公司理财原英文版（全集）罗斯（RossSA）威斯特菲尔德（WesterfieldRW）

1、,Corporate Finance Ross Westerfield Jaffe,Sixth Edition,Chapter Outline,1.1 What is Corporate Finance? 1.2 Corporate Securities as Contingent Claims on Total Firm Value 1.3 The Corporate Firm 1.4 Goals of the Corporate Firm 1.5 Financial Markets 1.6 Outline of the Text,What is Corporate Finance?,Cor

2、porate Finance addresses the following three questions: What long-term investments should the firm engage in? How can the firm raise the money for the required investments? How much short-term cash flow does a company need to pay its bills?,The Balance-Sheet Model of the Firm,The Balance-Sheet Model

3、 of the Firm,Current Assets,Fixed Assets 1 Tangible 2 Intangible,Shareholders Equity,Current Liabilities,Long-Term Debt,What long-term investments should the firm engage in?,The Capital Budgeting Decision,The Balance-Sheet Model of the Firm,How can the firm raise the money for the required investmen

4、ts?,The Capital Structure Decision,Current Assets,Fixed Assets 1 Tangible 2 Intangible,Shareholders Equity,Current Liabilities,Long-Term Debt,The Balance-Sheet Model of the Firm,How much short-term cash flow does a company need to pay its bills?,The Net Working Capital Investment Decision,Net Workin

5、g Capital,Shareholders Equity,Current Liabilities,Long-Term Debt,Current Assets,Fixed Assets 1 Tangible 2 Intangible,Capital Structure,The value of the firm can be thought of as a pie.,The goal of the manager is to increase the size of the pie.,The Capital Structure decision can be viewed as how bes

6、t to slice up a the pie.,If how you slice the pie affects the size of the pie, then the capital structure decision matters.,50% Debt,50% Equity,Hypothetical Organization Chart,The Financial Manager,To create value, the financial manager should: Try to make smart investment decisions. Try to make sma

7、rt financing decisions.,Cash flowfrom firm (C),The Firm and the Financial Markets,Taxes (D),Firm issues securities (A),Retained cash flows (F),Investsin assets(B),Dividends anddebt payments (E),Current assetsFixed assets,Short-term debt Long-term debt Equity shares,Ultimately, the firm must be a cas

8、h generating activity.,The cash flows from the firm must exceed the cash flows from the financial markets.,1.2 Corporate Securities as Contingent Claims on Total Firm Value,The basic feature of a debt is that it is a promise by the borrowing firm to repay a fixed dollar amount of by a certain date.

9、The shareholders claim on firm value is the residual amount that remains after the debtholders are paid. If the value of the firm is less than the amount promised to the debtholders, the shareholders get nothing.,Debt and Equity as Contingent Claims,$F,Debt holders are promised $F.,If the value of t

10、he firm is less than $F, they get the whatever the firm if worth.,If the value of the firm is more than $F, debt holders get a maximum of $F.,If the value of the firm is less than $F, share holders get nothing.,If the value of the firm is more than $F, share holders get everything above $F.,Algebrai

11、cally, the bondholders claim is: Min$F,$X,Algebraically, the shareholders claim is: Max0,$X $F,Combined Payoffs to Debt and Equity,$F,Debt holders are promised $F.,If the value of the firm is less than $F, the shareholders claim is: Max0,$X $F = $0 and the debt holders claim is Min$F,$X = $X. The su

12、m of these is = $X,If the value of the firm is more than $F, the shareholders claim is: Max0,$X $F = $X $F and the debt holders claim is: Min$F,$X = $F. The sum of these is = $X,1.3 The Corporate Firm,The corporate form of business is the standard method for solving the problems encountered in raisi

13、ng large amounts of cash. However, businesses can take other forms.,Forms of Business Organization,The Sole Proprietorship The Partnership General Partnership Limited Partnership The Corporation Advantages and Disadvantages Liquidity and Marketability of Ownership Control Liability Continuity of Exi

14、stence Tax Considerations,A Comparison of Partnership and Corporations,1.4 Goals of the Corporate Firm,The traditional answer is that the managers of the corporation are obliged to make efforts to maximize shareholder wealth.,The Set-of-Contracts Perspective,The firm can be viewed as a set of contra

