $962,300C. $948,900D. $927,800E. $963,20041.The Boat Works currently produces boat sails and is considering expanding its operations toinclude awnings. The expansion would require the use of land the firm purchased three years ago at a cost of $197,000 that is currently valued at $209,500. The expansion could use someequipment that is currently sitting idle if $7,500 of modifications were made to it. The equipment originally cost $387,500 five years ago, has a current book value of $132,700, and a current market value of $139,000. Other capital purchases costing $520,000 will also be required. What is the value of the opportunity costs that should be included in the initial cash flow for theexpansion project?A. $425,000B. $485,000C. $329,700D. $348,500E. $537,20042.Walks Softly sells customized shoes. Currently, it sells 14,800 pairs of shoes annually at anaverage price of $59 a pair. It is considering adding a lower-priced line of shoes that will be priced at $39 a pair. Walks Softly estimates it can sell 6,000 pairs of the lower-priced shoes but will sell 3,500 less pairs of the higher-priced shoes by doing so. What annual sales revenue should be used when evaluating the addition of the lower-priced shoes?A. $27,500B. $24,000C. $31,300D. $789,100E. $900,70043.Foamsoft sells customized boat shoes. Currently, it sells 16,850 pairs of shoes annually at anaverage price of $79 a pair. It is considering adding a lower-priced line of shoes which sell for $49a pair. Foamsoft estimates it can sell 5,000 pairs of the lower-priced shoes but will sell 1,250 lesspairs of the higher-priced shoes by doing so. What is the estimated value of the erosion cost that should be charged to the lower-priced shoe project?A. $138,750B. $146,250C. $98,750D. $52,000E. $123,24044.Sue purchased a house for $89,000, spent $56,000 upgrading it, and currently had it appraised at$212,900. The house is being rented to a family for $1,200 a month, the maintenance expenses average $200 a month, and the property taxes are $4,800 a year. If she sells the house she will incur $20,000 in expenses. She is considering converting the house into professional officespace. What opportunity cost, if any, should she assign to this property if she has been renting it for the past two years? A. $178,500A. $120,000B. $185,000C. A NSD. $192,900D. $232,90045.Jamie's Motor Home Sales currently sells 1,100 Class A motor homes, 2,200 Class C motorhomes, and 2,800 pop-up trailers each year. Jamie is considering adding a mid-range camper and expects that if she does so she can sell 1,500 of them. However, if the new camper is added, Jamie expects that her Class A sales will decline to 850 units while the Class C camper sales decline to 2,000. The sales of pop-ups will not be affected. Class A motor homes sell for anaverage of $140,000 each. Class C homes are priced at $59,500 and the pop-ups sell for $5,000 each. The new mid-range camper will sell for $42,900. What is the erosion cost of adding the mid-range camper?A. $54,250,000B. $46,900,000C. $53,750,000D. $63,150,000E. $78,750,00046.Ernie's Electrical is evaluating a project which will increase sales by $50,000 and costs by$30,000. The project will cost $150,000 and will be depreciated straight-line to a zero book value over the 10-year life of the project. The applicable tax rate is 34 percent. What is the operating cash flow for this project?A. $19,200B. $15,000C. $21,300D. $17,900E. $18,30047.Kurt's Cabinets is looking at a project that will require $80,000 in fixed assets and another$20,000 in net working capital. The project is expected to produce sales of $110,000 withassociated costs of $70,000. The project has a 4-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 35 percent. What is the operating cash flow for this project?A. $7,000B. $13,000C. $27,000D. $33,000E. $40,00048.Peter's Boats has sales of $760,000 and a profit margin of 5 percent. The annual depreciationexpense is $80,000. What is the amount of the operating cash flow if the company has no long-term debt?A. $34,000B. $86,400C. $118,000D. $120,400E. $123,90049.Samoa's Tools has sales of $760,000 and a profit margin of 8 percent. The annual depreciationexpense is $50,000. What is the amount of the operating cash flow if the company has no long-term debt?A. $50,000B. $60,800C. $110,800D. $810,000E. $930,00050.Le Place has sales of $439,000, depreciation of $32,000, and net working capital of $56,000. Thefirm has a tax rate of 34 percent and a profit margin of 6 percent. The firm has no interestexpense. What is the amount of the operating cash flow?A. $49,384B. $52,616C. $54,980D. $58,340E. $114,34051.The By-Way has sales of $435,000, costs of $254,000, depreciation of $35,000, interest expenseof $22,000, and taxes of $43,400. What is the amount of the operating cash flow?A. $115,600B. $157,900C. $137,600D. $322,100E. $114,34052.Ben's Border Café is considering a project that will produce sales of $16,000 and increase cashexpenses by $10,000. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. What is the amount of the operating cash flow using the top-down approach?A. $4,000B. $4,500C. $6,000D. $7,500E. $8,50053.Camille's Café is considering a project that will not produce any sales but will decrease cashexpenses by $12,000. If the project is implemented, taxes will increase from $23,000 to $24,500 and depreciation will increase from $4,000 to $5,500. What is the amount of the operating cash flow using the top-down approach?A. $15,000B. $10,500C. $5,500D. $17,500E. $13,50054.Ronnie's Coffee House is considering a project which will produce sales of $6,000 and increasecash expenses by $2,500. If the project is implemented, taxes will increase by $1,300. The additional depreciation expense will be $1,000. An initial cash outlay of $2,000 is required for net working capital. What is the amount of the operating cash flow using the top-down approach?A. $200B. $1,500C. $2,200D. $3,500E. $4,20055.A