advanced corporate finance 习题 香港大学.pdf

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1、TheUniversityofHongKongSchoolofEconomicsandFinanceFINA0304/FINA2312—AdvancedCorporateFinanceExtraPracticeQuestions1.Supposethatafirmhasassetsinplacewhichgenerate$100millioningoodstateand$50millioninbadstate,whereeitherstateisequallylikelytooccur.Thefirmhasou

2、tstandingdebtwithpromisedpaymentsof$50million.Aninvestmentproject,whichrequires$10millionandyieldsariskycashflowof$11millioninthegoodstateandzerointhebadstate,isnowavailabletothefirm.Supposethattheexistingdebthasnocovenantrestrictingthefirmtoissueseniordebtt

3、oraiseadditionalfunds.Assumezerorisklessrateofinterestanduniversalriskneutrality.(a)Ifthefirmhastoissueequitytoexistingshareholders,wouldthefirmoptimallychoosetoundertaketheprojectgiventhatitsobjectiveistomaximizeshareholders’wealth?Why?(b)Ifthefirmhastoissu

4、edebtjuniorthantheexistingdebt,wouldthefirmoptimallychoosetoundertaketheprojectgiventhatitsobjectiveistomaximizeshareholders’wealth?Why?(c)Ifthefirmhastoissuedebtwiththesameseniorityastheexistingdebt,wouldthefirmoptimallychoosetoundertaketheprojectgiventhati

5、tsobjectiveistomaximizeshareholders’wealth?Why?(d)Ifthefirmhastoissuedebtseniorthantheexistingdebt,wouldthefirmoptimallychoosetoundertaketheprojectgiventhatitsobjectiveistomaximizeshareholders’wealth?Why?2.Considerafirmthatinvestorsbelieveisoneoftwotypes,goo

6、dorbad,withequalprobability.Informationisasymmetricinthatmanagersofthefirmknowwithcertaintythetruetypeofthefirm.Thefirmhasaccesstoaprojectwhichrequiresanimmediateinvestmentof$1million.Theobjectiveofthemanagersistomaximizetheintrinsicvalueoftheexistingshareho

7、lders’claims.thecashflowdistributionofthefirm,contingentonitsinvestmentdecisionandtype,arepresentedbelow:GoodBadAsset-in-place$1.25million$1millionProject$1.2million$1.1millionSupposethatallagentsareriskneutral(i.e.,theyonlycareaboutexpectedvalue)andtheriskl

8、essrateofinterestis5%.Ifthefirmislimitedtoequityfinancing,shoulditgoaheadwiththeproject?Why?