Brealey Myers，公司金融原理 第七版PPT Chapter_17.pptVIP

Slides by Matthew Will Topics Covered Leverage in a Tax Free Environment How Leverage Affects Returns The Traditional Position MM (Debt Policy Doesn’t Matter) Modigliani Miller When there are no taxes and capital markets function well, it makes no difference whether the firm borrows or individual shareholders borrow. Therefore, the market value of a company does not depend on its capital structure. MM (Debt Policy Doesn’t Matter) Assumptions By issuing 1 security rather than 2, company diminishes investor choice. This does not reduce value if: Investors do not need choice, OR There are sufficient alternative securities Capital structure does not affect cash flows e.g... No taxes No bankruptcy costs No effect on management incentives No Magic in Financial Leverage Proposition I and Macbeth Leverage and Returns MM Proposition II MM Proposition II MM Proposition II Leverage and Risk Leverage and Returns WACC WACC WACC Example - A firm has $2 mil of debt and 100,000 of outstanding shares at $30 each. If they can borrow at 8% and the stockholders require 15% return what is the firm’s WACC? WACC Example - A firm has $2 mil of debt and 100,000 of outstanding shares at $30 each. If they can borrow at 8% and the stockholders require 15% return what is the firm’s WACC? WACC WACC (traditional view) WACC (MM view) 17- * McGraw Hill/Irwin Copyright ? 2003 by The McGraw-Hill Companies, Inc. All rights reserved Does Debt Policy Matter ? Principles of Corporate Finance Seventh Edition Richard A. Brealey Stewart C. Myers Chapter 17 McGraw Hill/Irwin Copyright ? 2003 by The McGraw-Hill Companies, Inc. All rights reserved Example - Macbeth Spot Removers - All Equity Financed MM (Debt Policy Doesn’t Matter) Expected outcome Example cont. 50% debt MM (Debt Policy Doesn’t Matter) Example - Macbeth’s - All Equity Financed - Debt replicated by investors MM (Debt Policy Doesn’t Matter) MMS PROPOSITION I If capital markets are doing their job, firms cannot in