15、cts. One of these contracts is between shareholders and managers. The managers will usually act in the shareholders interests. The shareholders can devise contracts that align the incentives of the managers with the goals of the shareholders. The shareholders can monitor the managers behavior. This

16、contracting and monitoring is costly.,Managerial Goals,Managerial goals may be different from shareholder goals Expensive perquisites Survival Independence Increased growth and size are not necessarily the same thing as increased shareholder wealth.,Separation of Ownership and Control,Board of Direc

17、tors,Management,Assets,Debt,Equity,Shareholders,Debtholders,Do Shareholders Control Managerial Behavior?,Shareholders vote for the board of directors, who in turn hire the management team. Contracts can be carefully constructed to be incentive compatible. There is a market for managerial talentthis

18、may provide market discipline to the managersthey can be replaced. If the managers fail to maximize share price, they may be replaced in a hostile takeover.,1.5 Financial Markets,Primary Market When a corporation issues securities, cash flows from investors to the firm. Usually an underwriter is inv

19、olved Secondary Markets Involve the sale of “used” securities from one investor to another. Securities may be exchange traded or trade over-the-counter in a dealer market.,Financial Markets,Firms,Investors,Sue,Bob,1.6 Outline of the Text,Overview Value and Capital Budgeting Risk Capital Structure an

20、d Dividend Policy Long-Term Financing Options, Futures and Corporate Finance Financial Planning and Short-Term Finance Special Topics,Corporate Finance Ross Westerfield Jaffe,Sixth Edition,Chapter Outline,2.1 The Balance Sheet 2.2 The Income Statement 2.3 Net Working Capital 2.4 Financial Cash Flow

21、2.5 Summary and Conclusions,Sources of Information,Annual reports Wall Street Journal Internet NYSE () Nasdaq () Text ( SEC EDGAR 10K invest the remaining $55,000; consume $60,000 next year.,Intertemporal Consumption Opportunity Set,$0,$20,000,$40,000,$60,000,$80,000,$100,000,$120,000,$0,$20,000,$40

22、,000,$60,000,$80,000,$100,000,$120,000,Consumption today,Consumption at t+1,Another choice available is to consume $60,000 now; invest the remaining $35,000; consume $38,500 next year.,Taking Advantage of Our Opportunities,$0,$20,000,$40,000,$60,000,$80,000,$100,000,$120,000,$0,$20,000,$40,000,$60,0

23、00,$80,000,$100,000,$120,000,Consumption today,Consumption at t+1,A persons preferences will tend to decide where on the opportunity set they will choose to be.,Changing Our Opportunities,$0,$20,000,$40,000,$60,000,$80,000,$100,000,$120,000,$0,$20,000,$40,000,$60,000,$80,000,$100,000,$120,000,Consum

24、ption today,Consumption at t+1,A rise in interest rates will make saving more attractive ,and borrowing less attractive.,Consider an investor who has chosen to consume $40,000 now and to consume $60,000 next year.,3.3 The Competitive Market,In a competitive market: Trading is costless. Information a

25、bout borrowing and lending is available There are many traders; no individual can move market prices. There can be only one equilibrium interest rate in a competitive marketotherwise arbitrage opportunities would arise.,3.4 The Basic Principle,The basic financial principle of investment decision mak

26、ing is this: An investment must be at least as desirable as the opportunities available in the financial markets.,3.5 Practicing the Principle: A Lending Example,Consider an investment opportunity that costs $50,000 this year an provides a certain cash flow of $54,000 next year.,Is this a good deal?

27、 It depends on the interest rate available in the financial markets. The investment has an 8% return, if the interest rate available elsewhere is less than this, invest here.,3.6 Illustrating the Investment Decision,Consider an investor who has an initial endowment of income of $40,000 this year and

28、 $55,000 next year. Suppose that he faces a 10-percent interest rate and is offered the following investment.,3.6 Illustrating the Investment Decision,$0,Consumption today,Our investor begins with the following opportunity set: endowment of $40,000 today, $55,000 next year and a 10% interest rate.,O

29、ne choice available is to consume $15,000 now; invest the remaining $25,000 in the financial markets at 10%; consume $82,500 next year.,$0,$99,000,Consumption at t+1,$90,000,3.6 Illustrating the Investment Decision,$0,Consumption today,A better alternative would be to invest in the project instead o

