《高级公司理财》PPT课件.ppt

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1、Why do companies go public?(Pagano,Panetta&Zingale,JF,1998),PurposeAnalyze ex-ante characteristics of IPO decisionsAnalyze ex-post consequences of IPO decisionsData11 years:1982-1992Compares firms eligible to go public vs firms went public 139 new listings on the Milan Stock ExchangeEliminated:bank,

2、insurance,financial companiesFinal sample:69 firms of which 29 are curve-outs,Some empirical predictions(See:Table II),Information asymmetry hypothesisThe probability of going public should be positively related with age,size of a firmFinancing constraint hypothesisThe probability of going public sh

3、ould be positively related with firms investments,leverage and growthDiversification hypothesisThe probability of going public should be positively related with the riskiness of a firm,Empirical Results,Determinants of IPO decision:Table IIIEffects of the IPO decision:Table IV,Ownership and Operatin

4、g performance of IPO firms(Mikkelson,Partch&Shah:JFE 1997),Going public represents a decline in the(owner)managers stakes in the firm.Agency theory predicts that there will be less alignment of shareholders interest with that of the managers.As such,firm performance will decline after IPO.,Empirical

5、 results,Managerial ownership declines substantially after IPO.Yet sizeable ownership stake remains.A significant decline in operating performance only in the first year of IPO,but not later on.Operating performance is unrelated to managerial ownership.Prediction of agency theory does not hold!Manag

6、ers continue to remain large shareholders Other mechanisms(incentive compensation,takeover threat,etc.)play a more important role after IPO than ownership stakes.,Capital Structure,How should a company choose its debt-equity mix that makes its total market value as large as possible?Do capital struc

7、ture changes matter?Why they matter?,Are capital structure decisions relevant?,Under the assumption of perfect capital market,capital structure decisions do not affect firm valueBut,when the assumptions are not met,firm value varies with changes in the debt-equity mixImperfections:Taxes,Financial di

8、stress costs,Agency costs,Asymmetric information,Empirical issues,How to measure capital structure?Which factors determine capital structure?Why firms choose to issue a particular security?What is the capital market reaction to the news of security offerings?How can we explain price reaction?Is subs

9、equent change in operating performance consistent with stock price change?,Ways to empirically investigate capital structure issues,Analyze capital structure patterns(Rajan et al.JF,1998)Relate capital structure to firm/industry/institutional characteristics(Rajan et al.JF,1998)Analyze the choice of

10、 capital structure decisions(Jung et al.,JFE,1997)Analyze the impact of capital structure decisions(Kabir and Roosenboom,JCF,2003),Balance Sheet of a firm,How do we define debt?,Comparing capital structure internationally,What do we know about capital structure?(Rajan and Zingales,JF,1995),Comparing

11、 capital structure across countries becomes difficult due to lack of consistent information:differences in accounting and financing methods.Three sources of differences in accounting practices:Not all countries require firms to report consolidated balance sheetsValuation of assets(at historical cost

12、s or current value)differSome items are included/not included in balance sheet:Lease;Funded/Unfunded pension liabilities;Provisions;etc.,Measures of Leverage,1.TL/TA Broadest definitionUS,UK have lower leverage than Eur.countriesIn market value terms,Japan is not more levered2.Debt(STD+LTD)/TAHere t

13、rade credit(non-debt liabilities)is not included;Lev looks lessGermany&UK have low levels of leverage in both BV and MV levels3.LTD/Total capital(LTD+Equity)Shows the effect of long-term financingNeither German and Japanese companies are very highly levered by US standard,Country specific features,G

14、ermany:Firms show pension liabilities on the Balance Sheet,but no offsetting entry on pension assets;Reserves are reported separately from equity;these do not cover specific obligations,but serves as“equity for a rainy day”-to offset future drop in earningsJapan:Large companies borrow and then lend

15、to suppliers and related companies(they have offsetting loans),Adjustments to country-specific features,Do these findings remain same after adjustments(of accounting practices)?Provisions for future liabilities are dubious;so add to equityPensions liabilities deduct these from assetsIntangible asset

16、s(goodwill from acquisitions)may exaggerate assets;so deduct from equityDeferred taxes may have to be considered as part of shareholder equity,Explaining capital structure differences,Capital structure of firms from different countries could be explained by taking into consideration the institutional differencesTaxes(corporate,personal,local taxes)Bankruptcy law(US going concern;UK,Germany creditor rights,premature liquidation)Financial system:Bank versus Market-based countries(private financing,bank as underwriter,bank as equity provider)Ownership structure(Large shareholders,Banks),