武汉大学公司金融课件(十一)

Premium BondsIf the market rate of interest for a similar bond were only 3.75%, what would you be prepared to pay for the bond in question?SEMIANNUAL COUPONS♦M ost bonds have semiannual interest payments. In our example, there would have been a $30 coupon every six months. ♦B ond yields are quoted as APRs (annual percentage rates). With a quoted yield of 6% and semiannual payments, the true yield is 3% per 6 months.Example: What is the value of a $1,000 bond with a 6% coupon rate and semiannual payments, if the current market rate of interest were 6%?PV bond = 30 * PVIFA3%,20 + 1,000 * PVIF 3%,20= 30 * 1 – 1/(1.03)20+ 1,000 * 1/(1.03)20.03= ( 30 * 14.87747) + (1,000 * .55368) PV bond = 446.32 + 553.68 = 1,000 FINDING YIELD TO MATURITY▪Example, a broker will offer to sell you a 15-year bond, with a 7.2% coupon, for $1,126.▪To decide whether or not you wish to buy the bond, you must calculate the yield to maturity.▪Whether or not you would buy, depends upon the rates available elsewhere. ANNUAL vs SEMIANNUAL COUPONS ANNUALPV bond = 60*( 1 – 1/(1.06)10) +1,000 * 1/(1.06)10.06= ( 60 * 7.3601) + (1,000 * .55839) PV bond= 441.61 + 558.39 = $1,000 SEMIANNUALPV bond = 30 * PVIFA3%,20 + 1,000 * PVIF 3%,20 = 30 * 1 – 1/(1.03)20+ 1,000 * 1/(1.03)20 .03= ( 30 * 14.87747) + (1,000 * .55368) PV bond = 446.32 + 553.68 = 1,000WHY?BOND RISKT here is a general misconception that bonds are secure and riskless investments.T ypes of risks:▪Interest-rate risk∙If interest rates rise, the value ofa bond can fall greatly.▪Default risk∙If a company or developingcountry cannot pay either theinterest or the principal at thematurity date, the value of thebond can even fall to zero.▪Liquidity Risk∙Some bond issues, particularlyfor corporations or provincialgovernments, are relativelysmall---perhaps only $50 or$100 million. As a result, theremay be relatively few of thebonds traded over any period.Consequently, if you ownedsuch bonds and wished to sell, avery “thin” market may requirethe bonds to be sold at adiscount relative to othersimilar bond issues that trademore. The potential that theywould sell at a discount is anadded risk.Currency riskWhile we won’t discusscurrency issues to any extent, abond denominated in anothercurrency may have its value falldramatically with a devaluationof that currency.INTEREST RATE RISKExample: Long-term BondYou own a 30-year bond with a 10% coupon paid annually.If the current market interest rate for such a bond is 10%, its value is:PV = 100 * PVIFA10%,30 + 1,000 *PVIF10%,30PV = 942.69 + 57.31 = 1,000If the current market interest rate rose dramatically to 15%. What’s the value of the bond now?The PV of the bond has fallen by 32.8%. Example: Short-term BondYou own a 1-year bond with a 10% coupon paid annually.If the current market interest rate for such a bond is 10%, its value is:PV = 100/1.1 + 1,000/1.1PV = 90.91 + 909.09 = 1,000Suppose the current market interest rate for a similar bond rose dramatically to 15%. What’s the value of the bond now?The PV of the short-term bond has fallen by 4.5%.T hat’s a much lower level of interest rate risk than with the longer-term bond. Example: Low Coupon BondYou own a 20-year bond with a 6% coupon paid annually.bond is 10%, its value is:PV = 60 * PVIFA10%,20 + 1,000 * PVIF10%,20 PV = 510.81 + 148.64 = 659.45Suppose the current market interest rate for a similar