財(cái)務(wù)管理：理論與實(shí)踐21show-wenkub
2023-05-20 23:56:42 本頁(yè)面
【正文】 21 18 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Generally, a warrant will sell in the open market at a premium above its value if exercised (it can’t sell for less). ?Therefore, warrants tend not to be exercised until just before expiration. Assume that the warrants expire 10 years after issue. When would you expect them to be exercised? (More...) 21 14 Copyright 169。 20xx Harcourt, Inc. All rights reserved. Step 1: Calculate VBond VPackage = VBond + VWarrants = $1,000. VWarrants = 50($3) = $150. VBond + $150 = $1,000 VBond = $850. 21 10 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Dividends are indexed to the rate on treasury securities instead of being fixed. ?Excellent ST corporate investment: ?Only 30% of dividends are taxable to corporations. ?The floating rate generally keeps issue trading near par. What is floating rate preferred? 21 6 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Types of hybrid securities ?Preferred stock ?Warrants ?Convertibles ?Features and risk ?Cost of capital to issuers CHAPTER 21 Hybrid Financing: Preferred Stock, Warrants, and Convertibles 21 2 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Preferred dividends are specified by contract, but they may be omitted without placing the firm in default. ?Most preferred stocks prohibit the firm from paying mon dividends when the preferred is in arrears. ?Usually cumulative up to a limit. How does preferred stock differ from mon stock and debt? (More...) 21 3 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?However, if the issuer is risky, the floating rate preferred stock may have too much price instability for the liquid asset portfolios of many corporate investors. 21 7 Copyright 169。 20xx Harcourt, Inc. All rights reserved. Step 2: Find Coupon Payment and Rate N I/YR PV PMT FV 20 12 850 1000 Solve for payment = 100 Therefore, the required coupon rate is $100/$1,000 = 10%. 21 11 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?In a steppedup exercise price, the exercise price increases in steps over the warrant’s life. Because the value of the warrant falls when the exercise price is increased, stepup provisions encourage inthemoney warrant holders to exercise just prior to the stepup. ?Since no dividends are earned on the warrant , holders will tend to exercise voluntarily if a stock’s payout ratio rises enough. 21 15 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Here are the cash flows on a time line: 0 1 4 5 6 19 20 +1,000 100 100 100 100 100 100 1,000 1,100 Input the cash flows into a calculator to find IRR = %. This is the pretax cost of the bond and warrant package. (More...) 21 19 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?20year, % annual coupon, callable convertible bond will sell at its $1,000 par value。 20xx Harcourt, Inc. All rights reserved. What con
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