corperatefinance.doc
《corperatefinance.doc》由会员分享,可在线阅读,更多相关《corperatefinance.doc(7页珍藏版)》请在咨信网上搜索。
1、Corporate FinanceUniversity of International Business and EconomicsSPRING, 2010SITECORPORATE FINANCETake Home Midterm Exam(Time allowed: THREE hours)NOTE: Answer any FIVE of ALL of SEVEN questions. All questions carry equal marks. EachQuestion is worthy of 20 marks. Partial marks will be given so pl
2、ease try your bestto be very clear in explaining your derivations in every step. The exam will not becurved. But I highly suggest to try every question for practice.1. Eureka Space Technology Group (an all-equity firm) is announcing a $100 million R&D project, which is expected to drastically improv
3、e its satellite launching technology by reducing its annual launching costs from $500 million to $475 million. The firm can finance the project through either retained earnings or a new bond issue. The firms cost of equity capital is 12.5 percent. The prevailing market rate of interest for comparabl
4、e corporate bonds is 8 percent. Currently, the firm has 15 million shares of stock outstanding at $32.5 a share. The firm has sufficient earnings to fully utilize the corporate tax shield if the project is debt financed. Assume the relevant marginal corporate tax rate is 35 percent. a. Which financi
5、ng method, retained earnings or external debt financing, would you recommend to the management and why?应该采用外部债务融资的方式,因为由于有税收的存在,利息的抵税效应可以增加公司价值。全部采用权益融资项目现金流为:(500-475)(1-35%)=16.25项目的现值为:130项目的净现值为:130-100=30 若公司全部采取债务融资,APV=NPV+B则调整净现值为:30+100=65因此公司的价值会增加。 b. What is the resulting PV of the firm
6、from each of these two financing methods?全部采用权益融资PV=30+32.5=517.5全部采用外部债务融资PV=65+32.5=552.5 c. What do you expect will be the stock market stock price response to the two different methods?全部采用权益融P=517.5=34.5美元全部采用外部债务融资P=552.5=36.8美元 d. Explain the intuition behind the results in part (c).杠杆企业的公司价值
7、更高说明,在不考虑破产成本等由于增加债务而带来的成本和风险等因素时,债务的节税效应增加了公司的市场价值,企业应该尽可能多的利用债务进行融资。2. The Gulf Power Company is an electric utility planning to build a new power-generating plant of conventional design. The company has traditionally paid out all earnings to the stockholders as dividends and financed capital expe
8、nditures with new issues of common stock. There is no debt or preferred stock presently outstanding. Data on the company and the new power plant follow. Assume all earnings streams are perpetuities that are constant.Company DataCurrent annual earnings: $27 millionNumber of outstanding shares: 10 mil
9、lionNew Power Plant Initial outlay: $20 millionAdded annual earnings: $3 millionManagement estimates the rate of return currently required by stockholders to be 10 percent per year and considers the power plant to have the same risk as existing assets. Assume there are no taxes, no costs of bankrupt
10、cy, and perfect capital markets. a. What will be the total market value of Gulf Power if common stock is issued to finance the plant?旧资产的价值:270新工厂的净现值:=10新股发行的收益:20公司的价值为:270+10+20=300 b. What will be the total value (stocks plus bonds) of the firm if $20 million in bonds at an interest rate of 8 pe
11、rcent is issued to finance the plant, assuming the bonds are perpetuities?旧资产的价值= 新工厂的净现值:=10新增的债务的价值:公司的价值为:270+10+20=300 c. Given that bonds will be issued as in (b), calculate the rate of return required by stockholders after the financing has occurred and the plant has been built.=10%+=10.15%3.
12、Kinedyne, Inc., has decided to divest one of its divisions. The assets of the group have the same operating risk characteristics as those of the parent firm. The capital structure for the parent has been stable at 40-percent debt/60-percent equity (in market-value terms), the level determined to be
13、optimal given the firms assets. The required return on Kinedynes assets is 16 percent, and the firm (and the division) borrows at a rate of 10 percent. Sales revenue for the division is expected to remain stable indefinitely at last years level of $19,740,000. Variable costs amount to 60 percent of
14、sales. Annual depreciation of $1.8 million is exactly matched each year by new investment in the divisions equipment. The division would be taxed at the parents current rate of 40 percent. a. How much is the division worth in unleveraged form?无杠杆公司的自由现金流为:UCF=19740000+1800000=5457600 =10% 解得=22.67%
- 配套讲稿:
如PPT文件的首页显示word图标,表示该PPT已包含配套word讲稿。双击word图标可打开word文档。
- 特殊限制:
部分文档作品中含有的国旗、国徽等图片,仅作为作品整体效果示例展示,禁止商用。设计者仅对作品中独创性部分享有著作权。
- 关 键 词:
- corperatefinance
1、咨信平台为文档C2C交易模式,即用户上传的文档直接被用户下载,收益归上传人(含作者)所有;本站仅是提供信息存储空间和展示预览,仅对用户上传内容的表现方式做保护处理,对上载内容不做任何修改或编辑。所展示的作品文档包括内容和图片全部来源于网络用户和作者上传投稿,我们不确定上传用户享有完全著作权,根据《信息网络传播权保护条例》,如果侵犯了您的版权、权益或隐私,请联系我们,核实后会尽快下架及时删除,并可随时和客服了解处理情况,尊重保护知识产权我们共同努力。
2、文档的总页数、文档格式和文档大小以系统显示为准(内容中显示的页数不一定正确),网站客服只以系统显示的页数、文件格式、文档大小作为仲裁依据,平台无法对文档的真实性、完整性、权威性、准确性、专业性及其观点立场做任何保证或承诺,下载前须认真查看,确认无误后再购买,务必慎重购买;若有违法违纪将进行移交司法处理,若涉侵权平台将进行基本处罚并下架。
3、本站所有内容均由用户上传,付费前请自行鉴别,如您付费,意味着您已接受本站规则且自行承担风险,本站不进行额外附加服务,虚拟产品一经售出概不退款(未进行购买下载可退充值款),文档一经付费(服务费)、不意味着购买了该文档的版权,仅供个人/单位学习、研究之用,不得用于商业用途,未经授权,严禁复制、发行、汇编、翻译或者网络传播等,侵权必究。
4、如你看到网页展示的文档有www.zixin.com.cn水印,是因预览和防盗链等技术需要对页面进行转换压缩成图而已,我们并不对上传的文档进行任何编辑或修改,文档下载后都不会有水印标识(原文档上传前个别存留的除外),下载后原文更清晰;试题试卷类文档,如果标题没有明确说明有答案则都视为没有答案,请知晓;PPT和DOC文档可被视为“模板”,允许上传人保留章节、目录结构的情况下删减部份的内容;PDF文档不管是原文档转换或图片扫描而得,本站不作要求视为允许,下载前自行私信或留言给上传者【w****g】。
5、本文档所展示的图片、画像、字体、音乐的版权可能需版权方额外授权,请谨慎使用;网站提供的党政主题相关内容(国旗、国徽、党徽--等)目的在于配合国家政策宣传,仅限个人学习分享使用,禁止用于任何广告和商用目的。
6、文档遇到问题,请及时私信或留言给本站上传会员【w****g】,需本站解决可联系【 微信客服】、【 QQ客服】,若有其他问题请点击或扫码反馈【 服务填表】;文档侵犯商业秘密、侵犯著作权、侵犯人身权等,请点击“【 版权申诉】”(推荐),意见反馈和侵权处理邮箱:1219186828@qq.com;也可以拔打客服电话:4008-655-100;投诉/维权电话:4009-655-100。