📖 公司金融模块终测（15 题）

Corporate Finance

I. Lesson Focus

This final module assessment integrates all key topics in Corporate Finance: capital budgeting decision rules, cost of capital, capital structure theory, dividend policy, corporate governance mechanisms, and mergers and acquisitions. Candidates must demonstrate the ability to apply formulas, resolve conflicts between decision rules, identify agency problems, and evaluate real-world financial policy choices under CFA Level I standards.

II. The Problem

A manufacturing firm must simultaneously decide which mutually exclusive capital projects to accept, whether to increase leverage to lower its WACC, whether to maintain a stable dividend or switch to a residual dividend policy amid slowing earnings growth, and how to address governance weaknesses through potential acquisitions. This lesson delivers a comprehensive 15-question review that tests and reinforces every major concept, formula, and pitfall in the Corporate Finance curriculum, ensuring candidates can make rapid, accurate decisions on exam day.

III. Capital Budgeting Framework and Decision Rules

Capital budgeting evaluates whether long-term investment projects create shareholder value. The primary methods are Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period, and Profitability Index (PI).

Net Present Value (NPV) is the theoretically superior rule:
$NPV = \sum_{t=0}^{n} \frac{CF_t}{(1+r)^t}$
Accept if NPV > 0; for mutually exclusive projects, select the one with the highest NPV.

Internal Rate of Return (IRR) is the discount rate that sets NPV = 0. Accept if IRR > required return (r). However, IRR suffers from multiple-IRR problems and reinvestment-rate assumptions. It can conflict with NPV in ranking mutually exclusive projects of different sizes or cash-flow timing.

Payback Period is simple but ignores the time value of money and all cash flows beyond the payback cutoff. Discounted Payback improves this but remains inferior to NPV.

Profitability Index (PI) = PV of future cash flows / Initial investment. Useful under capital rationing; accept projects with PI > 1.

IV. Capital Structure Theories and Optimal Capital Structure

Modigliani-Miller (MM) propositions provide the theoretical foundation.

• MM Proposition I (no taxes): Firm value is independent of capital structure: $V_L = V_U$.
• MM Proposition II (no taxes): $r_e = r_0 + (r_0 - r_d) \times \frac{D}{E}$; cost of equity rises linearly with leverage.
• With corporate taxes: $V_L = V_U + t_c D$; the debt tax shield increases firm value.
• With financial distress costs: An optimal capital structure exists that minimizes WACC.

Weighted Average Cost of Capital (WACC) formula:
$WACC = w_e \times r_e + w_d \times r_d \times (1 - t_c)$
Weights must be target capital-structure weights based on market values.

V. Dividend Policy and Share Repurchases

MM dividend irrelevance theorem states that, in perfect capital markets, dividend policy does not affect firm value.

Real-world considerations include: - Signaling theory: Dividend increases convey management’s confidence in future earnings. - Agency-cost theory: Higher dividends reduce free-cash-flow misuse by managers. - Tax-differential theory: Because dividends are often taxed at higher rates than capital gains, firms prefer lower payout ratios.

Residual dividend policy: The firm first funds all positive-NPV projects consistent with its target capital structure; only leftover earnings are paid as dividends. This produces volatile dividends.

In perfect markets, share repurchases and cash dividends are economically equivalent, but repurchases often enjoy tax advantages and flexibility.

VI. Corporate Governance and Agency Problems

Primary agency conflicts are: 1. Between shareholders and managers (moral hazard, perquisite consumption, empire building). 2. Between shareholders and debtholders (asset substitution, underinvestment, claim dilution).

Governance mechanisms include independent boards, equity-based compensation, threat of hostile takeovers, creditor monitoring, and institutional investor activism. Stakeholder theory expands fiduciary duty beyond shareholders to creditors, employees, and customers.

VII. Mergers and Acquisitions

Merger motives include operating synergies, financial synergies, diversification, tax savings, and control premiums.

Merger types: - Horizontal: same industry competitors. - Vertical: supply-chain partners. - Conglomerate: unrelated businesses.

Valuation approaches: comparable-company multiples (P/E, EV/EBITDA), precedent-transaction analysis, and discounted cash flow (DCF).

Common hostile-takeover defenses: poison pills, white knights, crown-jewel provisions, and golden parachutes.

Empirical evidence shows target shareholders capture most of the synergy gains; acquirers frequently earn zero or negative NPV due to overpayment.