30、f the financial markets.,He could consume $15,000 now; invest the remaining $25,000 in the project at 20%; consume $85,000 next year.,$0,$99,000,Consumption at t+1,$90,000,3.6 Illustrating the Investment Decision,$0,Consumption today,Note that we are better off in that we can command more consumptio

31、n today or next year.,$0,$99,000,Consumption at t+1,$101,500,$101,500 = $15,000(1.10) + $85,000,$92,273 = $15,000 + $85,000(1.10),$90,000,$92,273,Net Present Value,We can calculate how much better off in todays dollar the investment makes us by calculating the Net Present Value:.,3.7 Corporate Inves

32、tment DecisionMaking,Shareholders will be united in their preference for the firm to undertake positive net present value decisions, regardless of their personal intertemporal consumption preferences.,Corporate Investment DecisionMaking,Consumption today,Consumption at t+1,Positive NPV projects shif

33、t the shareholders opportunity set out, which is unambiguously good.,All shareholders agree on their preference for positive NPV projects, whether they are borrowers or lenders.,3.7 Corporate Investment DecisionMaking,In reality, shareholders do not vote on every investment decision faced by a firm

34、and the managers of firms need decision rules to operate by. All shareholders of a firm will be made better off if managers follow the NPV ruleundertake positive NPV projects and reject negative NPV projects.,The Separation Theorem,The separation theorem in financial markets says that all investors

35、will want to accept or reject the same investment projects by using the NPV rule, regardless of their personal preferences. Logistically, separating investment decision making from the shareholders is a basic requirement of the modern corporation.,3.8 Summary and Conclusions,Financial markets exist

36、because people want to adjust their consumption over time. They do this by borrowing or lending. An investment should be rejected if a superior alternative exists in the financial markets. If no superior alternative exists in the financial markets, an investment has a positive net present value.,Cor

37、porate Finance Ross Westerfield Jaffe,Sixth Edition,Chapter Outline,4.1 The One-Period Case 4.2 The Multiperiod Case 4.3 Compounding Periods 4.4 Simplifications 4.5 What Is a Firm Worth? 4.6 Summary and Conclusions,4.1 The One-Period Case: Future Value,If you were to invest $10,000 at 5-percent inte

38、rest for one year, your investment would grow to $10,500 $500 would be interest ($10,000 .05) $10,000 is the principal repayment ($10,000 1) $10,500 is the total due. It can be calculated as: $10,500 = $10,000(1.05). The total amount due at the end of the investment is call the Future Value (FV).,4.

39、1 The One-Period Case: Future Value,In the one-period case, the formula for FV can be written as: FV = C1(1 + r) Where C1 is cash flow at date 1 and r is the appropriate interest rate.,4.1 The One-Period Case: Present Value,If you were to be promised $10,000 due in one year when interest rates are a

40、t 5-percent, your investment be worth $9,523.81 in todays dollars.,The amount that a borrower would need to set aside today to to able to meet the promised payment of $10,000 in one year is call the Present Value (PV) of $10,000.,Note that $10,000 = $9,523.81(1.05).,4.1 The One-Period Case: Present

41、Value,In the one-period case, the formula for PV can be written as:,Where C1 is cash flow at date 1 and r is the appropriate interest rate.,4.1 The One-Period Case: Net Present Value,The Net Present Value (NPV) of an investment is the present value of the expected cash flows, less the cost of the in

42、vestment. Suppose an investment that promises to pay $10,000 in one year is offered for sale for $9,500. Your interest rate is 5%. Should you buy?,Yes!,4.1 The One-Period Case: Net Present Value,In the one-period case, the formula for NPV can be written as:,If we had not undertaken the positive NPV

43、project considered on the last slide, and instead invested our $9,500 elsewhere at 5-percent, our FV would be less than the $10,000 the investment promised and we would be unambiguously worse off in FV terms as well: $9,500(1.05) = $9,975 $10,000.,4.2 The Multiperiod Case: Future Value,The general f

44、ormula for the future value of an investment over many periods can be written as: FV = C0(1 + r)T Where C0 is cash flow at date 0, r is the appropriate interest rate, and T is the number of periods over which the cash is invested.,4.2 The Multiperiod Case: Future Value,Suppose that Jay Ritter invest

