公司税务与债务政策管理研讨(ppt 60页)（英文版）

公司税务与债务政策管理研讨内容提要：
Review
Pre Mid-Term --> Debt vs. Equity overview
Last Lecture (Ch 17) reintroduced these topics
Now - We will begin to add real world complexities.
Topics Covered
Debt and Value in a Tax Free Economy
Corporate Taxes and Debt Policy
Cost of Financial Distress
Explaining Financial Choices
M&M (Debt Policy Doesn’t Matter)
Modigliani & Miller
When there are no taxes and capital markets function well, it makes no difference whether the firm borrows or individual shareholders borrow.  Therefore, the market value of a company does not depend on its capital structure.
M&M (Debt Policy Doesn’t Matter)
Assumptions
By issuing 1 security rather than 2, company diminishes investor choice.  This does not reduce value if:
  Investors do not need choice, OR
  There are sufficient alternative securities
Capital structure does not affect cash flows e.g...
No taxes
No bankruptcy costs
No effect on management incentives
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