文档介绍：Irwin/McGraw-Hill
Chapter 13
Fundamentals of Corporate Finance
Third Edition
An Overview of Corporate Financing
Brealey Myers Marcus
slides by Matthew Will
Irwin/McGraw-Hill
The McGraw-panies, Inc.,2001
Topics Covered
Common Stock
Preferred Stock
Corporate Debt
Convertible Securities
Patterns of Corporate Financing
Common Stock
Treasury Stock
Stock that has been repurchased by pany and held in its treasury
Issued Shares
Shares that have been issued by pany.
Outstanding Shares
Shares that have been issued by pany and held by investors.
Common Stock
Authorized Share Capital
Maximum number of shares that pany is permitted to issue, as specified in the firm’s articles of incorporation.
Par Value
Value of security shown on certificate.
Retained Earnings
Earnings not paid out as dividends.
Common Stock
Book Value vs. Market Value
Book value is a backward looking measure. It tells us how much capital the firm has raised from shareholders in the past. It does not measure the value that shareholders place on those shares today. The market value of the firm is forward looking, it depends on the future dividends that shareholders expect to receive.
Common Stock
Example - . Heinz Book Value vs. Market Value (4/99)
Total Shares outstanding = 358 million
Common Stock
Example - No-name News can be established by investing $10 million in a printing press. The newspaper is expected to generate a cash flow of $2 million a year for 20 years. If the cost of capital is 10 percent, is the firm’s market or book value greater?
Common Stock
Example - No-name News
Preferred Stock
Preferred Stock - Stock that takes priority mon stock in regards to dividends.
Net Worth - Book value mon shareholder’s equity plus preferred stock.
Floating-Rate Preferred - Preferred stock paying dividends that vary with short term interest rates.