同濟(jì)會計(jì)專業(yè)英語教學(xué)包電子教案chapter

1、知識目標(biāo)：Explainwhatcapitalcost Understandthe知識目標(biāo)：Explainwhatcapitalcost Understandtheleverage能力目標(biāo):DescribethetinfluenceacompanyscapitalstructureUnderstandthedividend payment素質(zhì)目標(biāo)：Define the contentofdividend 教重Describethetinfluenceacompanyscapitalstructure教難Describethetinfluenceacompanyscapitalstructure

2、教4教 學(xué) 內(nèi) 容 與 教 學(xué) 過 程 設(shè) ChapterCapitalStructureandDividendTopic1:Capital1. The cost of funds used for financing a business. Cost of capital depends on the mode of financingusedit referstothe costof equity if the business is financed solely through equity, or to the cost of debt if it is financed solel

3、y through debt. Many companies use a combination of debt and equity to finance their businesses, and for such companies, their overall cost of capital isChapterCapitalStructureandDividendTopic1:Capital1. The cost of funds used for financing a business. Cost of capital depends on the mode of financin

4、gusedit referstothe costof equity if the business is financed solely through equity, or to the cost of debt if it is financed solely through debt. Many companies use a combination of debt and equity to finance their businesses, and for such companies, their overall cost of capital is derived from a

5、weighted average of capital , widely known as the weighted average cost of capital (WACC). the cost of capital represents a hurdle t a company ebeforeitcan s to generate value, it is extensively used in the capital budgeting pro whether the company should proceed wi2. Cost of CapitalThe cost of capi

6、tal is the blended cost of debt and ta company acquired in order to fund its It is important, because a investment s related to new operations should always result in a texceeds its cost of capital . If not, then the company is not generating a return for its (1)HowtoCalculatethe Cost of The cost of

7、 capital is comprised of the costs of debt, preferred stock, and The formula for the cost of capital is comprised of separate calculations for three of these items, ust then be combined to derive the total cost of capital a weighted average basis.Theformulaforthe costof debt isas(erestExpense (1Tax

8、(Amount of Debt Debt Acquisition Fees + Premium on Debt Discount on The cost of preferred stock is a simpler calculation, erest payments on thisform offundingare not tax-erest Expense Amount of Preferred StockThe formulaisasA beta value of n one indicates a level of rate-of-return t is age, while a

9、beta nould indicate an increasing degree of in the rate of return. Given these components, the formula for the cost of common stock is as follows:Risk-FreeReturn+(Beta(AverageStockReturnRisk-FreeOnce all of these calculations have been made, they must be combined on a weighted average basis to deriv

10、e the blended cost of capital for a company. We do this by multiplying the cost of each item by the amount of outstanding ted with it, ashefollowing TotalDebtFundingPercentageCost=DollarCostofTotal Preferred Stock FundingPercentage Cost=Dollar Cost of Preferred Stock Total Common FundingPercentage C

11、ost=Dollar Cost of Common Stock=TotalCostof Topic2: Leverage1. l leverage can be defined asTotalDebtFundingPercentageCost=DollarCostofTotal Preferred Stock FundingPercentage Cost=Dollar Cost of Preferred Stock Total Common FundingPercentage Cost=Dollar Cost of Common Stock=TotalCostof Topic2: Levera

12、ge1. l leverage can be defined as the degree to which a company uses e securities, such as debt and preferred equity. With a high degree l leverage come erest payments. As a result, the bottom-line per sharearenegativelyaffectederest payments. erestpaymentsincrease aresultofincreased lleverage,EPSis

13、driven(2)LeverageRatiosforEvaluatingSolvency andCapital The most well-known finan expressed as:Totaldebt/Totall leverage ratio is the debt-to-equity ratio. It The l leverage ratio is sometimes referred to as the equity r. le, a company has assets valued at $2 billion and stockholder equity of billio

14、n. The equity r value would be 2.0 ($2 billion / $1 billion), tonehalfofacompanysassets arefinancedbyequity.Thebalancemustbefinancedby Topic3: CapitalStructure1. The capital structure is how a firm its overall operations and growth using different of funds. Debt he form of bond es or long-notes paya

15、ble, while equity is classified as common stock, preferred stock or retained earnings. Short-term debtsuch as workingcapitalrequirements is also consideredto be part of the capital structure.2. Debt andDebt is one of the two main ways companies can raise capital in the markets. Companies like to e d

16、ebt because of the tax erestare tax-deductible. Debt also allowsa company or business to retain ownership, unlike equity.Additionally,imes of lowerest rates, debt is abundant and easy to acEquity is more n debt, lly erest rates are However, unlike debt, equity does not need to bepaid back if earning