bond rose dramatically to 15%. The value of the bond has fallen by over 33.8%. Example: High Coupon BondYou own a 20-year bond with a 12% coupon paid annually.If the current market interest rate for such a bond is 10%, its value is:PV = 120 * PVIFA10%,20 + 1,000 * PVIF10%,20 PV = 1,021.63 + 148.64 = 1,170.27a similar bond rose dramatically to 15%. The value of the bond has fallen by 30.6%.A lower level of interest rate risk than with the low coupon bond.What influences the level of interest rate risk? If you believe that interest rates will rise over the next year and you want to reduce your interest rate risk, what types of bonds would you prefer to hold?DEFAULT RISK▪Bond rating agencies throughout the world analyze and rate all bonds, both government and corporate.▪The ratings assess how likely the issuer is to default and the protection that creditors have in the event of default.▪In the North American context, the relevant agencies are Moody’s, Standard and Poors,▪BOND RATINGS ONLY EVALUATE THE POSSIBILITY OF DEFAULT.RETURN ON A BONDTerms considered to this point.Coupon rate:▪The annual interest as a percentageof face value.Yield to Maturity:▪The discount rate that equates abond’s present value of interestpayments and principal repaymentwith its price.▪(Note: if the yield to maturity isn’tequal to the yield for a comparablebond, an arbitrage opportunityexists).RETURN ON A BONDSuppose you buy a bond, hold it for a year, and then sell. What is the return on your investment?Total = Interest + Change Return Earned in Value ExampleBUY: a 10-year, 7% coupon bond for $1,000.( Since the bond sells at par, we knowthe yield to maturity is 7%).SELL: 1-year later, when the yield tomaturity is 6%.What is the price that you could get in the bond market and what was your nominal ( as opposed to real) return on the bond?REAL VS NOMINAL RATES OF INTEREST▪If prices rise over time, the purchasing power of a dollar falls.▪With a 7% interest rate. A $1,000 bond will have a value of $1,070 after 1 year (if interest rates do not change).▪7% in this case is the:NOMINAL INTEREST RATE:R ate at which money invested grows,without adjusting for the rate ofinflation.▪If there were 5% inflation over the same year, the $1,070 nominal cash flow would not buy 7% more goods and services, since the price of those goods and services would be 5% higher.▪After we adjust for inflation, we could buy only 1.905% more.REAL INTEREST RATER ate at which the purchasing powerof an investment increases. FISHER EFFECTReal Interest = Nominal Interest Rate Rate Inflation RateORNominal = Real Interest * Inflation Interest Rate Rate Rate ( 1 + R ) = ( 1 + r ) ( 1 + h )In our example:1.07 = (1.01905 ) ( 1.05)Not that complicated: the important rule is to be consistent---don’t mix up real and nominal rates.Example:-nominal rate = 8%-real rate = 1.08/1.06 = 1.01887-inflation rate = 6%-bond value = $1,000Find real cash flow?More than one period:The Fisher Effect can be used for more than one period.( 1 + R )t = ( 1 + r )t * ( 1 + h )tExample:▪Suppose we expect the nominal rate and the inflation rate to be 8% and 6% for the next 8 years.▪What will be the real rate of return over the 8 years and what is the annualized rate? CURRENT YIELDC urrent Yield = Coupon ValueMarket Price of Bond Summary: Terms to understandC oupon ValueY ield to MaturityR eturn on a BondC urrent Yield。

