財(cái)務(wù)管理：理論與實(shí)踐21show(存儲版)
【正文】 nterest rates ?Convertible debt allows bondholders to share in upside potential, so it has low rate. 21 46 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Warrants bring in new capital, while convertibles do not. ?Most convertibles are callable, while warrants are not. ?Warrants typically have shorter maturities than convertibles, and expire before the acpanying debt. Recap the differences between warrants and convertibles. (More...) 21 44 Copyright 169。 20xx Harcourt, Inc. All rights reserved. Convertibles Step 1: Find the aftertax cost of the convertibles. 0 1 2 3 4 5 6 1,000 63 63 63 63 63 63 1, 1, INT(1 T) = $105() = $63. With a calculator, find: kc (AT) = IRR = %. 21 36 Copyright 169。 20xx Harcourt, Inc. All rights reserved. Conversion value = CVt = CR(P0)(1 + g)t. t = 0 CV0 = 40($20)()0 = $800. t = 10 CV10 = 40($20)()10 = $1,. What is the formula for the bond’s expected conversion value in any year? 21 28 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. ?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. ?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. ?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. 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. ?The pany will exchange stock worth $ for one warrant plus $25. The opportunity cost to the pany is $ $ = $ per warrant. ?Bond has 50 warrants, so the opportunity cost per bond = 50($) = $. What is the expected return to the bond withwarrant holders (and cost to the issuer) if the warrants are expected to be exercised in 5 years when P = $? (More...) 21 18 Copyright 169。 g = 8%. ?Conversion ratio = CR = 40 shares. Assume the following convertible bond data: 21 23 Copyright 169。 20xx Harcourt, Inc. All rights reserved. If the firm intends to force conversion on the first anniversary date after CV $1,200, when is the issue expected to be called?
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