1、2023年1月15日星期日公司理财培训教材公司理财培训教材(PPT 93页页)The big picture Finance Four major topics in Finance(Stephen A.Ross)：lEfficient Market(Fama and French 1972)lReturn and Risk(Portfolio Theory,Markowitz,1952;CAPM,Sharpe,1962)lOption Pricing Theory(Black,Scholes and Merton 1973)lCorporate Finance(ModiglianiMille
2、r Theorem,1958,American Economic Review)Course Description An introductory course provides an overview of corporate finance.It emphasizes an intuitive,logically rigorous understanding of the theory and practice of corporate finance.Topics covered include:valuation theory,corporate risk management,ca
3、pital budgeting,financing decisions and financial market efficiency,dividend policy,etc.Requirements Attendance:An alert,inquisitive presence in each and every class is mandatory.Attendance in seminar sessions is strongly advised but not required.Readings and Assignments:Students will be expected to
4、 read the assigned readings after class.Problem sets will be assigned throughout the course to illustrate and reinforce the concepts presented in class as well as in preparation of the case discussions to follow.Exam:l100%*Final ExamMaterials Textbook:Principles of Corporate Finance,10th Edition,by
5、Richard A.Brealey,Stewart C.Myers and Franklin Allen.Other recommended(but not required)Finance texts:lCorporate Finance,7th edition,Stephen Ross,Jeffrey Jaffe,and Randolph Westerfield,2005.Textbook中文版 English VersionMaterials(contd.)Course PlanWeekPart of TextbookMajor Topics1Ch 1Introduction 2Ch 2
6、 and 3Present Value and Bond Valuation3Ch 3，4 and 5Bond,Stock Valuation and Introduction of Investment Rules4Ch 5 and 6Application of Investment Rules 5Ch 7-9Asset Pricing in Corporate Finance(WACC)6Ch 10Project Analysis7Ch 13-15Financing Decisions(IPO)8IPO in China9Part 5(Part 7)Payout policy and C
7、apital Structure10Part 10Mergers and AcquisitionsCHAPTER 1 INTRODUCTIONCorporate Finance公司的三种组织形式公司的三种组织形式 单一业主制(Individual Proprietor)合伙制(Partnership)公司制(Corporate)单一业主与合伙制单一业主与合伙制 优势 组成容易 较简单的管理 不用承担公司税 劣势 融资难 无限责任 有限的生命力公司制公司制 优势 持续经营 有限责任 股权转让 有利于融资 劣势 双重课税 设立和维持的成本Chapter 1:Introduction to Corp
8、orate Finance Corporate investment and financing decisionsThe role of the financial manager and the opportunity cost of capitalGoals of the corporationAgency problems and corporate governance1-1 Corporate Investment and Financing Decisions Real Assets Used to produce goods and services Financial Ass
9、ets/Securities Financial claims on income generated by firms real assets Capital Budgeting/Capital Expenditure(CAPEX)Decision to invest in tangible or intangible assets1-1 Corporate Investment and Financing Decisions Investment Decision Purchase of real assets Financing Decision Sale of financial as
10、sets Capital Structure Choice between debt and equity financing1-1 Corporate Investment and Financing Decisions Capital Budgeting Examples Tangible Assetsi.e.Expanding stores，buying new machine Intangible Assetsi.e.Research and development for new drug,Patent,marketing teamTable 1.1 Recent Investmen
11、t/Financing DecisionsCompanyRecent Investment DecisionsRecent Financing DecisionsLVMH(France)LVMH acquires the Italian Jeweler,Bulgari,for$5 billion.Pays for the acquisition with a mixture of cash and shares.Procter&Gamble(U.S.)Spends$8 billion on advertising.Raises 100 billion Japanese yen by an is
12、sue of 5-year bonds.奇虎奇虎360Qihoo 360 TechnologyNSYE2015年2月4日，奇虎360公司斥巨资收购国际顶级域名，收购价格为1700万美元，约合人民币1.1亿元。2015年2月完成了2亿美元的股票回购计划。Alibaba Group2015年10月16日，阿里巴巴出资45亿美金收购优酷土豆。2014年5月完成了优酷土豆18.3%的股票收购。收购预计会于2016年第一季度完成。现金收购。1-1 Corporate Investment and Financing Decisions What Is a Corporation?Legal entity
13、,owned by shareholders Can make contracts,carry on business,borrow,lend,sue,and be sued Shareholders have limited liability and cannot be held personally responsible for corporations debtsFigure 1.1 Cash Flow between Financial Markets and Firms OperationsFinancialmanagerFirmsoperationsFinancialmarke
