文本公司理財(cái)-利chap

1、Chapter 13Fundamentals of Corporate FinanceFifth EditionSlides byMatthew WillMcGraw-Hill/IrwinCopyright 2007 by The McGraw-Hill Companies, Inc. All rights reserved Introduction to Corporate Finance and GovernanceTopics CoveredCreating Value with Financing DecisionsCommon StockPreferred StockCorporat

2、e DebtConvertible SecuritiesPatterns of Corporate FinancingTypes of SecuritiesEquityCommon stockPreferred stockDebtCommercial paperDebenturesGuaranteed notesRemarketable debtEuro notesSterling notesNew Zealand dollar notesBank loansCommon StockTreasury StockStock that has been repurchased by the com

3、pany and held in its treasuryIssued SharesShares that have been issued by the company.Outstanding SharesShares that have been issued by the company and held by investors.Common StockAuthorized Share Capital Maximum number of shares that the company is permitted to issue, as specified in the firms ar

4、ticles of incorporation.Par ValueValue of security shown on certificate.Retained EarningsEarnings not paid out as dividends.Common StockBook Value vs. Market ValueBook value is a backward looking measure. It tells us how much capital the firm has raised from shareholders in the past. It does not mea

5、sure the value that shareholders place on those shares today. The market value of the firm is forward looking, it depends on the future dividends that shareholders expect to receive. Common StockExample - H.J. Heinz Book Value vs. Market Value (4/2004)Total Shares outstanding = 352 millionCommon Sto

6、ckExample - H.J. Heinz Book Value vs. Market Value (4/2004)Total Shares outstanding = 352 millionCommon StockPreferred StockPreferred Stock - Stock that takes priority over common stock in regards to dividends. Net Worth - Book value of common shareholders equity plus preferred stock.Floating-Rate P

7、referred - Preferred stock paying dividends that vary with short term interest rates. Corporate DebtDebt has the unique feature of allowing the borrowers to walk away from their obligation to pay, in exchange for the assets of the company.“Default Risk” is the term used to describe the likelihood th

8、at a firm will walk away from its obligation, either voluntarily or involuntarily. “Bond Ratings”are issued on debt instruments to help investors assess the default risk of a firm.Corporate DebtPrime Rate - Benchmark interest rate charged by banks.Funded Debt - Debt with more than 1 year remaining t

9、o maturity.Sinking Fund - Fund established to retire debt before maturity.Callable Bond - Bond that may be repurchased by firm before maturity at specified call price. Corporate DebtSubordinate Debt - Debt that may be repaid in bankruptcy only after senior debt is repaid.Secured Debt - Debt that has

10、 first claim on specified collateral in the event of default. Investment Grade - Bonds rated Baa or above by Moodys or BBB or above by S&P.Junk Bond - Bond with a rating below Baa or BBB.Corporate DebtEurodollars - Dollars held on deposit in a bank outside the United States.Eurobond - Bond that is m

11、arketed internationally.Private Placement - Sale of securities to a limited number of investors without a public offering.Protective Covenants - Restriction on a firm to protect bondholders.Lease - Long-term rental agreement. Convertible SecuritiesWarrant - Right to buy shares from a company at a stipulated price before a set date.Convertible Bond - Bond that the holder may exchange for a specified amount of another security.Convertibles are a combined security, consisting of both a bond and a call option. Patterns of Corporate FinancingFirms may raise funds from external sources or plow ba