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

CHAPTER,1,IntroductiontoCorporateFinance,1-1,ChapterOutline,1.1WhatisCorporateFinance?1.2CorporateSecuritiesasContingentClaimsonTotalFirmValue1.3TheCorporateFirm1.4GoalsoftheCorporateFirm1.5FinancialMarkets1.6OutlineoftheText,1-2,WhatisCorporateFinance?,CorporateFinanceaddressesthefollowingthreequestions:Whatlong-terminvestmentsshouldthefirmengagein?Howcanthefirmraisethemoneyfortherequiredinvestments?Howmuchshort-termcashflowdoesacompanyneedtopayitsbills?,1-3,TheBalance-SheetModeloftheFirm,1-4,TheBalance-SheetModeloftheFirm,CurrentAssets,FixedAssets1Tangible2Intangible,ShareholdersEquity,CurrentLiabilities,Long-TermDebt,Whatlong-terminvestmentsshouldthefirmengagein?,TheCapitalBudgetingDecision,1-5,TheBalance-SheetModeloftheFirm,Howcanthefirmraisethemoneyfortherequiredinvestments?,TheCapitalStructureDecision,CurrentAssets,FixedAssets1Tangible2Intangible,ShareholdersEquity,CurrentLiabilities,Long-TermDebt,1-6,TheBalance-SheetModeloftheFirm,Howmuchshort-termcashflowdoesacompanyneedtopayitsbills?,TheNetWorkingCapitalInvestmentDecision,NetWorkingCapital,ShareholdersEquity,CurrentLiabilities,CurrentAssets,FixedAssets1Tangible2Intangible,Long-TermDebt,1-7,CapitalStructure,Thevalueofthefirmcanbethoughtofasapie.,Thegoalofthemanageristoincreasethesizeofthepie.,TheCapitalStructuredecisioncanbeviewedashowbesttosliceupathepie.,Ifhowyouslicethepieaffectsthesizeofthepie,thenthecapitalstructuredecisionmatters.,50%Debt,50%Equity,1-8,HypotheticalOrganizationChart,1-9,TheFinancialManager,Tocreatevalue,thefinancialmanagershould:Trytomakesmartinvestmentdecisions.Trytomakesmartfinancingdecisions.,1-10,Cashflowfromfirm(C),TheFirmandtheFinancialMarkets,Taxes(D),Firmissuessecurities(A),Retainedcashflows(F),Investsinassets(B),Dividendsanddebtpayments(E),CurrentassetsFixedassets,Short-termdebtLong-termdebtEquityshares,Ultimately,thefirmmustbeacashgeneratingactivity.,Thecashflowsfromthefirmmustexceedthecashflowsfromthefinancialmarkets.,1-11,1.2CorporateSecuritiesasContingentClaimsonTotalFirmValue,Thebasicfeatureofadebtisthatitisapromisebytheborrowingfirmtorepayafixeddollaramountofbyacertaindate.Theshareholdersclaimonfirmvalueistheresidualamountthatremainsafterthedebtholdersarepaid.Ifthevalueofthefirmislessthantheamountpromisedtothedebtholders,theshareholdersgetnothing.,1-12,DebtandEquityasContingentClaims,$F,Debtholdersarepromised$F.,Ifthevalueofthefirmislessthan$F,theygetthewhateverthefirmifworth.,Ifthevalueofthefirmismorethan$F,debtholdersgetamaximumof$F.,Ifthevalueofthefirmislessthan$F,shareholdersgetnothing.,Ifthevalueofthefirmismorethan$F,shareholdersgeteverythingabove$F.,Algebraically,thebondholdersclaimis:Min$F,$X,Algebraically,theshareholdersclaimis:Max0,$X$F,1-13,$F,Debtholdersarepromised$F.,Ifthevalueofthefirmislessthan$F,theshareholdersclaimis:Max0,$X$F=$0andthedebtholdersclaimisMin$F,$X=$X.Thesumoftheseis=$X,Ifthevalueofthefirmismorethan$F,theshareholdersclaimis:Max0,$X$F=$X$Fandthedebtholdersclaimis:Min$F,$X=$F.Thesumoftheseis=$X,CombinedPayoffstoDebtandEquity,1-14,1.3TheCorporateFirm,Thecorporateformofbusinessisthestandardmethodforsolvingtheproblemsencounteredinraisinglargeamountsofcash.However,businessescantakeotherforms.,1-15,FormsofBusinessOrganization,TheSoleProprietorshipThePartnershipGeneralPartnershipLimitedPartnershipTheCorporationAdvantagesandDisadvantagesLiquidityandMarketabilityofOwnershipControlLiabilityContinuityofExistenceTaxConsiderations,1-16,AComparisonofPartnershipandCorporations,1-17,1.4GoalsoftheCorporateFirm,Thetraditionalansweristhatthemanagersofthecorporationareobligedtomakeeffortstomaximizeshareholderwealth.,1-18,TheSet-of-ContractsPerspective,Thefirmcanbeviewedasasetofcontracts.Oneofthesecontractsisbetweenshareholdersandmanagers.Themanagerswillusuallyactintheshareholdersinterests.Theshareholderscandevisecontractsthataligntheincentivesofthemanagerswiththegoalsoftheshareholders.Theshareholderscanmonitorthemanagersbehavior.Thiscontractingandmonitoringiscostly.,1-19,ManagerialGoals,ManagerialgoalsmaybedifferentfromshareholdergoalsExpensiveperquisitesSurvivalIndependenceIncreasedgrowthandsizearenotnecessarilythesamethingasincreasedshareholderwealth.,1-20,SeparationofOwnershipandControl,BoardofDirectors,Management,Assets,Debt,Equity,Shareholders,Debtholders,1-21,DoShareholdersControlManagerialBehavior?,Shareholdersvotefortheboardofdirectors,whointurnhirethemanagementteam.Contractscanbecarefullyconstructedtobeincentivecompatible.Thereisamarketformanagerialtalentthismayprovidemarketdisciplinetothemanagerstheycanbereplaced.Ifthemanagersfailtomaximizeshareprice,theymaybereplacedinahostiletakeover.,1-22,1.5FinancialMarkets,PrimaryMarketWhenacorporationissuessecurities,cashflowsfrominvestorstothefirm.UsuallyanunderwriterisinvolvedSecondaryMarketsInvolvethesaleof“used”securitiesfromoneinvestortoanother.Securitiesmaybeexchangetradedortradeover-the-counterinadealermarket.,1-23,FinancialMarkets,Firms,Investors,Sue,Bob,1-24,ExchangeTradingofListedStocks,Auctionmarketsaredifferentfromdealermarketsintwoways:Tradinginagivenauctionexchangetakesplaceatasinglesiteontheflooroftheexchange.Transactionpricesofsharesarecommunicatedalmostim