Debt-EquityChoice企业资本结构选择PPT文档格式.ppt

1、Debt-Equity ChoicePlaying Games with Taxes and IncentivesTypes of Debt Financing1.Bank loans2.Leases3.Commercial Paper4.Corporate BondsBank LoansLine of creditAn arrangement between a bank and a firm that requires the bank to quote an interest rate,typically for a short-term loan,when the firm reque

2、sts the loan.The bank authorizes the maximum loan amount when setting up the line of credit.Loan commitmentAn arrangement that requires a bank to lend up to a maximum prespecified loan amount at a prespecified interest rate at the firms request as long as the firm meets the requirements established

3、when the commitment was drawn up.There are two types of loan commitments:#Revolver,in which funds flow back and forth between the bank and the firm without any predetermined schedule.Funds are drawn from the revolver whenever the firm wants them,up to the maximum amount specified.They may be subject

4、 to an annual cleanup in which the firm must retire all borrowings.Nonrevolving loan commitment in which the firm may not pay down the loan and then subsequently increase the amount of borrowing.LeasesA debt instrument in which the owner of an asset,the lessor,gives the right to use the asset to ano

5、ther party,the lessee,in return for a set of contractually fixed payments.Operating lease:#An agreement,usually short term,allowing the lessee to retain the right to cancel the lease and return the asset to the lessor.Financial lease（or capital lease）:#An agreement that generally extends over the li

6、fe of the asset and indicates that the lessee cannot return the asset except with substantial penalties.Leveraged lease（asset purchase financed by a third party）,Direct lease（asset purchase financed by the manufacturer of the asset）,and Sale and leaseback（asset purchased from the lessee by the lesso

7、r）.Commercial PaperCommercial paper is a contract by which a borrower promises to pay a prespecified amount to the lender of the commercial paper at some date in the future,usually one to six months.This prespecified amount is generally paid off by issuing new commercial paper（rollover）.Typically on

8、ly available to very large companies with very high credit ratings.These contracts are typically traded in public markets and carry very low interest rates.Corporate BondsBonds are tradable fixed-income securities.Always have a face amount of$1,000.Nearly always have semi-annual coupon payments.Coup

9、on rate equals the sum of the two semi-annual payments divided by 1,000.If the coupon rate is 6%the bond pays$30 every six months.The 6%represents（30+30）/1000.Generally issued at with a coupon rate so that the bond sells for$1,000 in the open market.This is known as selling at“par.”The initial coupo

10、n rate is typically set by the syndicate desk of the investment bank,which issues the bonds to its（largely institutional）clients.Deciphering Bond QuotesBond prices are quoted per$100 of face value（that is 1/10th of their true value）.A bond sells for par if its quoted price is 100.A bond sells at a p

11、remium if its quoted price is above 100.A bond sells at a discount if its quoted price is below 100.Quotes and Accrued InterestBond prices are quoted net of accrued interest.Accrued interest is the amount of interest the current owner has“accrued”since the last coupon payment.If the accrued interest

12、 on a bond is$4,and the quote is$98,then it will cost you$102 per$100 of face amount you buy.In other words a single bond will run you$1,020.Calculating Accrued InterestCorporate bonds accrue interest on a 30 day/360 day year rate.Why?#Because it has always been so.Actually,due to the fact that bond

13、s have been around a lot longer than the calculator.Go ahead try to divided say 6.25 by 365 and then multiply by 14 by hand.Accrued Interest CalculationFormulaCoupon payment of$C.Last payment at date t0.Today is date t.Accrued Interest=C（t-t0）/180.Note that half a year has only 180 days!#What About

14、the 5 or 6“Extra”Days?#So you noticed a year has more than 360 days.What to do?#Since all months are assumed to have 30 days this means that the accrued interest on August 31 and September 1 will be the same.Example:#Bond pays coupons on January 15 and July 15.On March 15 two months have passed and

15、the accrued interest equals C（60/180）.Even February is assumed to have 30 days!#On March 31 the accrued interest is C（75/180）and on April 1 it is C（75/180）.Secondary Market in Corporate BondsThe secondary market for corporate debt is largely a broker-dealer market.Secondary market makers off to buy

16、and sell particular bonds.Quoted prices are better thought of as“ads”saying a dealer is here and ready to trade the bond.To get a price at which you can trade you need to actually call the market maker.Yes,as in pick up a telephone and call.A few corporate bonds are also traded on exchanges（see the New York Bond Exchange listing in the WSJ）.But the market is limited to very small retail orders,generally of 10 bonds or less.Most corporate bonds are not actively traded anywhere.Bond CovenantsEquity holders