17、s decline. On the other hand, equity represents a claim on the future earnings of the company as a part 3. tInfluenceaCompanysCapital-StructureThe primary factors t influence a companys capital-structure are (1)BusinessExcluding debt, business risk is the basic risk of the companys operations. The g

18、reater the business risk, the lower the optimal debt ratio.(2)CompanysTaxDebt payments are tax deductible. ch, if a companys tax (1)BusinessExcluding debt, business risk is the basic risk of the companys operations. The greater the business risk, the lower the optimal debt ratio.(2)CompanysTaxDebt p

19、ayments are tax deductible. ch, if a companys tax rate is high, debt as a means of financing a project is attractive because the tax deductibility of debtpaymentsprotects (3) FinanlFlexibility should come as no efrom ise capital in bad times. It t companies typically have no problem raising whensale

20、saregrowing andearningsareManagementManagement stylesrange from aggressive to conservative. The more conservative a managements approach is, the less inclined it is to use debt to increase profits.Growth t are in the growth stage of their cycle typically t through debt by borrowing money to grow fas

21、ter. t arises with method t the revenues of growth firms are typically unstable and unproven. such, ahigh debtloadisusually not (6) Market Market conditions can have a significant impact on a companys capital-condition. e firm needs to borrow funds for a new plant. If the market struggling, meaning

22、market concerns, t investors are limiting companies ac erest rate to borrow may be highers to capital because of n a company would to pay. t situation, it may be prudent for a company to wait until conditions return to a more normal se before the company tries to ac the plant.s funds Topic4: Dividen

23、dPayment, some lysts t the consideration of a dividend policy irrelevantbecauseinvestorshavetheabilityto createhomemadeThesecondargumentclaims t little to no dividend payout is more favorable In ition to these two arguments is the t a high dividend payout important for investors because dividends pr

24、ovide y about the lwell-Dividendpayoutsfollowaset procedureasDeclarationDeclaration date is the announcementt the companys board of directors approved the payment of the dividend.Ex-DividendThe ex-dividend date is the date on which investors are cut rom receiving dividend. If for le, an investor pur

25、chases a stock on the ex-dividend investor will not receive the dividend. This dividend. If for le, an investor purchases a stock on the ex-dividend investor will not receive the dividend. This date is two business days before the holder-of-record date.Holder-of-RecordThe holder-of-record (owner-of-

26、record) date is the date on which the stockholders who are to receive the dividend are recognized.PaymentLast is the payment date, the date on which the actual dividend is paid out to the stockholders of record.2.DividendPayment Now, should the company decide tofollow eitherthe high or lowdividend m

27、ethod, it would use one of three main approaches: residual, stability or a hybrid n the (1) Companies using the residual dividend policy choose to rely generated equity to finance any new projects. As a result, dividend payments can come out of the residual or leftover equity only after all project

28、capital requirements are These companies usually attempt to ain heir debt/equity ratios making any dividend distributions, which t they decide on only if there is enough money left over after all operating and expan (2) expenses The fluctuation of dividends created by the residual policy significant

29、ly contrasts with the y of the dividend stability policy. With the stability policy, may choose a cyclical t sets dividends at a fixed fraction of earnings, or it may choose a stable policy whereby quarterly dividends are set at a fraction of yearly earnings. In either case, the dividend stability p

30、olicys aim is reduce (3) yfor investorsandto providethem The final approach combines the residual and stable dividend policies. Using this approach, companies tend to view the debt/equity ratio as a long-term n short-term odays markets, this approach is commonly used by tpay dividends. As these comp

31、anies generally experience business cycle fluctuations, they will generally have one set dividend, which is established as a relatively portion of e and can be easily ained. On top of this set these companies will offer another extra dividend paid only when general levels.e Topic5: TheDividend1.Divi

32、dendIrrelevanceMuch like their work on the capital-structure irrelevance ition, and Miller also t, with no taxes or ruptcy costs, dividend policy alsoirrelevant.Thisisknownasthe dividend-irrelevance theory, t isno effectisno effectfromdividendson acompanyscapitalstructure or stock MMs dividend-irrel

33、evance theory says t investors can affect their return on a stock regardless of the stocks dividend. For ex le, sup e, from an , t a companys dividend is too big. t investor could then buy more stock with the dividend t is over the investors expec ions. Likewise, if, from an , a companys dividend is

34、 too small, an investor could sell some of the companys stock to replicate the cash flow he or she expected. As such, the dividend is irrelevant to investors, meaning investors care little about a companys dividend policy since they can simulate their own.Bird- he-Hand Bird in hand is a theoryidends from a stock to potential capital gains because of the inherent uncerta y of the latter. Based on the adage a bird in the hand is worth two in the bush, the bird-in-hand theory s es investors prefer the certa y of dividend payments to the sibility of subs