project will increase sales by $60,000 and cash expenses by $51,000. The project will cost$40,000 and will be depreciated using straight-line depreciation to a zero book value over the 4-year life of the project. The company has a marginal tax rate of 35 percent. What is the operating cash flow of the project using the tax shield approach?A. $5,850B. $8,650C. $9,350D. $9,700E. $10,35056.A project will increase sales by $140,000 and cash expenses by $95,000. The project will cost$100,000 and will be depreciated using the straight-line method to a zero book value over the 4-year life of the project. The company has a marginal tax rate of 34 percent. What is the value of the depreciation tax shield?A. $8,500B. $17,000C. $22,500D. $25,000E. $37,75057.Lee's Furniture just purchased $24,000 of fixed assets that are classified as 5-year MACRSproperty. The MACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. What is the amount of the depreciation expense for the third year?A. $2,304B. $2,507C. $2,765D. $4,608E. $4,80058.Lew just purchased $67,600 of equipment that is classified as 5-year MACRS property. TheMACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. What will the book value of this equipment be at the end of four years should he decide to resell the equipment at that point in time?A. $11,681.28B. $18,280.20C. $17,040.00D. $19,468.80E. $22,672.0059.Northern Enterprises just purchased $1,900 of fixed assets that are classified as 3-year MACRSproperty. The MACRS rates are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent for Years 1 to 4, respectively. What is the amount of the depreciation expense for Year 2?A. $562.93B. $633.27C. $719.67D. $844.36E. $1,477.6360.The Galley purchased some 3-year MACRS property two years ago at a cost of $19,800. TheMACRS rates are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent. The firm no longer uses this property so is selling it today at a price of $13,500. What is the amount of the pretax profit on the sale?A. $11,140.48B. $9,098.46C. $10,500.00D. $8,016.67E. $10,702.4061.Three years ago, you purchased some 5-year MACRS equipment at a cost of $135,000. TheMACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. You sold the equipment today for $82,500. Which of these statements is correct if your tax rate is 34 percent?A. T he tax due on the sale is $14,830.80.B. T he book value today is $40,478.C. T he book value today is $37,320.D. T he taxable amount on the sale is $47,380.E. T he tax refund from the sale is $13,219.20.62.Custom Cars purchased some $39,000 of fixed assets two years ago that are classified as 5-yearMACRS property. The MACRS rates are 20 percent, 32 percent, 19.2 percent, 11.52 percent,11.52 percent, and 5.76 percent for Years 1 to 6, respectively. The tax rate is 34 percent. If theassets are sold today for $19,000, what will be the aftertax cash flow from the sale?A. $16,358.88B. $17,909.09C. $18,720.00D. $18,904.80E. $19,000.0063.Winslow Motors purchased $225,000 of MACRS 5-year property. The MACRS rates are 20percent, 32 percent, 19.2 percent, 11.52 percent, 11.52 percent, and 5.76 percent for Years 1 to 6, respectively. The tax rate is 34 percent. If the firm sells the asset after five years for $10,000, what will be the aftertax cash flow from the sale?A. $8,993.60B. $8,880.20C. $11,006.40D. $7,770.40E. $12,892.0064.A project is expected to create operating cash flows of $26,500 a year for four years. The initialcost of the fixed assets is $62,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 12 percent?A. $19,208.11B. $14,028.18C. $15,306.09D. $17,396.31E. $21,954.1765.A project will produce operating cash flows of $45,000 a year for four years. During the life of theproject, inventory will be lowered by $30,000 and accounts receivable will increase by $15,000.Accounts payable will decrease by $10,000. The project requires the purchase of equipment at an initial cost of $120,000. The equipment will be depreciated straight-line to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating a $25,000 aftertax cash inflow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 15 percent?A. $23,483.48B. $16,117.05C. $24,909.09D. $22,037.86E. $19,876.0266.A project will produce an operating cash flow of $7,300 a year for three years. The initialinvestment for fixed assets will be $11,600, which will be depreciated straight-line to zero over the asset’s 4-year life. The project will require an initial $500 in net working capital plus an additional $500 every year with all net working capital levels restored to their original levels when the project ends. The fixed assets can be sold for an estimated $2,500 at the end of the project, the tax rate is 34 percent, and the required rate of return is 12 percent. What is the net present value of the project?A. $7,532.27B. $9,896.87C. $7,072.72D. $6,353.41E. $8,398.2967.Matty's Place is considering the installation of a new computer system that will cut annualoperating costs by $12,000. The system will cost $42,000 to purchase and install. This system is expected to have a 5-year life and will be depreciated to zero using straight-line depreciation.What is the amount of the earnings before interest and taxes for each year of this project?A. −$20,400B. $5,400C. $3,600D. $12,000E. $8,400。
《Corporate Finance (公司金融学)》课件 (11)
• In efficient markets, profitable arbitrage opportunities will quickly disappear.
FS = Surprise in the exchange rate = actual – expected = 0% - 10% = -10%
R R 2.305% 1.50 (3%) 0.50 (10%) 1%
Systematic Risk and Betas: Example
R R 2.305% 1.50(3%) 0.50 FS 1%
Chapter Eleven
11 An AlternativeCVoirepworaotefFRiniasnkce
and Return: The APT Ross • Westerfield • Jaffe Sixth Edition
Sixth Edition
Chapter Outline
11.1 Factor Models: Announcements, Surprises, and Expected Returns
Systematic Risk and Betas: Example
R R 2.30 FI 1.50 FGDP 0.50 FS 1%
We must decide what surprises took place in the systematic factors.
