Bài giảng Chapter 3: financial statements, cash flow, and taxes presents of balance sheet, income statement, statement of cash flows, accounting income versus cash flow,MVA and EVA, personal taxes, corporate taxes.
Temporary difference: a difference between the carrying amount of an asset or liability and its tax base. ─ Taxable temporary difference: a temporary difference that will result in taxable amounts in the future when the carrying amount of the asset is recovered or the liability is settled. ─ Deductible temporary difference: a temporary difference that will result in amounts that are tax deductible in the future when the carrying amount of the asset is recovered or the liability is settled.
Our study investigates how ultimate ownership structure and the corporate tax rate affect the equilibrium trade-off relation between manager ownership and debt in reducing agency costs. Considering the presence of the controlling shareholder, we find that higher corporate tax
rates strengthen the trade-off relation between manager ownership and debt while higher
control rights held by the controlling shareholder weaken it as well as the strengthening effect
of corporate tax rate.
Strategic Corporate Finance provides a ‘‘real-world’’ application of the
principles of modern corporate finance, with a practical, investment
banking advisory perspective. Building on 15 years of corporate finance
advisory experience, this book serves to bridge the chronic gap between
corporate finance theory and practice. Topics range from weighted average
cost of capital, value-based management and M&A, to optimal capital
structure, risk management and dividend/buyback policy.
Business is based on at least four (4) factors: capital, labour, materials or services and entrepreneurship. Put another way, starting up and operating a business requires financing, manpower, product and the possibility of making a profit.
The fundamental structures are: the sole proprietor (one man operation), the partnership and the corporation. Corporations are established to avoid the personal liability of the persons operating the corporation and to gain tax advantages such as low corporate tax rates.
Strategic Corporate Finance provides a ‘‘real-world’’ application of the principles of modern corporate finance, with a practical, investment banking advisory perspective. Building on 15 years of corporate finance advisory experience, this book serves to bridge the chronic gap between corporate finance theory and practice. Topics range from weighted average cost of capital, value-based management and M&A, to optimal capital structure, risk management and dividend/buyback policy.
Transfer Pricing and Valuation in Corporate Taxation analyzes the
disparities between both federal statutes and regulations, and reg-
ulations and administrative practice, in a highly controversial area
of corporate tax policy: intra-company transfer pricing for tax pur-
poses. It addresses issues that often mean millions of dollars to indi-
vidual corporations, and a significant fraction of the federal govern-
ment’s revenue base.
The tax rules of the United States and of foreign countries affect multinational
corporations in a variety of ways. Researchers at the National Bureau of Eco-
nomic Research have been studying the impact of taxation on multinational
corporations for several years. From time to time, the results of this research
have been presented at NBER conferences and subsequently published in
NBER volumes. The papers in the current volume, which were presented at
such a conference in January 1994, were the result of studies during the previ-...
Tenth in a series of annual reports comparing business regulation in 185 economies, Doing Business 2013 measures regulations affecting 11 areas of everyday business activity: Starting a business Dealing with construction permits Getting electricity Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing c
In this chapter, we examine fi nancial statements, taxes, and cash flow. The goal of this chapter is to briefl y examine such statements and point out some of their more relevant features. This chapter pay special attention to some of the practical details of cash flow.
After studying this chapter in the lecture, you should be able to: Explain how financial leverage affects earnings per share (EPS) and return on equity (ROE), compute the degree of financial leverage, define and compute the indifference earnings before interest and taxes (EBIT) and explain its importance in selecting between alternative financing opportunities, define and explain the term homemade leverage, explain why determining the optimal capital structure is important,...
This chapter describes the corporate finance of mergers and acquisitions. It shows that the acquisition of one firm by another is essentially a capital budgeting decision, and the NPV framework still applies. Tax, legal, and accounting aspects of mergers are discussed along with more recent developments in areas such as takeover defenses.
The topics discussed in this chapter are financial statements, taxes and cash flow. On completion of this chapter students will: Know the difference between book value and market value, know the difference between accounting income and cash flow, know the difference between average and marginal tax rates, know how to determine a firm’s cash flow from its financial statements.
Learning objectives of this chapter include: Know how to determine a firm’s cost of equity capital, know how to determine a firm’s cost of debt, know how to determine a firm’s overall cost of capital, understand pitfalls of overall cost of capital and how to manage them, understand the impact of an imputation tax system.
Chapter 13 - Leverage and capital structure. In this chapter you will understand the effect of financial leverage on cash flows and cost of equity, understand the impact of taxes and bankruptcy on capital structure choice, understand the basic components of bankruptcy.
The connection between the capital structure decision and the value of the company was established in Chapter 4 with respect to financial risk. In this chapter, complexities are examined, including taxes, financial distress, and agency issues.
In a “perfect world” environment with no taxes, no transaction costs and perfectly efficient financial markets, capital structure does not matter.
This is known as the Independence hypothesis: firm value is independent of capital structure.
• Permanent Assets (those held 1 year)
– should be financed with permanent and
spontaneous sources of financing.
• Temporary Assets (those held
• Permanent Financing
– intermediate-term loans, long-term debt,
preferred stock, common stock
• Spontaneous Financing
– accounts payable that arise spontaneously
in day-to-day operations (trade credit,
wages payable, accrued interest and taxes)
• Short-term financing
– unsecured bank loans, commercial paper,
loans secured by A/R or inventory...