Académique Documents
Professionnel Documents
Culture Documents
No Maturity date
Capital Gains / Share
on Losses
Limited Liability
Ownership Rights
Right to earnings
Voting Right
Preemptive right
Transferability
PREFERRED EQUITY
Hybrid Securities
Cumulative / Non
Cumulative
DEBT EQUITY
Fixed Term to Maturity
Indenture and
Covenants
Callable
Convertible
Participating
No voting right
Zero-Coupon Bonds
Step-Up Notes
Deferred Coupon
Bonds
Floating-Rate
Securities
Accrued Interest
DEBT EQUITY
Pattern of Corporate
Financing
CORPOR
ATE
FINANCE
Investme
nt
Analysis
Working
Capital
Manageme
nt
Capital Budgeting
- is the planning of value-adding, longterm corporate financial projects relating to investments funded
through and affecting the firm's capital structure
Capital
Structure
Trade- Off Theory
Firms are assumed to trade-off the tax benefits of debt with the
bankruptcy costs of debt when choosing how to allocate the company's
resources.
Capital
Structure
Market Timing Hypothesis
Firms look for the cheaper type of financing regardless of their current levels of
internal resources, debt and equity; Capital structure is the outcome of the historical
cumulative timing of the market by managers.
SOURCES OF CORPORATE
FINANCING
Examples:
Debt Capitalbank loans, notes
payable, or bonds
issued to the public
Equity Capital
Hybrid
Instrument
CAPITAL MARKETS
PSE
PSE
PSE
PSE
PSE
PSE
PSE
PSE
MAIN GROUP :
BOND
Corporate Bonds
Convertible Bonds
Callable Bonds
Term Bonds
Amortized Bonds
Adjustment Bonds
Junk Bonds
Angel Bonds
GOVERNMENT
BONDS
Fixed Rate Treasury Notes
(FXTNs)
Issuer
Tenor
Tenor
Currency
Philippine peso
Currency
Philippine peso
Interest Payment
Interest Payment
Minimum Amount of
Tender
PHP10 million
PHP10 million
Redemption
Taxation
Redemption
Taxation
Secondary Market
Trading
GOVERNMENT
BONDS
Retail Treasury Bonds (RTBs)
Issuer
Republic of the
Philippines
Tenor
3 and 5 years
Currency
Philippine peso
Interest Payment
Minimum Amount of
Purchase
Variable up to
PHP100,000
Individual investors
through appointed
underwriters. No
restriction on foreign
investors.
Redemption
Taxation
Sample :
CORPORATE
BONDS
A. Long-term Commercial Paper (LTCPs)
Instruments
B. Private Corporate Bonds
Issuer
Private Corporations
Tenor
2 - 7 years
Currency
Philippine peso
Interest Payment
PHP1 to 3 billion
Redemption
Taxation