If it was the case that the inflation rate was expected to be by 3%, but in fact was 8% during the time period, then
澳洲国立大学金融数学硕士专业课程
澳洲国立大学金融数学硕士专业课程1.金融硕士Master of Finance（2年制，共修96学分）属于授课型项目，是澳洲最受欢迎的金融硕士项目之一。
本科金融或其相近专业领域毕业的学生，最多可抵24个学分（一个学期）。
研究生相关专业可抵48学分，也就是说第一年的基础课程可以跳过，直接进行二年级的学习。
该专业为没有金融背景的学生提供机会，帮助学生获得金融专业知识的提升，打下扎实的金融理论基础。
此课程受CFA认证。
（1）研一课程：48学分必修课：42学分BUSN7008 Financial Statements and Reporting 财物报表与报告FINM7006 Foundations of Finance 金融学基础FINM7007 Applied Corporate Finance 应用企业金融FINM7008 Applied Investments 应用投资FINM7041 Applied Derivatives 应用金融衍生品FINM7044 Applied Valuation 应用评估STAT7055 Introductory Statistics for Business and Finance 商业与金融概述选修课：6学分（二选一）ECON8069 Business Economics 企业经济学STAT6046 Financial Mathematics 财务数学（2）研二课程：48分FINM8004 Advanced Corporate Finance 高级企业金融FINM8006 Advanced Investments 高级投资FINM8007 Topics in International Finance 国际金融学FINM8009 Derivatives: Markets, Valuation and Risk Management 金融衍生品：市场、评估和风险管理FINM8014 Applied Financial Intermediation and Debt Markets 金融中介和债务市场应用FINM8016 Portfolio Construction 资产组合架构FINM8017 Trading and Markets 贸易与市场FINM8100 Applied Project in Finance 金融应用项目如果学生第1年考试的GPA没有到达60%，就没有办法读研二的课程，以及只能拿到财务与精算（Finance and Actuarial Statistics）的diploma（毕业证书），不能获得相关的硕士学位。
公司金融课后习题罗斯
第一章Corporate finance（公司财务）是金融学的分支学科，用于考察公司如何有效地利用各种融资渠道，获得最低成本的资金来源，并形成合适的资本结构（capital structure）；还包括企业投资、利润分配、运营资金管理及财务分析等方面。
它会涉及到现代公司制度中的一些诸如委托-代理结构的金融安排等深层次的问题。
为什么说公司理财研究的就是如下三个问题：(1) 公司应该投资于什么样的长期资产？涉及资产负债表的左边。
我们使用“资本预算(capital budgeting)”和“资本性支出”这些专业术语描述这些长期固定资产的投资和管理过程。
(2) 公司如何筹集资本性支出所需的资金呢？涉及资产负债表的右边。
回答这一问题又涉及到资本结构(Capital structure)，它表示公司短期及长期负债与股东权益的比例。
(3) 公司应该如何管理它在经营中的现金流量？涉及资产负债表的上方。
首先，经营中的现金流入量和现金流出量在时间上不对等。
此外，经营中现金流量的数额和时间都具有不确定性，难于确切掌握。
财务经理必须致力于管理现金流量的缺口。
从资产负债表的角度看，现金流量的短期管理与净营运资本(net working capital)有关。
净营运资本定义为短期资本与短期负债之差。
从财务管理的角度看，短期现金流量问题是由于现金流量和现金流量之间不对等所引起的，属于短期理财问题。
资本结构公司可以事先发行比股权多的债权，筹集所需的资金；可以考虑改变二者的比例，买回它的一些债权。
融资决策在原先投资决策前就可以独立设定。
这些发行债权和股权的决策影响到公司的资本结构。
资金主管负责处理现金流量、投资预算和制定财务计划。
财务主管负责会计工作职能，包括税收、成本核算、财务会计和信息系统。
现金流量的时点公司投资的价值取决于现金流量的时点。
一个最重要的假设是任何人都偏好早一点收到现金流量。
今天收到的一美元比明天收到的一美元更有价值。
《corporate finance》罗斯版 英文版 Chapter 04书本课后习题及答案
Chapter 041.An annuity stream of cash flow payments is a set of:A. e qual cash flows occurring each time period over a fixed length of time.B. e qual cash flows occurring each time period forever.C. e ither equal or varying cash flows occurring at set intervals of time for a fixed period.D. i ncreasing cash flows occurring at set intervals of time that go on forever.E. a rbitrary cash flows occurring each time period for no more than 10 years.2.Annuities where the payments occur at the end of each time period are called _____, whereas_____ refer to annuity streams with payments occurring at the beginning of each time period.A. o rdinary annuities; early annuitiesB. l ate annuities; straight annuitiesC. s traight annuities; late annuitiesD. a nnuities due; ordinary annuitiesE. o rdinary annuities; annuities due3. A flow of unending and equal payments that occur at regular intervals of time is called a(n):A. a nnuity due.B. i ndemnity.C. p erpetuity.D. a mortized cash flow stream.E. a mortization table.4.An interest rate that is compounded monthly, but is expressed as if the rate were compoundedannually, is called the _____ rate.A. s tated interestB. c ompound interestC. e ffective annualD. p eriodic interestE. d aily interest5.The interest rate charged per period multiplied by the number of periods per year is called the_____ rate.A. e ffective annualB. a nnual percentageC. p eriodic interestD. c ompound interestE. d aily interest6.Binder and Sons borrowed $138,000 for three years from their local bank and now they arepaying monthly payments that include both principal and interest. Paying off debt by making installments payments, such as Binder and Sons is doing, is referred to as:A. f oreclosing on the debt.B. a mortizing the debt.C. f unding the debt.D. c alling the debt.E. r efunding the debt.7.Ted purchased an annuity today that will pay $1,000 a month for five years. He received his firstmonthly payment today. Allison purchased an annuity today that will pay $1,000 a month for five years. She will receive her first payment one month from today. Which one of the followingstatements is correct concerning these two annuities?A. B oth annuities are of equal value today.B. A llison’s annuity is an annuity due.C. T ed’s annuity has a higher present value than Allison’s.D. A llison’s annuity has a higher present value than Ted’s.E. T ed’s annuity is an ordinary annuity.8.You are comparing two investment options, each of which will provide $15,000 of total income.Option A pays five annual payments starting with $5,000 the first year followed by four annual payments of $2,500 each. Option B pays five annual payments of $3,000 each. Which one of the following statements is correct given these two investment options?A. B oth options are of equal value today.B. G iven a positive rate of return, Option A is worth more today than Option B.C. O ption B has a higher present value than Option A given a positive rate of return.D. O ption B has a lower present value than Option A given a zero rate of return.E. O ption A is preferable because it is an annuity due.9.You are considering two projects with the following cash flows:Assuming both projects have the same initial cost, you know that:A. t here are no conditions under which the projects can have equal values.B. P roject B has a higher net present value than Project A.C.Project A is more valuable than Project B given a positive discount rate.D.both projects offer the same rate of return.E.both projects have equal net present values at any discount rate.10.A perpetuity differs from an annuity because:A. p erpetuity payments vary with the rate of inflation.B. p erpetuity payments vary with the market rate of interest.C. p erpetuity payments are variable while annuity payments are constant.D. p erpetuity payments never cease.E. a nnuity payments occur at irregular intervals of time.11.The annual percentage rate:A. c onsiders interest on interest.B. i s the actual cost of a loan with monthly payments.C. i s higher than the effective annual rate when interest is compounded quarterly.D. i s the interest rate charged per period divided by (1 + n), when n is the number of periods peryear.E. e quals the effective annual rate when the interest on an account is designated as simpleinterest.12.You would be making a wise decision if you chose