ross7ech14longterm financing an introduction(公司理财,罗斯,第七版)教学提纲.ppt

14 0 CHAPTER 14 Long TermFinancing AnIntroduction 14 1 ChapterOutline 14 1CommonStock14 2CorporateLong TermDebt TheBasics14 3PreferredStock14 4PatternsofFinancing14 5RecentTrendsinCapitalStructure14 6SummaryandConclusions 14 2 14 1CommonStock ParandNo ParStockAuthorizedversusIssuedCommonStockCapitalSurplusRetainedEarningsMarketValue BookValue andReplacementValueShareholders RightsDividendsClassesofStock 14 3 ParandNo ParStock Thestatedvalueonastockcertificateiscalledtheparvalue Parvalueisanaccountingvalue notamarketvalue Thetotalparvalue thenumberofsharesmultipliedbytheparvalueofeachshare issometimescalledthededicatedcapitalofthecorporation Somestockshavenoparvalue 14 4 Authorizedvs IssuedCommonStock Thearticlesofincorporationmuststatethenumberofsharesofcommonstockthecorporationisauthorizedtoissue Theboardofdirectors afteravoteoftheshareholders mayamendthearticlesofincorporationtoincreasethenumberofshares Authorizingalargenumberofsharesmayworryinvestorsaboutdilutionbecauseauthorizedsharescanbeissuedlaterwiththeapprovaloftheboardofdirectorsbutwithoutavoteoftheshareholders 14 5 CapitalSurplus Usuallyreferstoamountsofdirectlycontributedequitycapitalinexcessoftheparvalue Forexample suppose1 000sharesofcommonstockhavingaparvalueof 1eacharesoldtoinvestorsfor 8pershare Thecapitalsurpluswouldbe 8 1 1 000 7 000 14 6 RetainedEarnings Notmanyfirmspayout100percentoftheirearningsasdividends Theearningsthatarenotpaidoutasdividendsarereferredtoasretainedearnings 14 7 MarketValue BookValue andReplacementValue MarketValueisthepriceofthestockmultipliedbythenumberofsharesoutstanding AlsoknownasMarketCapitalizationBookValueThesumofparvalue capitalsurplus andaccumulatedretainedearningsisthecommonequityofthefirm usuallyreferredtoasthebookvalueofthefirm ReplacementValueThecurrentcostofreplacingtheassetsofthefirm Atthetimeafirmpurchasesanasset marketvalue bookvalue andreplacementvalueareequal 14 8 Shareholders Rights Therighttoelectthedirectorsofthecorporationbyvoteconstitutesthemostimportantcontroldeviceofshareholders Directorsareelectedeachyearatanannualmeetingbyavoteoftheholdersofamajorityofshareswhoarepresentandentitledtovote Theexactmechanismvariesacrosscompanies Theimportantdifferenceiswhethersharesaretobevotedcumulativelyorvotedstraight 14 9 CumulativeversusStraightVoting Theeffectofcumulativevotingistopermitminorityparticipation Undercumulativevoting thetotalnumberofvotesthateachshareholdermaycastisdeterminedfirst Usually thenumberofsharesownedorcontrolledbyashareholderismultipliedbythenumberofdirectorstobeelected Eachshareholdercandistributethesevotesashewishesoveroneormorecandidates StraightvotingworkslikeaU S politicalelection Shareholdershaveasmanyvotesassharesandeachpositionontheboardhasitsownelection Atendencytofreezeoutminorityshareholders 14 10 Cumulativevs StraightVoting Example Imagineafirmwithtwoshareholders Mr SmithandMs Wesson Mr Smithowns60 ofthefirm 600shares andMs Wesson40 400shares Therearethreeseatsupforelectionontheboard Understraightvoting Mr Smithgetstopickallthreeseats Undercumulativevoting Ms Wessonhas1 200votes 400shares 3seats andMr Smith1 800votes Ms Wessoncanelectatleastoneboardmember 14 11 ProxyVoting Aproxyisthelegalgrantofauthoritybyashareholdertosomeoneelsetovotehisorhershares Forconvenience theactualvotinginlargepubliccorporationsisusuallydonebyproxy 14 12 Dividends Unlessadividendisdeclaredbytheboardofdirectorsofacorporation itisnotaliabilityofthecorporation Acorporationcannotdefaultonanundeclareddividend Thepaymentofdividendsbythecorporationisnotabusinessexpense Therefore theyarenottax deductible DividendsreceivedbyindividualshareholdersareforthemostpartconsideredordinaryincomebytheIRSandarefullytaxable Thereisanintra corporatedividendexclusion 14 13 ClassesofStock Whenmorethanoneclassofstockexists theyareusuallycreatedwithunequalvotingrights