COST OF CAPITAL:CAPITAL STRUCTURE:T HE MIX OF DEBT ANDEQUITY MAINTAINED BY THEFIRM.▪How much should the firmborrow? Since the debt equitymixture will affect both the riskand the value of the firm, what isthe best mix?▪What are the least expensivesources of funds for the firm?To understand and analyze the cost of capital for the firm, then, we must first determine the cost of equity capital and the cost of debt capital for the firm.A. COST OF EQUITY CAPITALBoth the Dividend Pricing Model and the Capital Asset Pricing Model have significant problems and require substantial information. Despite its weaknesses, the CAPM offers guidance is many more circumspect.CAPMUsing the Security Market Line (SML), the expected return on the firm’s e quity is given by:E(R) = R f+ ( R m– R f )Dividend Growth ModelIn some cases, where the firm has a long and relatively stable record of earnings and dividends, the Dividend Pricing Model can serve as an effective means of determining the cost of capital.P0 = D1 _R E– gR E = D1/P0 + gB.COST OF PREFERRED STOCKP0 = DR preferredR preferred = DP0C.COST OF LONG-TERM DEBTIf the firm already has bonds outstanding, then the yield to maturity on those bonds is the market-required rate for the firm’s new long-term debt.Note, one must take into account the term to maturity of the outstanding bonds and the new issue; one would not easily compare a 1-year bond to a 30 year bond.Be very careful, however, not to confuse the yield to maturity of the firm's bonds with the coupon rate on the bond.ASSUMPTION: OPTIMUM CAPITAL STRUCTUREAnalysts typically focus on the firm’s total capitalization, which is the sum of thelong-term debt and the equity. For our examples, we will include only long-term debt and equity in the form of common shares. Adding preferred shares as a 3rd type of capital would be simple enough.Notation:V – combined market value of thedebt and equity.E –market value of the firm’sequity.D –market value of the firm’sdebt.V = E + D100% = E/V + D/VThese percentages are referred to as theCapital Structure Weights.MARKET VERSUS BOOK WEIGHTSThe firm’s cost of capital must be based on what investors are actually willing to pay for the firm’s securities—that is, the market value of the securities, not the book value as reported in financial statements.Debt:▪The book value of debt is its value atmaturity (the principal payment).▪The market value of debt is the presentvalue of the interest and principal at theprevailing interest rates.▪If the prevailing interest rates change,the book value of the debt does notchange but the market value (whatinvestors are willing to pay) will change. Common Stock▪The difference between market andbook for common stock can be so largeas to entirely distort any capital stockcalculation.Book Value Share Capital $ 537 millionRetained Earnings 1,421Total $1,958 millionMarket Value 222 million sharesprice Apr 10, 2001….$42.10= $ 9,346 millionUNADJUSTED WEIGHTED AVERAGE COST OF CAPITALDebt holders need income of:R debt X DEquity investors need income of:R equity X ESo, the return on all assets, or the unadjusted cost of capital to the firm, will be:UnadjustedCost of = R assets = (R debt X D) + (R equity X E)CapitalR assets = (R debt X D/V ) + (R equity X E/V)TAXES AND THE WEIGHTED AVERAGE COST OF CAPITAL(R debt)(1- T c) X DThe WEIGHTED AVERAGE COST OF CAPITAL (WACC) to the firm, then, is given by:WACC = (D/V) (R D)(1- T c) + (E/V)(R E) EXAMPLE: WACCCorner Lot Inc. has issued 3 types of securities: long-term debt, preferred shares, and common stock.The debt has a market value of $14 million.(D = $14). Debt owners expect a return of6.5%.The preferred shares have a market value of $4 million. (P = $4). The preferred shareholders expect a return of 10%. Dividends on preferred shares are not tax deductible.The market value of the shareholders equity is $36 million. (E = $36). Common stock holders expect a return of 15%. Corner Lot has a marginal corporate tax rate of 25%.What is Corner Lot Inc.’s Weighted Average Cost of Capital?FLOTATION COSTSf E = the equity flotation cost as a %f D = the debt flotation cost as a %f A = the weighted average flotationcost as a %.f A = (E/V)(f E) + (D/V)(f D)▪It is tempting to think that the flotation cost added on to the capital cost of the project ought to be the actual flotation cost depending on what type of capital is being raised. It would obviously be the case that the flotation cost would be higher if the firm had chosen, in this particular instance, to raise equity capital.▪We need to remember that the firm will ultimately move back to its optimal capitalstructure. The type of capital that is being raised at that moment should not distort the acceptability of a particular capital project being evaluated by the NPV approach. It makes no sense to reject more projects just because the firm needs to raise equity in order to get the capital structure back to the optimal level.FINANCING WITH RETAINED EARNINGS▪The only difference is that the use of retained earnings avoids the flotation costs associated with new stock issues.▪In our earlier example, with a weighted average flotation cost of 6.8%, if the firm typically funded one-half of its capital projects from retained earnings (which have zero flotation costs) it would be important to adjust the weighted average to 3.4%.DIVISIONAL AND PROJECT COST OF CAPITALP ure Play ApproachS ubjective Approach。