to:A. b ase decisions regarding investments on effective rates and base decisions regarding loanson annual percentage rates.B. a ssume all loans and investments are based on simple interest.C. a ccept the loan with the lower effective annual rate rather than the loan with the lower annualpercentage rate.D. i nvest in an account paying 6 percent, compounded quarterly, rather than an account paying 6percent, compounded monthly.E. i gnore the effective rates and concentrate on the annual percentage rates for all transactions.13.The highest effective annual rate that can be derived from an annual percentage rate of 9% iscomputed as:A. [1 + (.09 / 365)] × 365.B. e.09×q.C. e × (1 + .09).D. e.09−1.E. [1 + (.09 / 365)]365−1.14.Given a stated interest rate, which form of compounding will yield the highest effective rate ofinterest?A. a nnual compoundingB. m onthly compoundingC. d aily compoundingD. c ontinuous compoundingE. s emiannual compounding15.The net present value of a project is equal to the:A. p resent value of the future cash flows.B. p resent value of the future cash flows minus the initial cost.C. f uture value of the future cash flows minus the initial cost.D. f uture value of the future cash flows minus the present value of the initial cost.E. s um of the project’s anticipated cash flows.16.What is the present value of $6,811 to be received in one year if the discount rate is 6.5 percent?A.$6,395.31B.$6,023.58C.$6,643.29D.$6,671.13E.$7,253.7217.You plan to invest $6,500 for three years at 4 percent simple interest. What will your investmentbe worth at the end of the three years? A. $6,941.11A. A NSB. $7,280.00B. $7,311.62C. $7,250.00D. $6,760.0018.Shawn has $2,500 invested at a guaranteed rate of 4.35 percent, compounded annually. Whatwill his investment be worth after five years?A. $2,997.04B. $3,288.00C. $3,321.32D. $3,093.16E. $2,857.5919.Your parents plan to give you $200 a month for four years while you are in college. At a discountrate of 6 percent, compounded monthly, what are these payments worth to you when you first start college?A. $8,797.40B. $8,409.56C. $8,198.79D. $8,516.06E. $8,279.3220.You just won the lottery! As your prize you will receive $1,500 a month for 150 months. If you canearn 7 percent, compounded monthly, on your money, what is this prize worth to you today?A. $137,003.69B. $149,676.91C. $137,962.77D. $148,104.26E. $150,723.7621.Olivia is willing to pay $185 a month for four years for a car payment. If the interest rate is 4.9percent, compounded monthly, and she has a cash down payment of $2,500, what price car can she afford to purchase?A. $10,961.36B. $10,549.07C. $8,533.84D. $8,686.82E. $8,342.0522.You are the beneficiary of a life insurance policy. The insurance company offers two options forreceiving the proceeds: a lump sum of $50,000 today or payments of $550 a month for ten years.If you can earn 6 percent, compounded monthly, which option should you take and why?A. Y ou should accept the lump sum because the payments are only worth $49,540.40 today.B. Y ou should accept the payments because they are worth $51,523.74 today.C. Y ou should accept the payments because they are worth $53,737.08 today.D. Y ou should accept the $50,000 because the payments are only worth $49,757.69 today.E. Y ou should accept the $50,000 because the payments are only worth $48,808.17 today.23.Your employer contributes $50 a week to your retirement plan. Assume you work for youremployer for another twenty years and the applicable discount rate is 5 percent, compounded weekly. Given these assumptions, what is this employee benefit worth to you today?A. $29,144.43B. $35,920.55C. $32,861.08D. $26,446.34E. $36,519.0224.Wilt has a consulting contract with a firm that states that he will receive annual payments of$50,000 a year for five years with the first payment due today. What is the current value of this contract if the discount rate is 8.4 percent?A. $214,142.50B. $201,867.47C. $195,618.19D. $197,548.43E. $224,267.1025.Uptown Industries just decided to save $3,000 a quarter for the next three years. The money willearn 2.75 percent, compounded quarterly, and the first deposit will be made today. If thecompany had wanted to deposit one lump sum today, rather than make quarterly deposits, how much would it have had to deposit today to have the same amount saved at the end of the three years?A. $34,441.56B. $34,678.35C. $33,428.87D. $33,687.23E. $34,998.0126.You need some money today and the only friend you have that has any is your ‘miserly' friend.He agrees to loan you the money you need, if you make payments of $20 a month for the next six months. In keeping with his reputation, he requires that the first payment be paid today. He also charges you 1.5% interest per month. How much total interest does he expect to earn?A. $3.94B. $4.35C. $1.34D. $3.63E. $5.9627.Lois is purchasing an annuity that will pay $5,000 annually for 20 years, with the first annuitypayment made on the date of purchase. What is the value of the annuity on the purchase date given a discount rate of 7 percent?A. $54,282.98B. $52,970.07C. $56,677.98D. $56,191.91E. $66,916.2128.Denise will receive annual payments of $10,000 for the next 25 years. The discount rate is 6.8percent. What is the difference in the present value of these payments if they are paid at the beginning of each year rather than at the end of each year?A. $8,069B. $9,217C. $9,706D. $8,382E. $8,85029.You are comparing two annuities with equal present values. The applicable discount rate is 6.5percent. One annuity will pay $2,000 annually, starting today, for 20 years. The second annuity will pay annually, starting one year from today, for 20 years. What is the annual payment for the second annuity?A. $2,225B. $2,075C. $2,000D. $2,130E. $2,40530.Kay owns two annuities that will each pay $500 a month for the next 12 years. One payment isreceived at the beginning of each month while the other is received at the end of each month. Ata discount rate of 7.25 percent, compounded monthly, what is the difference in the present valuesof these annuities?A. $289.98B. $265.42C. $299.01D. $308.00E. $312.5031.What is the future value of $845 a year for seven years at an interest rate of 11.3 percent?A. $6,683.95B. $6,075.69C. $8,343.51D. $8,001.38E. $8,801.9132.What is the future value of $3,100 a year for six years at interest rate of 8.9 percent?A. $20,255.40B. $26,847.26C. $27,134.16D. $23,263.57E. $24,414.6733.Janet saves $3,000 a