BD_IM_c14

BD_IM_c14 - Chapter 14 Capital Structure in a Perfect...

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Chapter 14 Capital Structure in a Perfect Market I. Chapter Outline The chapter outline below is correlated to the Premium PowerPoint Lecture Slides. The Premium PowerPoint slides are referenced in bold . Alternative Examples to selected textbook examples are available in the Premium PowerPoint Lecture Slides. Alternative Examples are referenced in bold in the chapter outline below. 14.1 Equity Versus Debt Financing (Slide 6) • Financing a Firm with Equity (Slides 7–14) • Financing a Firm with Debt and Equity (Slides 15–21) • The Effect of Leverage on Risk and Return (Slides 22–29) • Example 14.1 Leverage and the Equity Cost of Capital (Slides 30–31) 14.2 Modigliani-Miller I: Leverage, Arbitrage, and Firm Value (Slides 32–34) • MM and the Law of One Price (Slide 35) MM and the Real World • Homemade Leverage (Slides 36–42) • Example 14.2 Homemade Leverage and Arbitrage (Slides 43–44) • The Market Value Balance Sheet (Slides 45–47) • Example 14.3 Valuing Equity When There Are Multiple Securities (Slides 48–49) • Application: A Leveraged Recapitalization (Slides 50–57) 14.3 Modigliani-Miller II: Leverage, Risk, and the Cost of Capital (Slide 58) • Leverage and the Equity Cost of Capital (Slides 58–66) • Example 14.4 Computing the Equity Cost of Capital (Slides 67–68) • Capital Budgeting and the Weighted Average Cost of Capital (Slides 69–73) Common Mistake: Is Debt Better Than Equity? • Example 14.5 Reducing Leverage and the Cost of Capital (Slides 74–75) Premium PowerPoint Alternative Example 14.5 (Slides 76–79) • Computing the WACC with Multiple Securities (Slide 80) • Example 14.6 WACC with Multiple Securities (Slides 81–82) • Levered and Unlevered Betas (Slides 83–85) • Example 14.7 Airline Betas (Slides 86–87) • Cash and Net Debt
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BD_IM_c14 - Chapter 14 Capital Structure in a Perfect...

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