Worked Cases

Case 1: NPV–IRR Conflict in Mutually Exclusive Projects

Project A: Initial outlay $1.0 million, $0.3 million annual cash flow for 5 years, required return 10%.
Project B: Initial outlay $1.5 million, $0.42 million annual cash flow for 5 years.

Calculations:
- NPV_A = –1.0 + 0.3 × (1 – 1.1⁻⁵)/0.1 = $0.1372 million
- NPV_B = –1.5 + 0.42 × (1 – 1.1⁻⁵)/0.1 = $0.0921 million
- IRR_A ≈ 15.0%, IRR_B ≈ 12.4%

Decision: Although Project B has a higher IRR, NPV correctly ranks Project A superior. This illustrates the classic reinvestment-rate and scale conflict; always prefer NPV for mutually exclusive choices.

Case 2: Tax Shield and Optimal Capital Structure

Unlevered firm value $V_U$ = $80 million, tax rate 25%. Issuing $40 million perpetual debt at 6% creates a tax shield of $40 × 0.25 = $10 million.
Thus $V_L$ = $80 + $10 = $90 million.
If expected present value of financial distress costs equals $3 million, optimal firm value becomes $87 million. Optimal debt ratio ≈ 46% ($40/$87), at which WACC is minimized.

Case 3: Residual Dividend Policy Calculation

Current net income = $120 million. Target capital structure is 60% equity, 40% debt. Next year’s capital budget = $200 million.
Equity financing need = $200 × 0.60 = $120 million.
Residual earnings available for dividends = $120 – $120 = $0 → dividend payout ratio = 0%.
If capital spending next year falls to $100 million, equity need drops to $60 million, residual of $60 million can be paid out, producing a 50% payout ratio. The policy therefore creates highly volatile dividends.

Traps

Key Formulas

• $NPV = \sum \frac{CF_t}{(1+r)^t} - CF_0$
• IRR solves $NPV = 0$
• $WACC = \frac{E}{V}r_e + \frac{D}{V}r_d(1-t_c)$
• $V_L = V_U + t_cD - PV(\text{financial distress costs})$
• $r_e = r_0 + (r_0 - r_d)\frac{D}{E}$ (no taxes)
• Sustainable growth rate $g = ROE \times (1 - \text{payout ratio})$
• Profitability Index $PI = \frac{\text{PV(future CF)}}{\text{Initial investment}}$
• In perfect markets, share repurchases and dividends are equivalent

Practice Questions

Q1. Under capital rationing, the best capital-budgeting decision criterion is:
A. NPV
B. IRR
C. Profitability Index (PI)
D. Payback period

Q2. According to MM Proposition I with corporate taxes, adding debt will:
A. Decrease firm value
B. Increase firm value due to the tax shield
C. Leave firm value unchanged
D. Depend only on changes in cost of equity

Q3. Which factor is most likely to encourage a low-dividend policy?
A. Strong signaling needs
B. Higher personal tax rate on dividends than on capital gains
C. Severe agency conflicts between managers and shareholders
D. Large free-cash-flow balances

Q4. A project has IRR = 12%, WACC = 10%, yet NPV is negative. The most likely reason is:
A. Multiple IRRs exist
B. Different reinvestment-rate assumptions
C. Project size is much larger than the firm’s average project
D. Sunk costs were incorrectly included

Q5. In corporate governance, a “poison pill” is primarily used to:
A. Motivate management
B. Defend against hostile takeovers
C. Reduce agency costs
D. Increase the debt tax shield

Q6. The most appropriate weights for WACC are based on:
A. Book values
B. Target capital structure using market values
C. Current market values only
D. Historical average weights

Q7. The main disadvantage of a residual dividend policy is:
A. Unstable dividend payments
B. Increased agency costs
C. Loss of tax-shield benefits
D. Higher WACC

Q8. Acquirers frequently fail to earn positive NPV in mergers mainly because:
A. Synergies are systematically overestimated
B. Competition drives the offer price so high that most gains accrue to target shareholders
C. Integration costs always exceed forecasts
D. Regulators prohibit value-creating deals

Answers

Takeaways

• NPV remains the gold-standard capital-budgeting rule; IRR is acceptable only for independent project screening.
• Corporate taxes create a debt tax shield that increases firm value, but optimal leverage balances this against bankruptcy costs.
• Dividend policy reflects the interplay of signaling, agency-cost reduction, and tax considerations.
• Effective corporate governance mitigates both manager–shareholder and shareholder–debtholder agency conflicts.
• In mergers, synergy is often overestimated and most gains are captured by target shareholders through competitive bidding.
• Always compute WACC using target market-value weights; never substitute book values.