Exercises Handbook
CORPORATE FINANCE Exercise Handbook
Bachelor of Management in Accounting Academic Year of 2014/2015 (Spring Semester)
Department of Accounting & Finance
School of Economics & Management
University of Science & Technology Beijing
Distribution date: February, 2015
Contents
Chapter 1 Corporate Finance and the Financial Manager (3)
Chapter 2 Introduction to Financial Statement Analysis (3)
Chapter 3 Time Value of Money: An Introduction (3)
Chapter 4 Time Value of Money: Valuing Cash Flow Streams (4)
Chapter 5 Interest Rates (4)
Chapter 6 Bonds (5)
Chapter 7 Stock Valuation (6)
Chapter 8 Investment Decision Rules (6)
Chapter 9 Fundamentals of Capital Budgeting (7)
Chapter 10 Stock Valuation: A Second Look (8)
Chapter 11 Risk and Return in Capital Markets (9)
Chapter 12 Systematic Risk and the Equity Risk Premium (9)
Chapter 13 The Cost of Capital (10)
Chapter 14 Raising Equity Capital (11)
Chapter 15 Debt Financing (11)
Chapter 16 Capital Structure (12)
Chapter 17 Payout Policy (13)
Chapter 18 Financial Modeling and Pro Forma Analysis (13)
Chapter 19 Working Capital Management (14)
Chapter 20 Short-Term Financial Planning (15)
Chapter 21 Option Applications and Corporate Finance (16)
Chapter 22 Mergers and Acquisitions (16)
Chapter 23 International Corporate Finance (17)
Chapter 1 Corporate Finance and the Financial Manager
6. You are a shareholder in a C corporation. The corporation earns $2.00 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How much is left for you after all taxes are paid?
7. Repeat Problem 6 assuming the corporation is an S corporation.
18. What is the financial cycle?
Chapter 2 Introduction to Financial Statement Analysis
15. Find online the 2012 annual report Green Mountain Coffee Roasters (GMCR), filed in September 2012. Answer the following questions from its cash flow statement:
a. How much cash did Green Mountain generate from operating activities in 2012?
b. What was Green Mountain’s depreciation expense in 2012?
c. How much cash was invested in new property and equipment (net of any sales) in 2012?
d. How much did Green Mountain raise from the sale of shares of its stock (net of any purchases) in 2012?
19. In April 2013, General Electric (GE) had a book value of equity of $123 billion, 10.3 billion shares outstanding, and a market price of $23 per share. GE also had cash of $90 billion, and total debt of $397 billion.
a. What was GE’s market capitalization? What was GE’s market-to-book ratio?
b. What was GE’s book debt-equity ratio? What was GE’s market debt-equity ratio?
c. What was GE’s enterprise value?
34. Find online the annual report for Green Mountain Coffee Roasters (GMCR) for its 2012 fiscal year, filed in September 2012.
a. Compute Green Mountain’s net profit margin, total asset turn over, and equity multiplier.
b. Verify the DuPont Identity for Green Mountain’s ROE.
c. If Green Mountain’s managers wanted to increase its ROE by 1 percentage point, how much higher would their asset turnover need to be?
Chapter 3 Time Value of Money: An Introduction
3. Suppose your employer offers you a choice between a $5000 bonus and 100 shares of the company’s stock. Whichever one you choose will be awarded today. The stock is currently trading at $63 per share.
a. Suppose that if you receive the stock bonus, you are free to trade it. Which form of the bonus should you choose? What is its value?
b. Suppose that if you receive the stock bonus, you are required to hold it for at least one year. What can you say about the value of the stock bonus now? What will your decision depend on? 8. Brett has almond orchards, but he is sick of almonds and prefers to eat walnuts instead. The owner of the walnut orchard next door has offered to swap this year’s crop with him. Assume he produces 1000 tons of almonds and his neighbor produces 800 tons of walnuts. If the market price of almonds is $100 per ton and the market price of walnuts is $110 per ton:
a. Should he make the exchange?
b. Does it matter whether he prefers almonds or walnuts? Why or why not?
11. A friend asks to borrow $55 from you and in return will pay you $58 in one year. If your bank is offering a 6% interest rate on deposits and loans:
a. How much would you have in one year if you deposited the $55 instead?
b. How much money could you borrow today if you pay the bank $58 in one year?
c. Should you loan the money to your friend or deposit it in the bank?
17. Consider the following alternatives:
i. $100 received in one year
ii. $200 received in 5 years
iii. $300 received in 10 years
a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year.
b. What is your ranking if the interest rate is only 5% per year?
c. What is your ranking if the interest rate is 20% per year?
Chapter 4 Time Value of Money: Valuing Cash Flow Streams
14.Perpetuities The British government has a consol bond outstanding paying ￡1,000 per year forever. Assume the current interest rate is 8% per year.
a. What is the value of the bond immediately after a payment is made?
b. What is the value of the bond immediately before a payment is made?
*18. Annuities When you purchased your car, you took out a five-year annual-payment loan with an interest rate of 6% per year. The annual payment on the car is $5000. You have just made a payment and have now decided to pay off the loan by repaying the outstanding balance. What is the payoff amount for the following scenarios?
a. You have owned the car for one year (so there are four years left on the loan)?
b. You have owned the car for four years (so there is one year left on the loan)?