14、ts(1)Cash raised from investors(1)(2)Cash invested in firm(2)(3)Cash generated by operations(3)(4a)Cash reinvested(4a)(4b)Cash returned to investors(4b)1-2 The Financial Goal of the Corporation Stockholders Want Three Things To maximize current wealth To transform wealth into most desirable time pat
15、tern of consumption To manage risk characteristics of chosen consumption plan1-2 The Financial Goal of the Corporation Profit Maximization Not a well-defined financial objectiveWhich years profits?Shareholders will not welcome higher short-term profits if long-term profits are damagedCompany may inc
16、rease future profits by cutting years dividend,investing freed-up cash in firm Not in shareholders best interest if company earns less than opportunity cost of capital1-2 The Financial Goal of the Corporation The Investment Trade-off Hurdle Rate/Cost of CapitalMinimum acceptable rate of return on in
17、vestment Opportunity Cost of CapitalInvesting in a project eliminates other opportunities to use invested cashFigure 1.2 The Investment Trade-off1-2 The Financial Goal of the Corporation Shareholders desire wealth maximization Managers have many constituencies,“stakeholders”“Agency Problems”represen
18、t the conflict of interest between management and owners1-2 The Financial Goal of the Corporation Agency Problems Managers,acting as agents for stockholders,may act in their own interests rather than maximizing value Stakeholder Anyone with a financial interest in the firm Agency ProblemsOwnership v
19、ersus Management(Managers vs.stockholders)Difference in Information Project investment Stock return and risk Different Objectives Job Security Annual bonus vs dividends1-2 The Financial Goal of the Corporation1-2 The Financial Goal of the Corporation Agency costs are incurred when:Managers do not at
20、tempt to maximize firm value Shareholders incur costs to monitor managers and constrain their actions1-2 The Financial Goal of the Corporation Tools to Ensure Management Pays Attention to the Value of the Firm Managers actions subject to the scrutiny of board of directors Financial incentives provid
21、ed,such as stock options Job security Pressure to be acquiredOther references（1st class stopped here）Allen,Franklin,James McAndrews,and Philip Strahan.“E-Finance:An Introduction”Working Paper 01-36,Financial Institutions Center,The Wharton School,University of Pennsylvania.October 2001.Core,J.E.,W.R
22、.Guay,and D.F.Larcker.“Executive Equity Compensation and Incentives:A Survey,”Federal Reserve Bank of New York Economic Policy Review,9(April 2003),pp.27-50.Gompers,P.A.,J.L.Ishii,and A.Metrick.“Corporate Governance and Equity Prices”Quarterly Journal of Economics,118(1),February 2003,pp.107-155.L.G
23、uiso,L.Zingales,and P.Sapienza,“Trusting the Stock Market,”Journal of Finance 63(December 2008),pp.2557600.Mackie-Mason,J.K.,and R.H.Gordon.“How Much Do Taxes Discourage Incorporation?”Journal of Finance,(June 1997).Rappaport,A.“New thinking on how to link executive pay with performance.”Harvard Bus
24、iness Review,March-April 1999,91-104.CHAPTER 2 PRESENT VALUESCorporate FinanceChapter 2 How to calculate present valuesFuture values and present valuesPerpetuities and annuitiesGrowing perpetuities and annuitiesHow Interest Is Paid and Quoted2-1 Future Values and present valuesCalculating Future Val
25、uesFuture ValueAmount to which investment will grow after earning interestPresent ValueValue today of future cash flow2-1 Future Values and present values Future Value of$100=Example:FV What is the future value of$100 if interest is compounded annually at a rate of 7%for two years?tr)1(100$FV49.114$
