Part 4 Capital structure and Dividend polic
Part 4 Capital structure and Dividend policy
Outline of this part If a firm seeks to create value with its financing decisions, the firm must find positive NPv financial arrangements. We will show that the sources of NPV in financing are taxes bankruptcy, and agency costs This part is composed by six chapters like Chapter 13 Corporate financing decisions and efficient capital markets Chapter 14 Long-term financing: an introduction Chapter 15 Capital structure: basic concepts Chapter 16 capital structure: limits to the use of debt Chapter 17 valuation and capital budgeting for the levered firm Chapter 18 Dividend policy: why does it matter?
Outline of this part If a firm seeks to create value with its financing decisions, the firm must find positive NPV financial arrangements. We will show that the sources of NPV in financing are taxes, bankruptcy, and agency costs. This part is composed by six chapters like : Chapter 13 Corporate financing decisions and efficient capital markets Chapter 14 Long—term financing: an introduction Chapter 15 Capital structure: basic concepts Chapter 16 Capital structure: limits to the use of debt Chapter 17 Valuation and capital budgeting for the levered firm Chapter 18 Dividend policy: why does it matter?
Part 4 Capital structure and D Lviaena policy Chapter 13 Corporate- financing decisions and ECM
Part 4 Capital structure and Dividend policy Chapter 13 Corporate—financing decisions and ECM
Chapter 13 Corporate financing decisions and ECM 5 In the past few parts, we have concentrated almost exclusively on the left-hand side of the balance sheet(the firms capital expenditure decisions), and now we move to the right-hand side and to the problems involved in financing the capital expenditures To put it crudely, you have learned hoe to spend money, now you must to learn how to raise it. Now we have not totally ignored financing in our discussion of capital budgeting. But we made the simplest possible assumption: all-equity financing
Chapter 13 Corporate— financing decisions and ECM • In the past few parts, we have concentrated almost exclusively on the left—hand side of the balance sheet(the firm’s capital expenditure decisions), and now we move to the right—hand side and to the problems involved in financing the capital expenditures. • To put it crudely, you have learned hoe to spend money, now you must to learn how to raise it. • Now we have not totally ignored financing in our discussion of capital budgeting. But we made the simplest possible assumption: all—equity financing
Chapter 13 Corporate financing decisions and ECM S What should we do for determine the best financing strategy Should the firm reinvest most of its earnings in the business, or should it pay them out as dividends? If the firm needs more capital, should it issue more stock or should it borrow? Should it borrow short-term or long-term Should it borrow by issuing a normal longterm bond or a convertible bond?
Chapter 13 Corporate— financing decisions and ECM • What should we do for determine the best financing strategy? – Should the firm reinvest most of its earnings in the business, or should it pay them out as dividends? – If the firm needs more capital, should it issue more stock or should it borrow? – Should it borrow short—term or long—term ? – Should it borrow by issuing a normal long—term bond or a convertible bond? ……………