资本成本管理与资本预算英文版).ppt

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1、ChapterOutline12.1TheCostofEquityCapital12.2EstimationofBeta12.3DeterminantsofBeta12.4ExtensionsoftheBasicModel12.5EstimatingInternationalPaper’sCostofCapital12.6ReducingtheCostofCapital12.7SummaryandConclusionsWhat’stheBigIdea?Earlierchaptersoncapital

2、budgetingfocusedontheappropriatesizeandtimingofcashflows.Thischapterdiscussestheappropriatediscountratewhencashflowsarerisky.Investinproject12.1TheCostofEquityCapitalFirmwithexcesscashShareholder’sTerminalValuePaycashdividendShareholderinvestsinfinanc

3、ialassetBecausestockholderscanreinvestthedividendinriskyfinancialassets,theexpectedreturnonacapital-budgetingprojectshouldbeatleastasgreatastheexpectedreturnonafinancialassetofcomparablerisk.Afirmwithexcesscashcaneitherpayadividendormakeacapitalinvestm

4、entTheCostofEquityFromthefirm’sperspective,theexpectedreturnistheCostofEquityCapital:Toestimateafirm’scostofequitycapital,weneedtoknowthreethings:Therisk-freerate,RFThemarketriskpremium,Thecompanybeta,ExampleSupposethestockofStansfieldEnterprises,apubl

5、isherofPowerPointpresentations,hasabetaof2.5.Thefirmis100-percentequityfinanced.Assumearisk-freerateof5-percentandamarketriskpremiumof10-percent.Whatistheappropriatediscountrateforanexpansionofthisfirm?Example(continued)SupposeStansfieldEnterprisesisev

6、aluatingthefollowingnon-mutuallyexclusiveprojects.Eachcosts$100andlastsoneyear.ProjectProjectbProject’sEstimatedCashFlowsNextYearIRRNPVat30%A2.5$15050%$15.38B2.5$13030%$0C2.5$11010%-$15.38UsingtheSMLtoEstimatetheRisk-AdjustedDiscountRateforProjectsAnal

7、l-equityfirmshouldacceptaprojectwhoseIRRexceedsthecostofequitycapitalandrejectprojectswhoseIRRsfallshortofthecostofcapital.ProjectIRRFirm’srisk(beta)5%GoodprojectsBadprojects30%2.5ABC12.2EstimationofBeta:MeasuringMarketRiskMarketPortfolio-Portfolioofal

8、lassetsintheeconomy.Inpracticeabroadstockmarketindex,suchastheS&PComposite,isusedtorepresentthemarket.Beta-Sensitivityofastock’sreturntothereturnonthemarketportfolio.12.2EstimationofBetaTheoretically,thecalculationofbetaisstraightforwar