融资与资本结构理论.pdf

The Theories of Medium/Long-term Financing Decision Capital Structure －Utilize capital markets to finance investment and create value 一. Financing Instruments • Equity financing instruments －Venture capital －Common Stock －Option-linked equity: Puttable common stock 一. Financing Instruments • Debt －Bank loan －Private debt －Public bonds －Fixed versus floating rate －Option-linked bonds: Puttable versus callable －Income bonds Debt Financing Instruments • Advantages of debt 1. Tax Benefit Higher tax rates －Higher tax benefit • Disadvantages of debt 1.Bankruptcy Cost: Higher business risk－ Higher cost 2. Loss of future financing flexibility Bonds Financing Instruments • Bonds Debenture －Rating: AAA －C －Sinking fund －Call or put right －Restrict on Investment, Financing and operation 一. Financing Instruments • Hybrid financing instruments －Preferred stock －Convertible instruments －Warrants 二. Capital Structure Theories • Financial Market Efficiency • Definition: A financial market is efficient when market price reflect all available information. “All available information ”includes: 1. Past price 2. All public information 3. All information including non-public (inside) information Financial Market Efficiency “ Prices reflect all available information ” means that financial transactions at market price,using the available information are zero NPV activities Financial Market Efficiency Stock price Overreaction Efficient market reaction Under or Delayed reaction Time 0 Financial Market Efficiency •