26、)07.1(100$FV49.114$)07.1()07.1(100$FV2Figure 2.1 Future Values with compounding2-1 Future Values and present values1factordiscount=PVPV=luePresent vaC2-1 Future Values and present valuesDiscount factor=DF=PV of$1Discount factors can be used to compute present value of any cash flow2-1 Future Values
27、and present values Given any variables in the equation,one can solve for the remaining variable Prior example can be reversed 10049.114PVDFPV2)07.1(122CFigure 2.2 Present Values with compounding2-1 Future Values and present valuesValuing an Office BuildingStep 1:Forecast Cash FlowsCost of building=C
28、0=$700,000Sale price in year 1=C1=$800,000Step 2:Estimate Opportunity Cost of CapitalIf equally risky investments in the capital market offer a return of 7%,then cost of capital=r=7%2-1 Future Values and present values Valuing an Office Building Step 3:Discount future cash flows Step 4:Go ahead if P
29、V of payoff exceeds investment664,747$PV)07.1(000,800$)1(1rC664,47$000700$664,747$NPV,2-1 Future Values and present valuesrCC1=NPVinvestment requiredPV=NPV10Net Present Value2-1 Future Values and present values Risk and Present Value Higher risk projects require a higher rate of return Higher requir
30、ed rates of return cause lower PVs664,747$.071$800,000PV7%at$800,000 of PV1C2-1 Future Values and present valuesRisk and Net Present Value$47,664$700,00047,6647$=NPVinvestment requiredPV=NPV2-1 Future Values and present values Net Present Value Rule Accept investments that have positive net present
31、value Using the original example:Should one accept the project given a 10%expected return?273,27$1.1$800,000+$700,000=NPV2-1 Future Values and present values Rate of Return Rule Accept investments that offer rates of return in excess of their opportunity cost of capital In the project listed below,t
32、he opportunity cost of capital is 12%.Is the project a wise investment?14.3%or .143,$700,0000,00070$000,00$8investmentprofitReturn2-1 Future Values and present values Multiple Cash Flows Discounted Cash Flow (DCF)formula:ttrCrCrC)1()1()1(0.PV2211TtrCttC1)1(00NPVFigure 2.5 Net Present Values2-2 Perpe
33、tuities and annuitiesPerpetuityFinancial concept in which cash flow is theoretically received foreverPVluepresent vaflowcash ReturnCr 2-2 Perpetuities and annuitiesPerpetuityrC10PVratediscount flowcash flowcash of PV2-2 Perpetuities and annuitiesPresent Value of PerpetuitiesWhat is the present value
34、 of$1 billion every year,for eternity,if the perpetual discount rate is 10%?billion 10$PV10.0bil$12-2 Perpetuities and annuitiesPresent Value of PerpetuitiesWhat if the investment does not start making money for 3 years?billion 51.7$PV31.10110.0bil$12-2 Perpetuities and annuities Annuity Asset that
35、pays fixed sum each year for specified number of yearsPerpetuity(first payment in year 1)Perpetuity(first payment in year t+1)Annuity from year 1 to year tAssetYear of Payment1 2.t t+1Present ValuetrrCrC)1(12-2 Perpetuities and annuities Example:Tiburon Autos offers payments of$5,000 per year,at the
36、 end of each year for 5 years.If interest rates are 7%,per year,what is the cost of the car?2-2 Perpetuities and annuitiestrrrC111annuity of PV2-2 Perpetuities and annuities Annuity Example:The state lottery advertises a jackpot prize of$365 million,paid in 30 yearly installments of$12.167 million,a
37、t the end of each year.Find the true value of the lottery prize if interest rates are 6%.000,500,167$06.106.106.1167.12ValueLottery 30Value2-2 Perpetuities and annuitiesFuture Value of an AnnuityrrCt11annuity of FV2-2 Perpetuities and annuities Future Value of an Annuity What is the future value of$
38、20,000 paid at the end of each of the following 5 years,assuming investment returns of 8%per year?332,117$08.108.1000,20 FV52-3 Growing perpetuities and annuities Constant Growth Perpetuity This formula can be used to value a perpetuity at any point in timegrC10PVg=the annual growth rate of the cash
