財(cái)會考試財(cái)務(wù)管理-第十六章課件

1、Ch. 16-1: Term Loans and LeasesCh. 16-1: Term Loans and LeasTerm LoansCharacteristics of Term LoansSecured loans1- to 10-year maturityRepaid in periodic installmentsTerm LoansCharacteristics of TTerm LoansCollateral for shorter loansChattel mortgage (mortgage on machinery and equipment)Collateral fo

2、r longer loansmortgages on real estateTerm LoansCollateral for shortTerm LoansRestrictive Covenants on BorrowersWorking capital - borrower may be required to set a minimum current ratio.Restrictions on additional borrowing.Borrower provides periodic financial statements.Restrictions on management ch

3、anges.Term LoansRestrictive CovenantTerm LoansEurodollar LoansLoans by major international banks based on foreign deposits denominated in dollars.Adjustable interest rates based on the London Interbank Offered Rate (LIBOR).Term LoansEurodollar LoansLeasesLesseeAcquires the services of a leased asset

4、, by making a series of payments to the owner of the asset.LessorThe owner of the asset that is being leased to the lessee.LeasesLesseeLeasingTypes of LeasesDirect Lease - a firm acquires the services of an asset that it didnt previously own.Sale and Leaseback - Assets owner sells the asset to a buy

5、er, and then leases the asset from the buyer.Leveraged Lease - Lessor borrows from a lender to buy the asset that will be leased to the lessee.LeasingTypes of LeasesLease vs. PurchaseIssue: Should a firmPurchase an asset using the firms optional financing mix, orFinance the asset using a financial l

6、ease.Lease vs. PurchaseIssue: ShouLease vs. PurchaseProcedure:1) Compute NPV to determine if the asset should be purchased.Lease vs. PurchaseProcedure:Lease vs. PurchaseProcedure:1) Compute NPV to determine if the asset should be purchased.NPV = - IO ACFt(1 + k)t nt=1SLease vs. PurchaseProcedure:NPL

7、ease vs. PurchaseProcedure:2) Compute NAL (net advantage to leasing) to determine leasing the asset is better for the firm than purchasing.Lease vs. PurchaseProcedure:O = operating cash flows if purchasedR = annual rental cost T = marginal tax rateI = interest expense forfeited if leasedD = deprecia

8、tion expense Vn = after-tax salvage valuek = discount rate IO = purchase pricerb = after-tax interest rate on borrowed funds.Ot (1-T) - Rt (1-T) - T(It) - T(Dt) (1 + rb)t Vn (1+ks)n NAL = - + IO nt=1SO = operating cash flows if puLeasing vs. Debt Financing:Potential Benefits1) Flexibility and Conven

9、ienceLeases are easier, quicker and require less documentation.Leases are easier to have approved than capital budgeting projects.Leasing simplifies bookkeeping for tax purposes.Leasing allows synchronization of lease payments with the firms cash cycle.Leasing avoids the problems of ownership.Leasin

10、g vs. Debt Financing:PoLeasing vs. Debt Financing:Potential Benefits2) Lack of RestrictionsLeases usually do not have protective restrictions.3) Avoiding Risk of Obsolescence?Not really - only in cancelable operating leases.4) Conservation of Working CapitalLeases usually have a lower initial outlay

11、 than a purchase.Leasing vs. Debt Financing:PoLeasing vs. Debt Financing:Potential Benefits5) 100% Financing?Leases usually do not require a down payment.6) Tax SavingsLeases may provide a larger tax shield than that provided by depreciation.7) Ease of Obtaining CreditIt is often easier for riskier

12、firms to obtain a lease than to obtain debt financing.Leasing vs. Debt Financing:PoCh. 16 -2: Corporate Restructuring:Combinations and DivestituresCh. 16 -2: Corporate RestruCorporate Restructuring1960s - Mergers of unrelated firms formed huge conglomerates.1980s - Investors purchased conglomerates

13、and sold off the pieces as independent companies.1990s - Strategic mergers of related firms to create synergies.Corporate Restructuring1960s -Possible Benefits of MergersEconomies of Scaleex: reduce administrative expenses as a percentage of sales.Tax Benefitsex: target firm has tax credits from ope

14、rating losses, and lacks the income to use the credits.Unused Debt Potentialex: merging with a firm that has little debt increases debt capacity.Possible Benefits of MergersEcPossible Benefits of MergersComplementarity in Financial Slackex: a cash-poor firm merging with a cash-rich firm will be able

15、 to accept more positive NPV projects.Removal of Ineffective Managersex: ineffective target firm managers may be replaced, increasing the value of the target firm.Possible Benefits of MergersCoPossible Benefits of MergersIncreased Market Powerex: merging may increase monopoly power, but too much may

16、 be illegal.Reduction in Bankruptcy Costsex: merger may improve financial condition of the combined firm, reducing direct and indirect costs of financial distress.Possible Benefits of MergersInDetermination of Firm Value1) Book value: assets minus liabilities on the balance sheet. Book value is base

17、d on historical cost minus accumulated depreciation.2) Appraisal value: firm value is estimated by an independent appraiser. This estimate is often based on the firms replacement cost.Determination of Firm Value1) Determination of Firm Value3) Chop-shop or Break-up value: determines if multi-industr

18、y firms would be worth more if separated into their parts. Firms are valued by their business segments. Determination of Firm Value3) Determination of Firm Value4) Free Cash Flow or “Going Concern” value steps:Estimate the target firms free cash flows.Estimate the target firms after-tax risk-adjusted discount rate.Calculate the present value of the target firms free cash flows.Estimate the initial outflow of the acquisition.Calculate the NPV of the acquisition.Determination of Firm Value4) DivestituresDivestiture - Eliminating a division or subsidiary that does not fit strategically with th