武汉大学金融专硕考研重点公司理财基本知识点：V=B+S(V alue=bond+stock)A=B+S(Asset=bond+stock)(1)CF(A)=CF(B)+CF(S)CF(B)为向债权人支付的现金流，债务清偿，利息+到期本金-长期债券融资如果钱流向了债权人那么为加，如果钱从债权人流出那么为减。

CF(S)为向股东支付的现金流，股利-股权净值如果钱流向了股东那么为加，如果钱从股东流出那么为减。

(2)CF(A)=经营性现金流量OCF-(净)资本性支出-净营运资本的增加CF(A)，企业现金流总额，自由现金流量，或企业的总现金流量经营性现金流量OCF=EBIT+折旧-税(净)资本性支出=固定资产的取得-固定资产的出售=期末固定资产净额-期初固定资产净额+折旧，(其中，“期末固定资产净额-期初固定资产净额”即为固定资产增加净额)1.流动性是非题：所有的资产在付出某种代价的情况下都具有流动性。

请解释。

解：正确;所有的资产都可以以某种价格转换为现金。

2.会计与现金流量为什么标准的利润表上列示的收入和成本不代表当期实际的现金流入和现金流出?解：按公认会计原则中配比准则的要求，收入应与费用相配比，这样，在收入发生或应计的时候，即使没有现金流量，也要在利润表上报告。