39、 flowgrCtt1PV2-3 Growing perpetuities and annuities Constant Growth Perpetuity What is the present value of$1 billion paid at the end of every year in perpetuity,assuming a rate of return of 10%and constant growth rate of 4%?billion 667.16$04.10.1PV02-3 Growing perpetuities and annuities Growing Ann
40、uities Golf club membership is$5,000 for 1 year,or$12,750 for three years.Find the better deal given payment due at the end of the year and 6%expected annual price increase,discount rate 10%.2-4 How Interest is Paid and QuotedEffective Annual Interest Rate(EAR)Interest rate annualized using compound
41、 interestAnnual Percentage Rate(APR)Interest rate annualized using simple interest2-4 How Interest is Paid and outlaid Given a monthly rate of 1%,what is the(EAR)?What is the(APR)?12.00%or .12,=12 .01=APR12.68%or .1268,=1.01)+(1=EAR=1.01)+(1=EAR1212rCHAPTER 3 VALUING BONDSCorporate FinanceChapter 3
42、Valuing BondsUsing present-value formulas to value bondsHow bond prices vary with interest ratesExplaining the term structureReal and nominal rates of interestCorporate bonds and the risk of default3-1 Using the present value formula to value bondsNNrCrCrC)1(000,1.)1()1(PV2211ExampleToday is October
43、 1,2010;what is the value of the following bond?An IBM bond pays$115 every September 30 for five years.In September 2015 it pays an additional$1,000 and retires the bond.The bond is rated AAA(WSJ AAA YTM is 7.5%).84.161,1$075.1115,1075.1115075.1115075.1115075.1115PV54323-1 Using the present value fo
44、rmula to value bondsExample:FranceIn October 2011 you purchase 100 euros of bonds in France which pay a 5%coupon every year.If the bond matures in 2016 and the YTM is 2.4%,what is the value of the bond?11.112024.10.105024.15024.15024.15024.15PV54323-1 Using the present value formula to value bondsAn
45、other Example:JapanIn July 2010 you purchase 200 yen of bonds in Japan which pay an 8%coupon every year.If the bond matures in 2015 and the YTM is 4.5%,what is the value of the bond?57.243045.1216045.116045.116045.116045.116PV54323-1 Using the present value formula to value bondsExample:USAIn Februa
46、ry 2012 you purchase a three-year U.S.government bond.The bond has an annual coupon rate of 11.25%,paid semiannually.If investors demand a 0.085%semiannual return,what is the price of the bond?40.331,1$00085.125.105600085.125.5600085.125.5600085.125.5600085.125.5600085.125.56PV654323-1 Using the pre
47、sent value formula to value bonds3-2 how bond prices vary with interest ratesExample,Continued:USATake the same three-year U.S.government bond.If investors demand a 4.0%semiannual return,what is the new price of the bond?05.1203$04.125.105604.125.5604.125.5604.125.5604.125.5604.125.56PV65432Figure 3
48、.1 Interest rate on 10-year treasuries024681012141619001910192019301940195019601970198019902000Yield,%YearInterest rate,%3-2 HOW BOND PRICES VARY WITH INTEREST RATES Bond priceFigure 3.2 Maturity and Prices05001000150020002500300035004000450050000246810121416182022242628When interest rate=11.25%coup
49、on,both bonds sell for face value Bond priceInterest rate,%3-2 how bond prices vary with interest ratesPV)(PV.PV)(PV3PV)(PV2PV)(PV1Duration321TCTCCCyield1duration(%)volatilityduration Modified3-2 Duration calculationYearPayment CtPV(Ct)at 4.0%Fraction of Total ValuePV(Ct)/VYear fraction of total val
50、ue t PV(Ct)/PV1$90$86.540.06660.066629083.210.06400.128039080.010.06150.184649076.930.05920.236759073.970.05690.284569071.130.05470.328371090828.310.63714.4598PV=$1300.10Total=duration=5.603-2 Duration&Bond PricesInterest rate,%Bond price,%3-3 term structure of Interest RatesShort-and long-term rate
