公司财务与金融

CHAPTER1OverviewofCorporateFinanceandtheFinancialEnvironment•Corporatefinance–Formsofbusinessorganization–Objectiveofthefirm:Maximizewealth–Determinantsofstockpricing•Thefinancialenvironment–Financialinstruments,marketsandinstitutions–InterestratesandyieldcurvesWhyiscorporatefinanceimportanttoallmanagers?•Corporatefinanceprovidestheskillsmanagersneedto:–Identifyandselectthecorporatestrategiesandindividualprojectsthataddvaluetotheirfirm.–Forecastthefundingrequirementsoftheircompany,anddevisestrategiesforacquiringthosefunds.•Soleproprietorship•Partnership•CorporationWhataresomeformsofbusinessorganization?•Advantages:–Easeofformation–Subjecttofewregulations–Nocorporateincometaxes•Disadvantages:–Limitedlife–Unlimitedliability–DifficulttoraisecapitalSoleProprietorship•Apartnershiphasroughlythesameadvantagesanddisadvantagesasasoleproprietorship.Partnership•Advantages:–Unlimitedlife–Easytransferofownership–Limitedliability–Easeofraisingcapital•Disadvantages:–Doubletaxation–Costofset-upandreportfilingCorporation•Theprimaryobjectiveshouldbeshareholderwealthmaximization,whichtranslatestomaximizingstockprice.–Shouldfirmsbehaveethically?YES!–Dofirmshaveanyresponsibilitiestosocietyatlarge?YES!Shareholdersarealsomembersofsociety.Whatshouldmanagement’sprimaryobjectivebe?Ismaximizingstockpricegoodforsociety,employees,andcustomers?•Employmentgrowthishigherinfirmsthattrytomaximizestockprice.Onaverage,employmentgoesupin:–firmsthatmakemanagersintoowners(suchasLBOfirms)–firmsthatwereownedbythegovernmentbutthathavebeensoldtoprivateinvestors•Consumerwelfareishigherincapitalistfreemarketeconomiesthanincommunistorsocialisteconomies.•Fortuneliststhemostadmiredfirms.Inadditiontohighstockreturns,thesefirmshave:–highqualityfromcustomers’view–employeeswholikeworkingthere•Amountofcashflowsexpectedbyshareholders•Timingofthecashflowstream•RiskofthecashflowsWhatthreefactorsaffectstockprices?•Salesrevenues–Currentlevel–Short-termgrowthrateinsales–Long-termsustainablegrowthrateinsales•Operatingexpenses(e.g.,rawmaterials,labor,etc.)•Necessaryinvestmentsinoperatingcapital(e.g.,buildings,machines,inventory,etc.)Whatfactorsdetermineofcashflows?Whatfactorsaffectthelevelandriskofcashflows?•Decisionsmadebyfinancialmanagers:–Investmentdecisions(productlines,productionprocesses,geographicmarket,useoftechnology,marketingstrategy,etc.)–Financingdecisions(choiceofdebtpolicyanddividendpolicy)•Theexternalenvironment(taxes,regulation,etc.)Whatarefinancialassets?•Afinancialassetisacontractthatentitlestheownertosometypeofpayoff.–Debt–Equity–Derivatives•Ingeneral,eachfinancialassetinvolvestwoparties,aproviderofcash(i.e.,capital)andauserofcash.Whataresomefinancialinstruments?InstrumentRate(9/01)U.S.T-bills2.3%Banker’sacceptances2.6Commercialpaper2.4NegotiableCDs2.5Eurodollardeposits2.5CommercialloansTiedtoprime(6.0%)orLIBOR(2.6%)(More..)FinancialInstruments(Continued)InstrumentRate(9/01)U.S.T-notesandT-bonds5.5%Mortgages6.8Municipalbonds5.1Corporate(AAA)bonds7.2Preferredstocks7to9%Commonstocks(expected)10to15%Whoaretheproviders(savers)andusers(borrowers)ofcapital?•Households:Netsavers•Non-financialcorporations:Netusers(borrowers)•Governments:Netborrowers•Financialcorporations:Slightlynetborrowers,butalmostbreakeven•Directtransfer(e.g.,corporationissuescommercialpapertoinsurancecompany)•Throughaninvestmentbankinghouse(e.g.,IPO,seasonedequityoffering,ordebtplacement)•Throughafinancialintermediary(e.g.,individualdepositsmoneyinbank,bankmakescommercialloantoacompany)Whatarethreewaysthatcapitalistransferredbetweensaversandborrowers?•Commercialbanks•Savings&Loans,mutualsavingsbanks,andcreditunions•Lifeinsurancecompanies•Mutualfunds•PensionfundsWhataresomefinancialintermediaries?TheTop5BankingCompaniesintheWorld,12/1999BankNameCountryTotalassetsDeutscheBankAGFrankfurt$844billionCitigroupNewYork$717billionBNPParibasParis$702billionBankofTokyoTokyo$697billionBankofAmericaCharlotte$632billionWhataresometypesofmarkets?•Amarketisamethodofexchangingoneasset(usuallycash)foranotherasset.•Physicalassetsvs.financialassets•Spotversusfuturemarkets•Moneyversuscapitalmarkets•PrimaryversussecondarymarketsHowaresecondarymarketsorganized?•By“location”–Physicallocationexchanges–Computer/telephonenetworks•Bythewaythatordersfrombuyersandsellersarematched–Openoutcryauction–Dealers(i.e.,marketmakers)–Electroniccommunicationsnetworks(ECNs)PhysicalLocationvs.Computer/telephoneNetworks•Physicallocationexchanges:e.g.,NYSE,AMEX,CBOT,TokyoStockExchange•Computer/telephone:e.g.,Nasdaq,governmentbondmarkets,foreignexchangemarketsAuctionMarkets•NYSEandAMEXarethetwolargestauctionmarketsforstocks.•NYSEisamodifiedauction,witha“specialist.”•Participantshaveaseatontheexchange,meetface-to-face,andplaceordersforthemselvesorfortheirclients;e.g.,CBOT.•Marketordersvs.limitordersDealerMarkets•“Dealers”keepaninventoryofthestock(orotherfinancialasset)andplacebidandask“advertisements,”whicharepricesatwhichtheyarewillingtobuyandsell.•Computerizedquotationsystemkeepstrackofbidandaskprices,butdoesnotautomaticallymat