罗斯公司理财CorporateFinance第七版英文Ch01PPT.ppt

1 1 CHAPTER 1 IntroductiontoCorporateFinance 1 2 ChapterOutline 1 1WhatisCorporateFinance 1 2CorporateSecuritiesasContingentClaimsonTotalFirmValue1 3TheCorporateFirm1 4GoalsoftheCorporateFirm1 5FinancialMarkets1 6OutlineoftheText 1 3 WhatisCorporateFinance CorporateFinanceaddressesthefollowingthreequestions Whatlong terminvestmentsshouldthefirmengagein Howcanthefirmraisethemoneyfortherequiredinvestments Howmuchshort termcashflowdoesacompanyneedtopayitsbills 1 4 TheBalance SheetModeloftheFirm 1 5 TheBalance SheetModeloftheFirm CurrentAssets FixedAssets1Tangible2Intangible Shareholders Equity CurrentLiabilities Long TermDebt Whatlong terminvestmentsshouldthefirmengagein TheCapitalBudgetingDecision 1 6 TheBalance SheetModeloftheFirm Howcanthefirmraisethemoneyfortherequiredinvestments TheCapitalStructureDecision CurrentAssets FixedAssets1Tangible2Intangible Shareholders Equity CurrentLiabilities Long TermDebt 1 7 TheBalance SheetModeloftheFirm Howmuchshort termcashflowdoesacompanyneedtopayitsbills TheNetWorkingCapitalInvestmentDecision NetWorkingCapital Shareholders Equity CurrentLiabilities CurrentAssets FixedAssets1Tangible2Intangible Long TermDebt 1 8 CapitalStructure Thevalueofthefirmcanbethoughtofasapie Thegoalofthemanageristoincreasethesizeofthepie TheCapitalStructuredecisioncanbeviewedashowbesttosliceupathepie Ifhowyouslicethepieaffectsthesizeofthepie thenthecapitalstructuredecisionmatters 50 Debt 50 Equity 1 9 HypotheticalOrganizationChart 1 10 TheFinancialManager Tocreatevalue thefinancialmanagershould Trytomakesmartinvestmentdecisions Trytomakesmartfinancingdecisions 1 11 Cashflowfromfirm C TheFirmandtheFinancialMarkets Taxes D Firmissuessecurities A Retainedcashflows F Investsinassets B Dividendsanddebtpayments E CurrentassetsFixedassets Short termdebtLong termdebtEquityshares Ultimately thefirmmustbeacashgeneratingactivity Thecashflowsfromthefirmmustexceedthecashflowsfromthefinancialmarkets 1 12 1 2CorporateSecuritiesasContingentClaimsonTotalFirmValue Thebasicfeatureofadebtisthatitisapromisebytheborrowingfirmtorepayafixeddollaramountofbyacertaindate Theshareholder sclaimonfirmvalueistheresidualamountthatremainsafterthedebtholdersarepaid Ifthevalueofthefirmislessthantheamountpromisedtothedebtholders theshareholdersgetnothing 1 13 DebtandEquityasContingentClaims F Debtholdersarepromised F Ifthevalueofthefirmislessthan F theygetthewhateverthefirmifworth Ifthevalueofthefirmismorethan F debtholdersgetamaximumof F Ifthevalueofthefirmislessthan F shareholdersgetnothing Ifthevalueofthefirmismorethan F shareholdersgeteverythingabove F Algebraically thebondholder sclaimis Min F X Algebraically theshareholder sclaimis Max 0 X F 1 14 F Debtholdersarepromised F Ifthevalueofthefirmislessthan F theshareholder sclaimis Max 0 X F 0andthedebtholder sclaimisMin F X X Thesumoftheseis X Ifthevalueofthefirmismorethan F theshareholder sclaimis Max 0 X F X Fandthedebtholder sclaimis Min F X F Thesumoftheseis X CombinedPayoffstoDebtandEquity 1 15 1 3TheCorporateFirm Thecorporateformofbusinessisthestandardmethodforsolvingtheproblemsencounteredinraisinglargeamountsofcash However businessescantakeotherforms 1 16 FormsofBusinessOrganization TheSoleProprietorshipThePartnershipGeneralPartnershipLimitedPartnershipTheCorporationAdvantagesandDisadvantagesLiquidityandMarketabilityofOwnershipControlLiabilityContinuityofExistenceTaxConsiderations 1 17 AComparisonofPartnershipandCorporations 1 18 1 4GoalsoftheCorporateFirm Thetraditionalansweristhatthemanagersofthecorporationareobligedtomakeeffortstomaximizeshareholderwealth 1 19 TheSet of ContractsPerspective Thefirmcanbeviewedasasetofcontracts Oneofthesecontractsisbetweenshareholdersandmanagers Themanagerswillusuallyactintheshareholders interests Theshareholderscandevisecontractsthataligntheincentivesofthemanagerswiththegoalsoftheshareholders Theshareholderscanmonitorthemanagersbehavior Thiscontractingandmonitoringiscostly 1 20 ManagerialGoals ManagerialgoalsmaybedifferentfromshareholdergoalsExpensiveperquisitesSurvivalIndependenceIncreasedgrowthandsizearenotnecessarilythesamethingasincreasedshareholderwealth 1 21 SeparationofOwnershipandControl BoardofDirectors Management Assets Debt Equity Shareholders Debtholders 1 22 DoShareholdersControlManagerialBehavior Shareholdersvotefortheboardofdirectors whointurnhirethemanagementteam Contractscanbecarefullyconstructedtobeincentivecompatible Thereisamarketformanagerialtalent thismayprovidemarketdisciplinetothemanagers theycanbereplaced Ifthemanagersfailtomaximizeshareprice theymaybereplacedinahostiletakeover 1 23 1 5FinancialMarkets PrimaryMarketWhenacorporationissuessecurities cashflowsfrominvestorstothefirm UsuallyanunderwriterisinvolvedSecondaryMarketsInvolvethesaleof used securitiesfromoneinvestortoanother Securitiesmaybeexchangetradedortradeover the counterinadealermarket 1 24 FinancialMarkets Firms Investors Sue Bob 1 25 ExchangeTradingofListedStocks Auctionmarketsaredifferentfromdealermarketsintwoways Tradinginagivenauctionexchangetakesplaceatasinglesiteontheflooroftheexchange Transactionpricesofsharesarecommun