注意，这种方式是不正确的，但是会计必须这么做。

3.会计现金流量表在会计现金流量表上，最后一栏表示什么?这个数字对于分析一家公司有何用处?解：现金流量表最后一栏数字表明了现金流量的变化。

这个数字对于分析一家公司并没有太大的作用。

4.现金流量财务现金流量与会计现金流量有何不同?哪个对于公司分析者更有用?解：两种现金流量主要的区别在于利息费用的处理。

会计现金流量将利息作为营运现金流量(会计现金流量的逻辑是，利息在利润表的营运阶段出现，因此利息是营运现金流量)，而财务现金流量将利息作为财务现金流量。

事实上，利息是财务费用，这是公司对负债和权益的选择的结果。

RAISING CAPITAL & LEASINGVenture capital firmsIPOClear Water Inc. has 1 million shares outstanding, selling at $20 per share.To finance the development of a new well, Clear Water plans a rights issue, allowing 1 new share to be purchased for each 10 shares currently held.The purchase price will be $10 per share.1.How much money will be raised?2.What will the stock price be after the rights issue?3.What is the value of 1 right?4.Show the impacts on 2 shareholders, each with 50,000 shares: Jack exercises his rights and Jill sells her rights.LEASING▪Discuss the different types of leases;➢O perating leases.➢F inancial leases.▪Focus on the evaluation of financial leases by:➢I dentifying the relevantincremental cash flows; and,➢U sing discounted cash flowanalysis to compare the valueadded to the firm by leasing ascompared to buying.TYPES OF LEASESA LEASE is a rental agreement that extends for a year or more and involves a series of fixed payments.Our focus will be on leasing by firms as an alternative to buying capital equipment.The LESSEE is the user of the asset who makes periodic payments to the LESSOR, who is the owner of the assets.There are 2 principal types of leases:An OPERATING LEASE is usually a shorter-term lease where the lessor is responsible for insurance, taxes andmaintenance. Operating leases can typically be cancelled on short notice.Because the lessor can cancel on short notice, the lessor assumes the risk of obsolescence and the risk that the asset cannot be leased to another lessee. This risk will have to be reflected in comparatively high lease charges, particularly for specialty assets or those facing rapid technological change.A FINANCIAL LEASE is a longer-term lease that is differentiated from an operating lease by 3 essential characteristics:▪They are fully amortized in a manner that allows the lessor, the owner, to recover the full cost of the asset plus a competitive rate of return during the period of the lease.▪The contractual commitment cannot be cancelled prior to its expiration without considerable penalty.▪The cost of insurance, repairs, and maintenance normally rest with the lessee, just as they would if they owned the asset.Financial leases are an alternative source of financing.▪An immediate cash inflow▪The lessee assumes a bindingobligation to make the paymentsspecified in the lease contract.▪The firm could have borrowedand buy.In effect, the cash flowconsequences are the same.•On purely financial terms,which approach,borrowing/buying or leasingwill add greater value to the firm acquiring an asset?•If the lessee benefits from leasing as compared with buying, why will the lessor be prepared to make the deal? A deal will likely be struck only if the arrangement is not a zero sum game. What is the source of the incremental value so that both parties to a lease can have a positive NPV from the transaction?EVALUATING FINANCIAL LEASES Relevant Cash Flows▪The avoidance of the initial capital outlay can be seen as a positive cash inflow to the firm.▪In return for this benefit➢D irect cash outflows associatedwith the lease contract:i.The periodic lease payments;minusii.The tax savings that resultfrom the lease payments beinga tax-deductible expense.➢I ndirect or opportunity costs :a)The tax shield from thecapital cost allowances thatthe lessee loses by opting tolease rather than to own.plusb)Any net benefits derivedfrom the asset’s residualvalue at the end of the leaseperiod. Since the lessor willnow benefit from any residualvalue, this must be recognizedas a cost of leasing.Discount RateLeasing should be viewed as a substitute for debt.If the firm would have to pay an interest rate of “r” on its loans, then it’s after-tax interest rate would be r *(1-t).Be CarefulOne needs to consider the process carefully, since the nature of theanalysis turns the signs around by comparison with a typical Net Present Value evaluation.Typically, one makes a capital investment (a cash outlay) which generates a positive incremental cash flow. We use our discounting methods to determine whether or not the positive cash flows are sufficiently large to warrant the initial investment.With the analysis of a lease, we might avoid the initial capital investment by accepting a negative incremental cash flow. We are asking whether or not the present value of the negative cashflow created by a lease contract is smaller than the cash savings by avoiding the purchase.A small but developing engineering firm is considering the acquisition of a new mini-tractor for preparing soil samples. The purchase price would be $13,500. The tractor is classified as excavation equipment and would be depreciated straight-line to zero over its 5-year life and there would be no salvage value. The firm’s marginal tax rate is 25%. The firm is aware that a bank loan to pay for the tractor would have an interest rate of 12%. The manufacturer of the tractor hasoffered to lease the tractor. The 5-year lease contract calls for annual lease payments of $ 3,733 to be made at the end of each year.Should the firm borrow from the bank and purchase the tractor or should it enter into the 5-year leasing agreement?1)Tax benefitsOn a purely financial basis, thereneeds to be some marketimperfection such as a tax ratedifferential to create a non-zerosum game. In that way, both thelessee and the lessor can achieve apositive present value from a leasearrangement.2)Reduction ofuncertainty/obsolescenceA common reason given for leasingis that it reduces the uncertainty on the part of the lessee about thefuture value of the asset.Transferring the uncertainty to thelessor makes sense, especiallywhere the lessor is themanufacturer, because they willhave a far broader understandingof the asset and its potentialobsolescence.3)Ready availability of creditFirms with a weak credit ratingsometimes find they can obtain100% financing through a leaseeven though they would only beable to receive partial financingthrough a bank loan. It may be thata lessor will provide greaterfinancing than a bank because they hold a more secure position in theevent of default.4)Payment provisionsMore loans than leases are basedon variable interest rates. Ifpayments on a loan are variable,while lease payments are fixed, the borrowing alternative contains anadditional element of uncertainty,and this may provide an incentiveto lease.5)Incentives for manufacturers.The terms of a lease offered by amanufacturer may not only bedictated by financial considerations but also by marketing or otherobjectives. As a consequence, thefinancing terms offered under a lease may be more attractive than could be obtained under a comparable loan.。