year at an interest rate of 4.2 percent. What will her savings be worth at theend of 35 years?A. $229,317.82B. $230,702.57C. $230,040.06D. $234,868.92E. $236,063.6634.You plan to save $2,400 a year and earn an average rate of interest of 5.6 percent. How muchmore will your savings be worth at the end of 40 years if you save at the beginning of each year rather than at the end of each year?A. $17,822.73B. $18,821.10C. $18,911.21D. $19,103.04E. $18,115.3135.You borrow $12,600 to buy a car. The terms of the loan call for monthly payments for five yearsat an interest rate of 4.65 percent, compounded monthly. What is the amount of each payment?A. $253.22B. $243.73C. $230.62D. $235.76E. $233.0436.You borrow $199,000 to buy a house. The mortgage rate is 5.5 percent, compounded monthly.The loan period is 30 years, and payments are made monthly. If you pay for the house according to the loan agreement, how much total interest will you pay?A. $218,086B. $198,161C. $207,764D. $211,086E. $185,05937.Luis has a management contract which grants him a lump sum payment of $20 million be paidupon the completion of his first five years of service. The company wants to set aside an equal amount of funds each year to cover this anticipated cash outflow. The company can earn 4.5 percent on these funds. How much must the company set aside each year for this purpose?A. $3,775,042.93B. $3,798,346.17C. $3,801,033.67D. $3,655,832.79E. $4,038,018.2238.On the day you retire, you have $389,900 in your retirement savings. You expect to earn 4.5percent, compounded monthly, and live 24 more years. How much can you withdraw from your savings each month during your retirement if you plan to die on the day you spend your last penny?A. $2,181.96B. $2,092.05C. $2,398.17D. $2, 072.00E. $2,216.2939.Donaldson’s purchased some property for $1.2 million, paid 25 percent down in cash, andfinanced the balance for 12 years at 7.2 percent, compounded monthly. What is the amount of each monthly mortgage payment?A. $8,440.01B. $8,978.26C. $9,351.66D. $9,399.18E. $9,513.6740.Assume you graduate with $31,300 in student loans at an interest rate of 5.25 percent,compounded monthly. If you want to have this debt paid in full within three years, how much must you pay each month?A. $871.30B. $873.65C. $876.79D. $941.61E. $980.4041.You are buying a car for $7,500, paying $900 down in cash, and financing the balance for 24months at 6.5 percent, compounded monthly. What is the amount of each monthly loanpayment?A. $318.64B. $294.01C. $302.02D. $264.78E. $245.0942.You want to purchase an annuity that will pay you $1,200 a quarter for 15 years and earn a returnof 5.5 percent, compounded quarterly. What is the most you should pay to purchase thisannuity?A. $52,988.16B. $48,811.20C. $47,455.33D. $48,450.67E. $52,806.3043.A car dealer is willing to lease you a car for $319 a month for 60 months. Payments are due onthe first day of each month starting with the day you sign the lease contract. If your cost of money is 4.9 percent, compounded monthly, what is the current value of the lease?A. $17,882.75B. $17,906.14C. $17,014.34D. $16,235.42E. $16,689.5444.Sara is the recipient of a trust that will pay her $500 on the first day of each month, startingimmediately and continuing for 40 years. What is the value of this inheritance today if theapplicable discount rate is 7.3 percent, compounded monthly?A. $76,811.30B. $67,557.52C. $89,204.04D. $78,192.28E. $80,006.0945.Beatrice invests $1,000 in an account that pays 5 percent simple interest. How much more couldshe have earned over a 10-year period if the interest had compounded annually?A. $132.45B. $135.97C. $128.89D. $117.09E. $121.6746.Nu-Tools plans to set aside an equal amount of money each year, starting today, so that it willhave $25,000 saved at the end of three years. If the firm can earn 4.7 percent, how much does it have to save annually?A. $7,596.61B. $7,689.16C. $8,004.67D. $8,414.14E. $8,333.3347.Starting today, Alicia is going to contribute $100 a month to her retirement account. Her employermatches her contribution by 50 percent. If these contributions remain constant, and she earns a monthly rate of .55 percent, how much will her savings be worth 40 years from now?A. $399,459.44B. $300,456.74C. $349,981.21D. $299,189.16E. $354,087.8848.An annuity costs $70,000 today, pays $3,500 a year, and earns a return of 4.5 percent. What isthe length of the annuity time period?A.54.96 yearsB.49.48 yearsC.52.31 yearsD.43.08 yearsE.48.00 years49.You are borrowing $5,200 at 7.8 percent, compounded monthly. The monthly loan payment is$141.88. How many loan payments must you make before the loan is paid in full?A. 30B. 36C. 40D. 42E. 4850.You are retired, have $264,500 in your savings, withdraw $2,000 each month, and earn 4.5percent, compounded monthly. How long will it be until you run out of money?A. 13.67 yearsB. 15.25 yearsC. 22.08 yearsD. 13.02 yearsE. 18.78 years51.A project is expected to produce cash flows of $48,000, $39,000, and $15,000 over the next threeyears, respectively. After three years, the project will be worthless. What is the present value of this project if the applicable discount rate is 15.25 percent?A. $89,201.76B. $80,809.09C. $73,457.96D. $97,808.17E. $93,132.4852.You are considering two savings options that each provide a rate of return of 4.65 percent. Thefirst option requires annual savings of $2,000, $2,500, and $3,000 over the next three years, respectively, with the first deposit due one year from today. The other option is to save one lump sum amount today. If you want to have the same balance in your savings at the end of the three years, regardless of the savings method you select, how much do you need to save today if you select the lump sum option?A. $6,811.50B. $6,791.42C. $7,128.23D. $6,607.23E. $7,500.0053.You are considering two insurance settlement offers. The first offer includes annual payments of$36,000, $42,000, and $50,000 over the next three years, respectively, with the first payment being made one year from today. The other offer is the payment of one lump sum amount today.The relevant discount rate is 7 percent. What is the minimum amount you should accept today if you are to select the lump sum offer?A. $119,877.67B. $111,144.18C. $105,000.10D. $118,924.27E. $114,556.8854.You are considering a 3-year job offer. The job offers an annual salary of $48,000, $51,000, and$55,000 a year for the next three years, respectively. The offer