Manycompaniesissuedualclassesofcommonstock Thereasonhastodowithcontrolofthefirm Lease McConnell andMikkelsonfoundthemarketpricesofstockswithsuperiorvotingrightstobeabout5percenthigherthanthepricesofotherwise identicalstockswithinferiorvotingrights 14 14 14 2CorporateLong TermDebt TheBasics InterestversusDividendsIsItDebtorEquity BasicFeaturesofLong TermDebtDifferentTypesofDebtRepaymentSenioritySecurityIndenture 14 15 InterestversusDividends Debtisnotanownershipinterestinthefirm Creditorsdonotusuallyhavevotingpower Thecorporation spaymentofinterestondebtisconsideredacostofdoingbusinessandisfullytax deductible Dividendsarepaidoutofafter taxdollars Unpaiddebtisaliabilityofthefirm Ifitisnotpaid thecreditorscanlegallyclaimtheassetsofthefirm 14 16 IsItDebtorEquity Somesecuritiesblurthelinebetweendebtandequity Corporationsareveryadeptatcreatinghybridsecuritiesthatlooklikeequitybutarecalleddebt Obviously thedistinctionisimportantattaxtime Acorporationthatsucceedsiscreatingadebtsecuritythatisreallyequityobtainsthetaxbenefitsofdebtwhileeliminatingitsbankruptcycosts 14 17 BasicFeaturesofLong TermDebt ThebondindentureusuallylistsAmountofIssue DateofIssue MaturityDenomination Parvalue AnnualCoupon DatesofCouponPaymentsSecuritySinkingFundsCallProvisionsCovenantsFeaturesthatmaychangeovertimeRatingYield to MaturityMarketprice 14 18 DifferentTypesofDebt Adebentureisanunsecuredcorporatedebt whereasabondissecuredbyamortgageonthecorporateproperty Anoteusuallyreferstoanunsecureddebtwithamaturityshorterthanthatofadebenture perhapsunder10years 14 19 Repayment Long termdebtistypicallyrepaidinregularamountsoverthelifeofthedebt Thepaymentoflong termdebtbyinstallmentsiscalledamortization Amortizationisusuallyarrangedbyasinkingfund Eachyearthecorporationplacesmoneyintoasinkingfund andthemoneyisusedtobuybackthebonds 14 20 Seniority Seniorityindicatespreferenceinpositionoverotherlenders Somedebtissubordinated Intheeventofdefault holdersofsubordinateddebtmustgivepreferenceotherspecifiedcreditorswhoarepaidfirst 14 21 Security Securityisaformofattachmenttoproperty Itprovidesthatthepropertycanbesoldineventofdefaulttosatisfythedebtforwhichthesecurityisgiven Amortgageisusedforsecurityintangibleproperty Debenturesarenotsecuredbyamortgage 14 22 Indenture Thewrittenagreementbetweenthecorporatedebtissuerandthelender Setsforththetermsoftheloan MaturityInterestrateProtectivecovenants 14 23 14 3PreferredStock Representsequityofacorporation butisdifferentfromcommonstockbecauseithaspreferenceovercommoninthepaymentsofdividendsandintheassetsofthecorporationintheeventofbankruptcy Preferredshareshaveastatedliquidatingvalue usually 100pershare Preferreddividendsareeithercumulativeornoncumulative 14 24 IsPreferredStockReallyDebt Agoodcasecanbemadethatpreferredstockisreallydebtindisguise Thepreferredshareholdersreceiveastateddividend Intheeventofliquidation thepreferredshareholdersareentitledtoafixedclaim Unlikedebt preferredstockdividendscannotbedeductedasinterestexpensewhendeterminingtaxablecorporateincome MostpreferredstockintheU S isheldbycorporateinvestors Theygeta70 percentincometaxexemption 14 25 ThePreferred StockPuzzle Therearetwooffsettingtaxeffectstoconsiderinevaluatingpreferredstock Dividendsarenotdeductedfromcorporateincomeincomputingthetaxliabilityoftheissuingcorporation Whenacorporationbuyspreferredstock 70percentofthedividendsreceivedareexemptfromcorporatetaxation Mostagreethat2 doesnotfullyoffset1 Giventhatpreferredstockofferslessflexibilitytotheissuerthancommonstock somehavearguedthatpreferredstockshouldnotexist Yetitdoes 14 26 14 4PatternsofFinancing Internallygeneratedcashflowdominatesasasourceoffinancing typicallybetween70and90 Firmsusuallyspendmorethantheygenerateinternally thedeficitisfinancedbynewsalesofdebtandequity Netnewissuesofequityaredwarfedbynewsalesofdebt Thisisconsistentwiththepeckingorderhypothesis Firmsinotherco