財務管理：理論與實踐21show(參考版)
2025-05-18 23:56本頁面
【正文】 20xx Harcourt, Inc. All rights reserved. ?Company with good future prospects can issue stock “through the back door” by issuing convertible bonds ?Avoids negative signal of issuing stock directly ?Since prospects are good, bonds will likely be converted into equity, which is what the pany wants to issue 。 20xx Harcourt, Inc. All rights reserved. How do convertibles help minimize agency costs? ?Agency costs due to conflicts between shareholders and bondholders ?Asset substitution (or baitandswitch). Firm issues low cost straight debt, then invests in risky projects ?Bondholders suspect this, so they charge high interest 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. ?The firm’s future needs for equity capital: ?Exercise of warrants brings in new equity capital. ?Convertible conversion brings in no new funds. ?In either case, new lower debt ratio can support more financial leverage. Besides cost, what other factors should be considered? (More...) 21 42 Copyright 169。 20xx Harcourt, Inc. All rights reserved. Warrants Step 1: Find the aftertax cost of the bond with warrants. 0 1 ... 4 5 6 ... 19 20 +1,000 60 60 60 60 60 60 1,000 1,060 INT(1 T) = $100() = $60. Warrants(Opportunity loss per warrant) = 50($) = $. Solve for: kw (AT) = %. 21 40 Copyright 169。 20xx Harcourt, Inc. All rights reserved. WACC (with = (%) + (%) convertibles) + (16%) = %. WACC (without = (%) + (16%) convertibles) = %. Convertibles Step 3: Calculate the WACC. 21 38 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. kd = 12% and kc = %. ks = + g = + = %. Since kc is between kd and ks, the costs are consistent with the risks. ?Check the values: D0(1 + g) P0 $() $20 21 34 Copyright 169。 20xx Harcourt, Inc. All rights reserved. What is the convertible’s expected cost of capital to the firm? 0 1 2 3 4 5 6 1,000 105 105 105 105 105 105 1, 1, CV6 = 40($20)()6 = $1,. Input the cash flows in the calculator and solve for IRR = %. 21 32 Copyright 169。 20xx Harcourt, Inc. All rights reserved. ?Straight debt value10 = $. ?CV10 = $1,. Floor value10 = $1,. ?A c
教學課件相關推薦
鄂ICP備17016276號-1