capitalstructureandleverage(英文版)(編輯修改稿)
2025-02-03 09:32 本頁面
【文章內(nèi)容簡介】 0 250 AA 8% 500 A 9% 750 BBB % 1,000 BB 14% 14 20 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. Why does the bond rating and cost of debt depend upon the amount borrowed? As the firm borrows more money, the firm increases its risk causing the firm’s bond rating to decrease, and its cost of debt to increase. 14 21 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. What would the earnings per share be if Campus Deli recapitalized and used these amounts of debt: $0, $250,000, $500,000, $750,000? Assume EBIT = $400,000, T = 40%, and shares can be repurchased at P0 = $25. D = 0: EPS0 = = = $. (EBIT – kdD)(1 – T) Shares outstanding ($400,000)() 80,000 14 22 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. D = $250, kd = 8%. = = 10,000. Shares repurchased $250,000 $25 TIE = = = 20 . $400 $20 EBIT I EPS1 = = $. [$400 – ($250)]() 80 – 10 14 23 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. D = $500, kd = 9%. = = 20. Shares repurchased $500 $25 TIE = = = . $400 $45 EBIT I EPS2 = = $. [$400 – ($500)]() 80 – 20 14 24 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. D = $750, kd = %. = = 30. Shares repurchased $750 $25 TIE = = = . $400 $ EBIT I EPS3 = = $. [$400 – ($750)]() 80 – 30 14 25 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. D = $1,000, kd = 14%. = = 40. Shares repurchased $1,000 $25 TIE = = = . $400 $140 EBIT I EPS4 = = $. [$400 – ($1,000)]() 80 – 40 14 26 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. Stock Price (Zero Growth) If payout = 100%, then EPS = DPS and E(g) = 0. We just calculated EPS = DPS. To find the expected stock price (P0), we must find the appropriate ks at each of the debt levels discussed. P0 = = = . D1 ks – g EPS ks DPS ks 14 27 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. What effect would increasing debt have on the cost of equity for the firm? ?If the level of debt increases, the riskiness of the firm increases. ?We have already observed the increase in the cost of debt. ?However, the riskiness of the firm’s equity also increases, resulting in a higher ks. 14 28 Copyright 169。 2023 by Harcourt, Inc. All rights reserved. The Hamada Equation ?Because the increased use of debt causes both the costs of debt and equity to increase, we need to estimate the new cost of equity. ?The Hamada equation attempts to quantify the increased cost of equity due to financial leverage. ?Uses the unlevered beta of
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