財務(wù)原理 雙語 chapter 1

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CorporateFinance1GradesAssignments(25%)Classparticipation(15%)Finalexam(60%)E-mail:yiwenw@163.com2Chapter1TheCorporationandtheFinancialManager3ObjectivesGiveexamplesoftheinvestmentandfinancingdecisionsthatfinancialmanagersmake,andexplaintheresponsibilitiesoftheCFO,treasurer,andcontrollerCitesomeoftheadvantagesanddisadvantagesoforganizingabusinessasacorporationExplainwhymaximizingmarketvalueisthelogicalfinancialgoalforthecorporationUnderstandwhyconflictsofinterestarise,especiallyinlarge,publiccorporationsExplainhowcorporationsmitigateconflictsandencourageethicalbehavior4ContentInvestmentandfinancingdecisionsWhatisacorporation?Whoisthefinancialmanager?Goalsofthecorporation5Investmentdecision:投資決策Financingdecision:籌資決策Capitalbudegtingdecision:資本預(yù)算決策Tangibleassets:有形資產(chǎn)Intangibleassets:無形資產(chǎn)Debtfinancing:債務(wù)資金、債務(wù)籌資Equityfinancing:權(quán)益資金、權(quán)益籌資Capitalstructure:資本結(jié)構(gòu)6Whatisfinance?Financecanbedefinedastheartandscienceofmanagingmoney.Corporationsfacetwobroadfinancialquestions:Whatinvestmentsshouldthefirmmake?Andhowshoulditpayforthoseinvestments?Thefirstquestioninvolvesspendingmoney;thesecondinvolvesraisingit.

Makinggoodinvestmentandfinancingdecisionsisthechieftaskofthefinancialmanager.7TheInvestmentDecisionInvestmentdecision

/capitalbudgetingdecision:decisiontoinvestintangibleorintangibleassetsInvestmentsinautomobileplantInvestmentsinresearchanddevelopment(R&D)8BalanceSheetModeloftheFirmCurrentAssetsFixedAssets1Tangible2IntangibleTotalValueofAssets:Shareholders’EquityCurrentLiabilitiesLong-TermDebtTotalFirmValuetoInvestors:9TheInvestmentDecisionCurrentAssetsFixedAssets1Tangible2IntangibleShareholders’EquityCurrentLiabilitiesLong-TermDebtWhatlong-terminvestmentsshouldthefirmchoose?10Ifaproject’svalueisgreaterthanitsrequiredinvestment,thentheprojectisattractivefinanciallyThefinancialmanagerhelpsthefirmtoinvestinprojectsthatareworthmorethantheycost.11TheFinancingDecisionFinancingdecision:theformandamountoffinancingofafirm’sinvestmentIssuesharesofstockborrowfromabank12TheFinancingDecisionHowshouldthefirmraisefundsfortheselectedinvestments?CurrentAssetsFixedAssets1Tangible2IntangibleShareholders’EquityCurrentLiabilitiesLong-TermDebt13ThechoicebetweendebtandequityfinancingisoftencalledthecapitalstructuredecisionHere“capital”referstothefirm’ssourcesoflong-termfinancing.Afirmthatisseekingtoraiselong-termfinancingissaidtobe“raisingcapital.”14CapitalStructureThevalueofthefirmcanbethoughtofasapie.Thegoalofthemanageristoincreasethesizeofthepie.TheCapitalStructuredecisioncanbeviewedashowbesttoslicethepie.Ifhowyouslicethepieaffectsthesizeofthepie,thenthecapitalstructuredecisionmatters.50%Debt50%Equity25%Debt75%Equity70%Debt30%Equity15Short-TermAssetManagementHowshouldshort-termassetsbemanagedandfinanced?NetWorkingCapitalShareholders’EquityCurrentLiabilitiesLong-TermDebtCurrentAssetsFixedAssets1Tangible2Intangible16Self-Test1.1Arethefollowingcapitalbudgetingorfinancingdecisions?Hint:Inonecasetheansweris“both”Inteldecidestospend$1billiontodevelopanewmicroprocessorVolkswagenborrows350millioneurosfromDeutscheBankBP(BritishPetroleum)

constructsapipelinetobringnaturalgasonshorefromaproductionplatformintheGulfofMexicoBudweiserspends200millioneurostolaunchanewbrandofbeerinEuropeanmarketsPfizerissuesnewsharestobuyasmallbiotechcompany17Financingandinvestmentdecisionsareseparatedand

connectedTheamountofinvestmentdeterminestheamountoffinancingthathastoberaisedTheinvestorswhocontributefinancingtodayexpectareturnonthatinvestmentinthefutureThus,theinvestmentsthatthefirmmakestodayhavetogeneratefuturereturnsforpayouttoinvestors18Tocarryonbusiness,corporationsneedanalmostendlessvarietyofrealassets.Manyoftheseassetsaretangible,suchasmachinery,factories,andoffices;othersareintangible,suchastechnicalexpertise,trademarks,andpatents.Allofthemneedtobepaidfor.Toobtainthenecessarymoney,thecorporationsellsclaimsonitsrealassetsandonthecashthoseassetswillgenerate.Theseclaimsarecalledfinancialassets

orsecurities.19Flowofcashbetweenfinancialmarketsandthefirm’soperations.

Key:

(1)Cashraisedbysellingfinancialassetstoinvestors;

(2)cashinvestedinthefirm’soperationsandusedtopurchaserealassets;

(3)cashgeneratedbythefirm’soperations;

(4a)cashreinvested;

(4b)cashreturnedtoinvestors.20Ultimately,thefirmmustbeacashgeneratingactivity.Thecashflowsfromthefirmmustexceedthecashflowsfromthefinancialmarkets21Self-Test1.2Whichofthefollowingarefinancialassets,andwhicharerealassets?ApatentAshareofstockissuedbyBankofNewYorkAblastfurnaceinasteel-makingfactoryAmortgageloantakenouttohelppayforanewhomeAfterasuccessfuladvertisingcampaign,potentialcustomersbelievethatyourbrandofpotatochipsisextracrispyAnIOU(Ioweyou)fromyourbrother-in-law22Howcanwecreatevaluethroughinvestmentandfinancingdecisions?23ContentInvestmentandfinancingdecisionsWhatisacorporation?Whoisthefinancialmanager?Goalsofthecorporation24Corporation:公司Stockholder/shareholder:股東Legalentity:法人實體Limitedliability:有限責(zé)任Theseparationofownershipandmanagement:所有權(quán)與經(jīng)營權(quán)相分離25CorporationCorporation:businessorganizedasaseparatelegalentityownedbystockholdersAcorporationislegallydistinctfromitsowners,thereforeconferslimitedliabilityTheseparationofownershipandmanagementisonedistinctivefeatureThereisanimportanttaxdrawback（欠缺，弊端）:doubletaxation26Theseparationofownershipandmanagementhasclearadvantages.Itallowsshareownershiptochangewithoutinterferingwiththeoperationofthebusiness.Itallowsthefirmtohireprofessionalmanagers.Butitalsobringsproblemsifthemanagers’andowners’objectivesdiffer.27FormsofBusinessOrganizationThecorporateformofbusinessi