45、ed in the initial public offering of the Modigliani company. Modigliani pays a current dividend of $1.10, which is expected to grow at 40-percent per year for the next five years. What will the dividend be in five years? FV = C0(1 + r)T $5.92 = $1.10(1.40)5,Future Value and Compounding,Notice that t

46、he dividend in year five, $5.92, is considerably higher than the sum of the original dividend plus five increases of 40-percent on the original $1.10 dividend: $5.92 $1.10 + 5$1.10.40 = $3.30 This is due to compounding.,Future Value and Compounding,Present Value and Compounding,How much would an inv

47、estor have to set aside today in order to have $20,000 five years from now if the current rate is 15%?,$20,000,PV,How Long is the Wait?,If we deposit $5,000 today in an account paying 10%, how long does it take to grow to $10,000?,Assume the total cost of a college education will be $50,000 when you

48、r child enters college in 12 years. You have $5,000 to invest today. What rate of interest must you earn on your investment to cover the cost of your childs education? About 21.15%.,What Rate Is Enough?,4.3 Compounding Periods,Compounding an investment m times a year for T years provides for future

49、value of wealth:,For example, if you invest $50 for 3 years at 12% compounded semi-annually, your investment will grow to,Effective Annual Interest Rates,A reasonable question to ask in the above example is what is the effective annual rate of interest on that investment?,The Effective Annual Intere

50、st Rate (EAR) is the annual rate that would give us the same end-of-investment wealth after 3 years:,Effective Annual Interest Rates (continued),So, investing at 12.36% compounded annually is the same as investing at 12% compounded semiannually.,Continuous Compounding (Advanced),The general formula

51、for the future value of an investment compounded continuously over many periods can be written as: FV = C0erT Where C0 is cash flow at date 0, r is the stated annual interest rate, T is the number of periods over which the cash is invested, and e is a transcendental number approximately equal to 2.7

52、18. ex is a key on your calculator.,4.4 Simplifications,Perpetuity A constant stream of cash flows that lasts forever. Growing perpetuity A stream of cash flows that grows at a constant rate forever. Annuity A stream of constant cash flows that lasts for a fixed number of periods. Growing annuity A

53、stream of cash flows that grows at a constant rate for a fixed number of periods.,Perpetuity,A constant stream of cash flows that lasts forever.,The formula for the present value of a perpetuity is:,Perpetuity: Example,What is the value of a British consol that promises to pay 15 each year, every ye

54、ar until the sun turns into a red giant and burns the planet to a crisp? The interest rate is 10-percent.,Growing Perpetuity,A growing stream of cash flows that lasts forever.,The formula for the present value of a growing perpetuity is:,Growing Perpetuity: Example,The expected dividend next year is

55、 $1.30 and dividends are expected to grow at 5% forever. If the discount rate is 10%, what is the value of this promised dividend stream?,Annuity,A constant stream of cash flows with a fixed maturity.,The formula for the present value of an annuity is:,Annuity: Example,If you can afford a $400 month

56、ly car payment, how much car can you afford if interest rates are 7% on 36-month loans?,Growing Annuity,A growing stream of cash flows with a fixed maturity.,The formula for the present value of a growing annuity:,Growing Annuity,A defined-benefit retirement plan offers to pay $20,000 per year for 4

57、0 years and increase the annual payment by 3-percent each year. What is the present value at retirement if the discount rate is 10-percent?,4.5 What Is a Firm Worth?,Conceptually, a firm should be worth the present value of the firms cash flows. The tricky part is determining the size, timing and ri

58、sk of those cash flows.,4.6 Summary and Conclusions,Two basic concepts, future value and present value are introduced in this chapter. Interest rates are commonly expressed on an annual basis, but semi-annual, quarterly, monthly and even continuously compounded interest rate arrangements exist. The

59、formula for the net present value of an investment that pays $C for N periods is:,4.6 Summary and Conclusions (continued),We presented four simplifying formulae:,How do you get to Carnegie Hall?,Practice, practice, practice. Its easy to watch Olympic gymnasts and convince yourself that you are a leotard purchase away from a triple back flip. Its also easy to watch your finance professor do time value of money problems and convinc