also includes a starting bonus of $2,500 payable immediately. What is this offer worth to you today at a discount rate of 6.5percent?A. $129,640.14B. $134,383.56C. $132,283.56D. $138,066.75E. $130,983.5655.You are considering a project with projected annual cash inflows of $32,200, $41,800, $22,900for the next three years, respectively. What is the value of the project today at a discount rate of14 percent?A. $86,487.47B. $75,866.20C. $77,103.18D. $81,292.25E. $66,549.3056.You expect an investment to return $11,300, $14,600, $21,900, and $38,400 annually over thenext four years, respectively. What is this investment worth to you today if you desire a rate of return of 16.5 percent?A. $64,253.91B. $58,700.89C. $63,732.41D. $55,153.57E. $59,928.1657.A 3-year project is expected to produce a cash flow of $82,400 in the first year and $148,600 inthe second year. The project has a present value of $303,764.34 at a discount rate of 12.75 percent. What is the expected cash flow in the third year of the project?A. $163,100B. $163,800C. $164,900D. $164,400E. $163,70058.Two years ago, the Fun Center deposited $3,200 in an investment account for the purpose ofbuying new equipment three years from today. Today, it is adding another $5,000 to this account.It plans on making a final deposit of $3,500 to the account next year. How much will be available when it is ready to buy the equipment, assuming the account earns a rate of return of 6.85percent?A. $13,619.29B. $13,430.84C. $12,746.17D. $14,194.54E. $14,552.2159.Anna has $38,654 in a savings account that pays 2.3 percent interest. Assume she withdraws$10,000 today and another $10,000 one year from today. If she waits and withdraws theremaining entire balance four years from today, what will be the amount of that withdrawal?A. $20,916.78B. $20,109.08C. $20,676.53D. $19,341.02E. $19,608.0760.Theo is depositing $1,300 today in an account with an expected rate of return of 8.1 percent. If hedeposits an additional $3,200 two years from today, and $4,000 three years from today, what will his account balance be ten years from today?A. $14,044.89B. $16,412.31C. $15,182.53D. $15,699.54E. $17,741.7161.Leo received $7,500 today and will receive another $5,000 two years from today. He will investthese funds when he receives them and expects to earn a rate of return of 11.5 percent. What value does he expect his investments to have five years from today?A. $18,758.04B. $18,806.39C. $19,856.13D. $20,314.00E. $19,904.3662.Suzette is receiving $10,000 today, $15,000 one year from today, and $25,000 four years fromtoday. She will immediately invest these funds for retirement. If she earns 9.6 percent on her investments, how much will she have in savings 30 years from today?A. $586,124.93B. $591,414.14C. $646,072.91D. $620,008.77E. $641,547.3963.BJ’s goal is to have $50,000 saved at the end of Year 5. At the end of Year 2, they can add$7,500 to their savings but they want to deposit the remainder they need to reach their goal today, Year 0, as a lump sum deposit. If they can earn 4.5 percent, how much must they deposit today? A. $31,867.74A. A NSB. $33,254.58B. $33,108.09C. $34,276.34D. $34,642.2864.The government imposed a fine on the Not-So-Legal Company. The fine calls for a payment of $100,000 today, $150,000 one year from today, and $200,000 two years from today. Thegovernment will hold the funds until the final payment is collected and then donate the entire amount to charity. The government has agreed to pay annual interest of 3 percent on the held funds. How much will be donated to charity in two years?A. $475,000.00B.$460,590.00C. $447,174.76D. $451,050.05E.$474,407.7065.Benson’s established a trust fund that provides $125,000 in college scholarships each year. Thetrust fund earns a rate of return of 6.15 percent and distributes only its annual income. How much money did Benson’s contribute to establish the trust fund?A.$2,291,613.13B.$2,032,520.33C.$2,150,000.00D.$2,018,970.44E.$1,987,408.1566.A preferred stock pays an annual dividend of $6.50 a share and has an annual rate of return of7.35 percent. What is the stock price?A. $74.50B. $71.78C. $92.09D.$88.44E.$77.7867.You want to establish a trust fund that will provide $50,000 a year forever for your heirs. If thefund can earn a guaranteed rate of return of 4.5 percent, how much must you deposit in a lump sum to establish this trust? This will be the only deposit you make to the fund.A.$1,333,333.33B.$2,250,000.00C.$1,250,000.00D.$1,666,666.67E.$1,111,111.1168.You just paid $525,000 for a security that will pay you and your heirs $25,000 a year forever.What rate of return will you earn?A. 4.95%B. 4.39%C. 4.76%D. 5.00%E. 4.50%69.Anna’s grandmother established a trust and deposited $250,000 into it. The trust pays aguaranteed 4.25 percent rate of return. Anna will receive all of the interest earnings on an annual basis and a charity will receive the principal amount at Anna’s passing. How much incom e will Anna receive each year?A. $10,000B. $8,500C. $12,400D.$10,625E.$12,75070.The preferred stock of ABC Co. offers a rate of return of 7.87 percent. The stock is currentlypriced at $63.53 per share. What is the amount of the annual dividend?A. $5.20B. $5.00C. $4.60D. $5.50E. $6.0071.Your credit card company charges you 1.35 percent per month. What is the annual percentagerate on your account?A. 16.45%B. 16.30%C. 16.39%D. 16.20%E. 16.56%72.What is the annual percentage rate on a loan that charges interest of 1.65 percent per quarter?A. 6.50%B. 6.45%C. 6.54%D. 6.60%E. 6.72%73.A credit card compounds interest monthly and has an effective annual rate of 12.67 percent.What is the annual percentage rate?A. 12.35%B. 12.00%C. 11.99%D. 11.87%E. 11.93%74.What is the effective annual rate if your credit card charges you 10.64 percent compoundeddaily? (Assume a 365-day year.)A. 10.79%B. 11.22%C. 11.95%D. 11.48%E. 12.01%75.Taylor’s Hardware offers credit at an APR of 14.9 percent and compounds interest monthly. Whatis the actual rate of interest they are charging?A. 13.97%B. 14.90%C. 15.48%D. 15.96%E. 16.10%76.The pawn shop adds 2 percent to loan balances for every two weeks a loan is outstanding. Whatis the effective annual rate they are charging?A. 79.97%B. 73.08%C. 51.21%D. 67.34%E. 83.43%77.You have $2,500 to deposit into a savings account. The five banks in your area offer the followingrates. In which bank should you deposit your savings?A. B ank A: 3.75%, compounded annuallyB. B ank B: 3.69%, compounded