彼得羅斯公司理財(cái)cap(5)-資料下載頁
2024-10-18 14:47本頁面
【正文】 1327 Cost of Preferred Stock ? Preferred stock is a perpetuity, so its price is equal to the coupon paid divided by the current required return. ? Rearranging, the cost of preferred stock is: ? RP = C / PV 1328 The Weighted Average Cost of Capital ? The Weighted Average Cost of Capital is given by: ? Because interest expense is taxdeductible, we multiply the last term by (1 – TC). RWACC = Equity + Debt Equity REquity + Equity + Debt Debt RDebt (1 – TC) RWACC = S + B S RS + S + B B RB (1 – TC) 1329 Example: International Paper ? First, we estimate the cost of equity and the cost of debt. ? We estimate an equity beta to estimate the cost of equity. ? We can often estimate the cost of debt by observing the YTM of the firm’s debt. ? Second, we determine the WACC by weighting these two costs appropriately. 1330 Example: International Paper ? The industry average beta is , the risk free rate is 3%, and the market risk premium is %. ? Thus, the cost of equity capital is: RS = RF + bi ( RM – RF) = 3% + % = % 1331 Example: International Paper ? The yield on the pany’s debt is 8%, and the firm has a 37% marginal tax rate. ? The debt to value ratio is 32% % is International’s cost of capital. It should be used to discount any project where one believes that the project’s risk is equal to the risk of the firm as a whole and the project has the same leverage as the firm as a whole. = % + 8% (1 – ) = % RWACC = S + B S RS + S + B B RB (1 – TC) 1332 Flotation Costs ? Flotation costs represent the expenses incurred upon the issue, or float, of new bonds or stocks. ? These are incremental cash flows of the project, which typically reduce the NPV since they increase the initial project cost (., CF0). Amount Raised = Necessary Proceeds / (1% flotation cost) ? The % flotation cost is a weighted average based on the average cost of issuance for each funding source and the firm’s target capital structure: fA = (E/V)* fE + (D/V)* fD 1333 Quick Quiz ? How do we determine the cost of equity capital? ? How can we estimate a firm or project beta? ? How does leverage affect beta? ? How do we determine the weighted average cost of capital? ? How do flotation costs affect the capital budgeting process?
教學(xué)課件相關(guān)推薦
鄂ICP備17016276號-1