課程名稱︰財務管理
課程性質︰必修
課程教師︰何憲章
開課學院：管理學院
開課系所︰財金系
考試日期（年月日）︰2008/01/10
考試時限（分鐘）：2:20 p.m. ~ 5:20 p.m.
是否需發放獎勵金：是
（如未明確表示，則不予發放）
試題 :
Note: Answer to the 4th decimal point, and list your calculation procedures.
1. A firm considers to purchase a $140,000 machine, which is expected to
generate annual sales revenue of $200,000. Cost of goods sold will be 80% of
sales revenue, and the firm's before tax cost of debt Kd is 15%. Suppose the
firm's all-equity cost of capital K0 is 20%, but now the firm plans to raise
debt to maintain the target debt-to-value ratio (D/V) at 50%. The firm's tax
rate is 40%.
(1) By traditional NPV method, calculate the NPV for the all-equity firm.
(2) By Adjusted Present Value Approach, calculate the APV for the leveraged
firm.
(3) By Flow-to-Equity Approach, calculate the NPV for the leveraged firm.
(4) By Weighted Average Cost of Capital Approach, calculate the NPV for the
leveraged firm.
2. A firm considers to purchase a $80,000 machine which will be depreciated by
acceleration method to zero over its 5-year life with annual depreciation
rates of 0.25, 0.22, 0.20, 0.18, and 0.15 respectively. A leasing firm
offers annual leasing payment of $20,000 over 5 years. If the firm's cost of
debt Kd is 10%, and its marginal tax rate is 30%, then by Incremental NPV
method.
(1) What is the Incremental NPV for the Buy-vs-Lease project? Should it buy
or lease?
(2) What is the break-even annual leasing payment L*?
3. (1) A firm issued 50 company warrants, each of which gives the holder the
right to subscribe 2 common stock shares at the price of $16 per share.
The firm has 100 shares of outstanding common stock with current market
price of $20 per share. Suppose it is an all-equity firm and all the
warrants will be exercised, the after the exercise, what is the value
per share of the common stock?
(2) A firm's convertible bond (CB) is due in 10 years with face value of
$1,000, and annual coupon rate of 5%. Its current market price is $900
with 8% yield to maturity. Its conversion ratio was 25 common stock
shares per one convertible bond. If the firm's current market price of
common stock is $35 per share, the what is the CB's
(i) Bond Value?
(ii) Conversion Price?
(iii) Conversion Value?
(iv) Option Value?
4. Before the Merger & Acquisition (M&A), A Company has 100 shares with $100
per share, B Company has 30 shares with $15 per share. After M&A, estimated
value of the combined company is $11,000.
(1) If A Company prepares to buy B Company's stock at $20 cash per share,
then
(i) What is the NPV of Merger? Should it merge?
(ii) After M&A, what's the real value per share of A Company's
original stock holder?
(2) If A Company prepares to exchange B Company's stocks by issuing new
shares, and estimated total value of B Company is $600, then
(i) How many new shares will A Company issue?
(ii) What's the fair exchange ratio beta of B Company?
(iii) After M&A, what's the real value per share of A Company's
original stock holder?
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