monthlyC. B ank C: 3.70% compounded semi-annuallyD. B ank D: 3.67% compounded continuouslyE. B ank E; 3.65% compounded quarterly78.What is the effective annual rate of 13.52 percent compounded continuously?A. 14.23%B. 13.84%C. 13.97%D. 14.48%E. 14.56%79.What is the effective annual rate of 10.25% compounded continuously?A. 10.98%B. 11.11%C. 10.79%D. 11.04%E. 10.86%80.The Smart Bank wants to be competitive based on quoted loan rates and thus must offer loans atan annual percentage rate of 7.9 percent. What is the maximum rate the bank can actually earn based on this quoted rate?A. 7.90%B. 8.18%C. 8.20%D. 8.22%E. 8.39%81.Thirty-five years ago, your father invested $2,000. Today that investment is worth $98,407. Whatrate of return has your father earned on his investment?A. 10.94%B. 11.33%C. 10.50%D. 11.77%E. 9.99%82.What is the future value of investing $5,650 for 14 years at a continuously compounded rate of8.6 percent?A. $17,933.54B. $16,685.44C. $19,369.83D. $18,833.85E. $13,183.8583.Assume you could invest $25,000 at a continuously compounded rate of 10 percent. What wouldyour investment be worth at the end of 50 years?A. $2,933,054B. $3,500,824C. $3,911,215D. $3,710,329E. $3,648,02984.A trust has been established to fund scholarships in perpetuity. The next annual distribution willbe $1,200 and future payments will increase by 3 percent per year. What is the value of this trust at a discount rate of 7.4 percent?A. $17,189.19B. $19,960.00C. $27,272.73D. $24,609.11E. $30,388.1885.Stu can purchase a one-bedroom house near his college today for $110,000, including the cost ofsome minor repairs. He expects to be able to resell it in four years for $150,000 if he just puts a little effort into cleaning up the property. At a discount rate of 6.5 percent, what is the expected net present value of this purchase opportunity?A. $3,001.61B. $2,487.43C. $6,598.46D. $7,208.18E. $4,311.02。
FINS5514 corporate finance 考点知识总结
1. Agency TheoryJensen & Meckling (1976) state that the firm is a nexus of contracts• All stakeholders of the firm are concerned only with self-interest• This creates conflicts of interest between:– Shareholders and managers– Shareholders and debtholders• Managers prefer to:• Increase their job security• Increase their own power and status• Consume excessive perquisites• They may do this at the expense of SWM• Sharehol ders know this, and therefore attempt to protect against it by:• Linking managerial salaries to firm performance• Limit the free cash flows under managerial discretion•Monitor managers through, for example, audits or tighter shareholder concentration• All of the activities of shareholders to decrease agency conflicts occur at a cost, called, agency costs.• Changes in policy• Opportunity costs if managers unable to invest in positive NPV projects• Monitoring costs2. Investment Criteria• Net Present Value• The Payback Rule• The Discounted Payback• The Average Accounting Return• The Internal Rate of Return• The Profitability Index• The Practice of Capital BudgetingWe need to ask the following questions:• Does the decision rule ad just for the time value of money?• Does the decision rule adjust for risk?• Does the decision rule provide information on whether we are creating value for the firm?3. What-if Analysis• Scenario Analysis: determination of what happens to NPV when we ask what-if analysis. Best, base, worst case.• Sensitivity Analysis: investigation of what happens to NPV when only one variable is changed.• Simulation Analysis: a combination of scenario and sensitivity analysis.4. DGM, CAPM and WACC5. Types of Underwriting• Firm Commitment Underwriting▪Issuer sells entire issue to underwriting syndicate▪The syndicate then resells the issue to the public▪The underwriter makes money on the spread between the price paid to the issuer and the price received from investors when the stock is sold▪The syndicate bears the risk of not being able to sell the entire issue for more than the cost▪Most common type of underwriting in the United States• Best Efforts Underwriting▪Underwriter must make their “best effort” to sell the securities at an agreed-upon offering price ▪The company bears the risk of the issue not being sold▪The offer may be pulled if there is not enough interest at the offer price and the company does not get the capital and they have still incurred substantial flotation costs▪Not as common as it used to be• Dutch Auction Underwriting▪Underwriter accepts a series of bids that include number of shares and price per share▪The price that everyone pays is the highest price that will result in all shares being sold▪There is an incentive to bid high to make sure you get in on the auction but knowing that you willprobably pay a lower price than you bid▪The Treasury has used Dutch auctions for years▪Google was the first large Dutch auction IPO6. M&M Theory, Pecking-Order Theory, Static Trade-off theoryPecking-Order Theory:• Many, if not most, large profitable firms such as Google and Microsoft use very little, if any, debtThe higher the market valuation, generally the less the debt• Raising capital is expensiveSuccessful firms do not have to resort to external sources of finance-use internally generated cash • If stock is overvalued, management will prefer to issue new equity• Anticipating this, prospective new shareholders will downgrade the stock and price will fall• Pecking order: retained earnings first; external debt second; external equity, last resort• Implications:No target capital structureProfitable companies use less debtCompanies try to create financial slackStatic Trade-off theory:It is the theory that a firm borrows up to the point where the tax benefit from an extra dollar in debt is exactly equal to the cost that comes from the increased probability of financial distress. We call this the static theory because it assumes that the firm is fixed in terms of its assets and operations and it considers only possible changes in the debt-equity ratio.7. The saying is “a bird in the hand is worth two in the bush”, that is, a cash dividend in the hand is worth more than the promise of higher dividends in the future if the firm uses excessive retained cash to make negative NPV investments (i.e., essentially to “steal” shareholder income). U nder M&M this is assumed not to happen, but it does in reality. If the retained cash yields the firm’s cost of capital then the “two in the bush” pays-off and M&M goes through.8. The “clientele