公司理财原版英文课件Chap029
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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Chap.ppt
• Understand the basic components of the bankruptcy process
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
• When we increase the amount 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
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
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
• When we increase the amount 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
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
公司理财培训课件(PPT 38页)
❖Don is trying to sell a piece of land in Alaska. Yesterday, he was offered $10,000 for the property. He was about ready to accept the offer when another individual offered him $11,424. However, the second offer was to be paid a year from now. Don has satisfied himself that both buyers are honest and financially solvent, so he has no fear that the offer he selects will fall through. Which offer should Don choose?
❖Mike, Don’s financial advisor, points out that if Don takes the first offer, he could invest the $10,000 in the bank at an insured
4.1 The One-Period Case
PV
$20,000
0
1
2
3
4
5
$9,943.53
$20,000 (1.15)5
❖In the multiperiod case, the formula for the present can be written as:
PV
CT (1 r)T
CT
1 (1 r)T
1 (1 r)T
{财务管理公司理财}公司理财经典讲义英文版
of the Firm
The Capital Structure Decision
Current
Current Assets
Liabilities
How can the firm
raise the money Fixed Assets for the required
Long-Term Debt
1 Tangible investments?
investments?
McGraw-Hill/Irwin
© 2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
1-4
The Balance-Sheet Model
of the Firm
Total Value of Assets:
Total Firm Value to Investors:
Current
Current Assets
Liabilities Long-Term
Debt
Fixed Assets
1 Tangible
2 Intangible
McGraw-Hill/Irwin
Shareholders’ Equity
© 2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
2750%50%30% DebtDeEbtquity
5705%
Equity
McGraw-Hill/Irwin
If how you slice the pie affects the size of the pie, then the capital structure decision matters.
公司理财(罗斯)第2章(英文)
McGraw-Hill/Irwin Corporate Finance, 7/e 2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
2-2
Sources of Information
Annual reports Wall Street Journal Internet
2.1 The Balance Sheet 2.2 The Income Statement 2.3 Net Working Capital 2.4 Financial Cash Flow 2.5 The Statement of Cash Flows 2.6 Financial Statement Analysis 2.7 Summary and Conclusions
McGraw-Hill/Irwin Corporate Finance, 7/e 2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
2-6
Debt versus Equity
Generally, when a firm borrows it gives the bondholders first claim on the firm’s cash flow. Thus shareholder’s equity is the residual difference between assets and liabilities.
Total assets
McGraw-Hill/Irwin Corporate Finance, 7/e
$1,879
$1,742
2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
2-2
Sources of Information
Annual reports Wall Street Journal Internet
2.1 The Balance Sheet 2.2 The Income Statement 2.3 Net Working Capital 2.4 Financial Cash Flow 2.5 The Statement of Cash Flows 2.6 Financial Statement Analysis 2.7 Summary and Conclusions
McGraw-Hill/Irwin Corporate Finance, 7/e 2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
2-6
Debt versus Equity
Generally, when a firm borrows it gives the bondholders first claim on the firm’s cash flow. Thus shareholder’s equity is the residual difference between assets and liabilities.
Total assets
McGraw-Hill/Irwin Corporate Finance, 7/e
$1,879
$1,742
2005 The McGraw-Hill Companies, Inc. All Rights Reserved.
《公司理财》斯蒂芬A.罗斯..,机械工业出版社 英文课件
Strong Form
– Security prices reflect all information—public and private.
McGraw-Hill/Irwin
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Weak Form
– Security prices reflect all information found in past prices and volume.
Semi-Strong Form
– Security prices reflect all publicly available information.
McGraw-Hill/Irwin
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
13-2
13.1 Can Financing Decisions Create Value?
Earlier parts of the book show how to evaluate investment projects according the NPV criterion. The next five chapters concern financing decisions.
McGraw-Hill/Irwin
Copyright 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
13-10
Why Technical Analysis Fails
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Both Firms Have Debt
How Can Shareholders Reduce their Losses from the Coinsurance Effect?
Retire debt pre-merger and/or increase post-merger debt usage.
29-7
Synergy
Suppose firm A is contemplating acquiring firm B. The synergy from the acquisition is Synergy = VAB – (VA + VB) The synergy of an acquisition can be determined from the standard discounted cash flow model: T
29-15
29.7 Friendly vs. Hostile Takeovers
In a friendly merger, both companies’ management are receptive. In a hostile merger, the acquiring firm attempts to gain control of the target without their approval.
Consolidation
Entirely new firm is created from combination of existing firms
29-4
Acquisitions
A firm can be acquired by another firm or individual(s) purchasing voting shares of the firm’s stock Tender offer – public offer to buy shares Stock acquisition
Chapter 29
Mergers and Acquisitions
McGraw-Hill/Irwin
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.
Key Concepts and Skills
Be able to define the various terms associated with M&A activity Understand the various reasons for mergers and whether or not those reasons are in the best interest of shareholders Understand the various methods for paying for an acquisition Understand the various defensive tactics that are available
Diversific wish to diversify can accomplish this at much lower cost with one phone call to their broker than can management with a takeover.
29-13
Cash Acquisition
The NPV of a cash acquisition is:
NPV = (VB + ΔV) – cash cost = VB* – cash cost VAB = VA + (VB* – cash cost)
Value of the combined firm is:
29-1
Chapter Outline
29.1 The Basic Forms of Acquisitions 29.2 Synergy 29.3 Sources of Synergy 29.4 Two Financial Side Effects of Acquisitions 29.5 A Cost to Stockholders from Reduction in Risk 29.6 The NPV of a Merger 29.7 Friendly versus Hostile Takeovers 29.8 Defensive Tactics 29.9 Do Mergers Add Value? 29.10 The Tax Forms of Acquisitions 29.11 Accounting for Acquisitions 29.12 Going Private and Leveraged Buyouts 29.13 Divestitures
Synergy =
S
t=1
DCFt
(1 + R)t
29-8
29.3 Sources of Synergy
Revenue Enhancement Cost Reduction
Replacement of ineffective managers Economy of scale or scope Net operating losses Unused debt capacity
Tax Gains
Incremental new investment required in working capital and fixed assets
29-9
Calculating Value
Avoiding Mistakes
Do not ignore market values Estimate only Incremental cash flows Use the correct discount rate Do not forget transactions costs
29-3
Merger versus Consolidation
Merger
One firm is acquired by another Acquiring firm retains name and acquired firm ceases to exist Advantage – legally simple Disadvantage – must be approved by stockholders of both firms
29-12
29.6 The NPV of a Merger
Typically, a firm would use NPV analysis when making acquisitions. The analysis is straightforward with a cash offer, but it gets complicated when the consideration is stock.
29-6
29.2 Synergy
Most acquisitions fail to create value for the acquirer. The main reason why they do not lies in failures to integrate two companies after a merger.
Often, the entire NPV goes to the target firm. Remember that a zero-NPV investment may also be desirable.
29-14
Stock Acquisition
Value of combined firm
VAB = VA + VB + DV
Cost of acquisition
Depends on the number of shares given to the target stockholders Depends on the price of the combined firm’s stock after the merger
Considerations when choosing between cash and stock
Sharing gains – target stockholders do not participate in stock price appreciation with a cash acquisition Taxes – cash acquisitions are generally taxable Control – cash acquisitions do not dilute control
No stockholder vote required Can deal directly with stockholders, even if management is unfriendly May be delayed if some target shareholders hold out for more money – complete absorption requires a merger Horizontal – both firms are in the same industry Vertical – firms are in different stages of the production process Conglomerate – firms are unrelated