effect” refers to the tendency under the “classical” tax system in use in the US for investors subject to high personal tax on dividends to prefer to hold companies that retain the majority of their income and generate more lightly taxed realized capital gains when the stock is sold. Investors in a moretax-advantageous position would prefer to hold more relatively high dividend paying stock. If an individual company switches its dividend policy from high to low, it may reallocate itself from one clientele to another but not have a significant effect on the overall supply of dividends to that clientele. In which case, its change in policy will have no effect on its valuation.9. “Dividend signaling” refers to the idea that it will be costly to management (and sh areholders) if a company announces a high payout (dividend) policy and then in future has to reverse this policy because the firm cannot generate enough cash. If this is true, the firm may be able to credibly signal improved earnings prospects by raising its dividend. Dividend signaling may not be very credible because if the firm discovers it has far more positive NPV projects than expected, it may need to limit its dividends in order to finance its now better prospects.10. Dividend policy: residual dividend approach, dividend stability, compromise dividend policy11. DIVIDEND IMPUTATION和classic tax system1.AGENCY COST，产生的原因和怎么解决2.NPV,IRR,PAYBACK PERIOD, AAP,PI好处不好处3.DGM, CAPM, WACC的好处不好处4.MM定律，结合后面的PECKING ORDER，static trade-off theory, bird-in-hand theory, singnaling theory5. Three types of what-if analyses6.procedure of selling securities to public7. types of underwriting8.DIVIDEND IMPUTATION和普通分红的区别9. Dividend policy: residual dividend approach, dividend stability, compromise dividend policy10.clientele effect, green shoe, lockupCalculation1.levered cost of capital (EPS, value of the firm, cost of capital, unlevered cost of capital)2. NPV(choose one; replacement problem)3.merger4. annuity5.WACC (floatation costs)。
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And institutional investors go along with incumbent managers…
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Board of Directors as a disciplinary mechanism
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The CEO often hand-picks directors..
Managers
Protect
bondholder
Interests
No Social Costs SOCIETY
Costs can be traced to firm
Reveal
Markets are
information efficient and
honestly and assess effect on
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The Annual Meeting as a disciplinary venue
The power of stockholders to act at annual meetings is diluted by three factors
• Most small stockholders do not go to meetings because the cost of going to the meeting exceeds the value of their holdings.
Directors often hold only token stakes in their companies. The Korn/Ferry survey found that 5% of all directors in 1992 owned less than five shares in their firms. Most directors in companies today still receive more compensation as directors than they gain from their stockholdings. While share ownership is up among directors today, they usually get these shares from the firm (rather than buy them).
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The Classical Viewpoint
Van Horne: "In this book, we assume that the objective of the firm is to maximize its value to its stockholders" Brealey & Myers: "Success is usually judged by value: Shareholders are made better off by any decision which increases the value of their stake in the firm... The secret of success in financial management is to increase value." Copeland & Weston: The most important theme is that the objective of the firm is to maximize the wealth of its stockholders." Brigham and Gapenski: Throughout this book we operate on the assumption that the management's primary goal is stockholder wealth maximization which translates into maximizing the price of the common stock.
Many directors are themselves CEOs of other firms. Worse still, here are cases where CEOs sit on each other’s boards.
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Directors lack the expertise (and the willingness) to ask the necessary tough questions..
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Why traditional corporate financial theory focuses on maximizing stockholder wealth.
Stock price is easily observable and constantly updated (unlike other measures of performance, which may not be as easily observable, and certainly not updated as frequently). If investors are rational (are they?), stock prices reflect the wisdom of decisions, short term and long term, instantaneously. The objective of stock price performance provides some very elegant theory on:
• For large stockholders, the path of least resistance, when confronted by managers that they do not like, is to vote with their feet.
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mistakes and
misleading can over react
information
FINANCIAL MARKETS
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I. Stockholder Interests vs. Management Interests
In theory: The stockholders have significant control over management. The mechanisms for disciplining management are the annual meeting and the board of directors. In Practice: Neither mechanism is as effective in disciplining management as theory posits.
• Are a majority of the directors outside directors? • Is the chairman of the board independent of the company (and not the CEO of the
company)? • Are the compensation and audit committees composed entirely of outsiders?
A 1992 survey by Korn/Ferry revealed that 74% of companies relied on recommendations from the CEO to come up with new directors; Only 16% used an outside search firm. While that number has changed in recent years, CEOs still determine who sits on their boards. While more companies have outsiders involved in picking directors now, CEOs still exercise significant influence over the process.
on time
value
FINANCIAL MARKETS
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What can go wrong?
STOCKHOLDERS
Have little control over managers
Managers put their interests above stockholders
In most boards, the CEO continues to be the chair. Not surprisingly, the CEO sets the agenda, chairs the meeting and controls the information provided to directors. The search for consensus overwhelms any attempts at confrontation.
The Objective in Corporate Finance
“If you don’t know where you are going, it does not matter how you get there”