26. Growing Cash Flows You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug’s profits will be $2 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present valuesame drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 10% per year?
*35. You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 22nd birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you will put the same amount into a savings account. If the interest rate is 5%, how much must you set aside each year to ensure that you will have $2 million in the account on your 65th birthday?
Chapter 5 Interest Rates
1. Your bank is offering you an account that will pay 20% interest in total for a two-year deposit. Determine the equivalent discount rate for a period length of
a. six months.
b. one year.
c. one month.
Chapter 6 Bonds
26. You have credit card debt of $25,000 that has an APR (monthly compounding) of 15%. Each month you pay the minimum monthly payment. You are required to pay only the outstanding interest. You have received an offer in the mail for an otherwise identical credit card with an APR of 12%. After considering all your alternatives, you decide to switch cards, roll over the outstanding balance on the old card into the new card, and borrow additional money as well. How much can you borrow today on the new card without changing the minimum monthly payment you will be required to pay?
31. Assume the inflation rate is 5% APR, compounded annually. Would you rather earn a nominal return of 8% APR, compounded semiannually, or a real return of 4% APR, compounded quarterly?
36. You are thinking about investing $5000 in your friend’s landscaping business. Even though you know the investment is risky and you can’t be sure, you expect your investment to be worth $5750 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend’s landscape business offer a 10% expected return for the year. What should you do?
Chapter 6 Bonds
11. Assume the current Treasury yield curve shows that the spot rates for six months, one year, and 1? years are 1%, 1.1%, and 1.3%, all quoted as semiannually compounded APRs. What is the price of a $1000 par, 4% coupon bond maturing in 1? years (the next coupon is exactly six months from now)?
25. Suppose you purchase a 30-year, zero-coupon bond with a yield to maturity of 6%. You hold the bond for five years before selling it.
a. If the bond’s yield to maturit y is 6% when you sell it, what is the annualized rate of return of your investment?
b. If the bond’s yield to maturity is 7% when you sell it, what is the annualized rate of return of your investment?
c. If the bond’s yield to maturity is 5% when you sell it, what is the annualized rate of return of your investment?
d. Even if a bond has no chance of default, is your investment risk free if you plan to sell it before it matures? Explain.
29. HMK Enterprises would like to raise $10 million to invest in capital expenditures. The company plans to issue five-year bonds with a face value of $1000 and a coupon rate of 6.5% (annual payments). The following table summarizes the yield to maturity for five-year (annual-pay)
b. How much of the total principal amount of these bonds must HMK issue to raise $10 million today, assuming the bonds are AA rated? (Because HMK cannot issue a fraction of a bond, assume that all fractions are rounded to the nearest whole number.)
c. What must the rating of the bonds be for them to sell at par?
d. Suppose that when the bonds are issued, the price of each bond is $959.54. What is the likely rating of the bonds? Are they junk bonds?
Chapter 7 Stock Valuation
6. Anle Corporation has a current stock price of $20 and is expected to pay a dividend of $1 in one year. Its expected stock price right after paying that dividend is $22.
a. What is Anle’s equity cost of capital?
b. How much of Anle’s equity cost of capital is expected to be satisfied by dividend yield and how much by capital gain?
14. Laurel Enterprises expects earnings next year of $4 per share and has a 40% retention rate, which it plans to keep constant. Its equity cost of capital is 10%, which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of 4% per year. If its next dividend is due in one year, what do you estimate the firm’s current stock price to be?
17. Assume Gillette Corporation will pay an annual dividend of $0.65 one year from now. Analysts expect this dividend to grow at 12% per year thereafter until the fifth year. After then, growth will level off at 2% per year. According to the dividend-discount model, what is the value of a share of Gillette stock if the firm’s equity cost of capital is 8%?
21. Shatin Intl. has 10 million shares, an equity cost of capital of 13% and is expected to pay a total dividend of $20 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $10 million of stock each year as well. How much will its stock price increase?
Chapter 8 Investment Decision Rules
18. Innovation Company is thinking about marketing a new software product. Up-front costs to market and develop the product are $5 million. The product is expected to generate profits of $1 million per year for 10 years. The company will have to provide product support expected to cost $100,000 per year in perpetuity. Assume all profits and expenses occur at the end of the year.
a. What is the NPV of this investment if the cost of capital is 6%? Should the firm undertake the project? Repeat the analysis for discount rates of 2% and 11%.
b. How many IRRs does this investment opportunity have?
c. What does the IRR rule indicate about this investment?
27. You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of $10 million. Investment A will generate $2 million per year (starting at the end of the first year) in perpetuity. Investment B will generate $1.5 million at the end of the first year and its revenues will grow at 2% per year for every year after that.
a. Which investment has the higher IRR?
b. Which investment has the higher NPV when the cost of capital is 7%?
c. In this case, when does picking the higher IRR give the correct answer as to which investment is the better opportunity?
31. Gateway Tours is choosing between two bus models. One is more expensive to pur-chase and maintain, but lasts much longer than the other. Its discount rate is 11%. It plans to continue with one of the two models for the foreseeable future; which should it choose? Based on the costs of each model shown below, which should it choose?
34. Fabulous Fabricators needs to decide how to allocate space in its production facility this year.
b. What should Fabulous Fabricators do?
Chapter 9 Fundamentals of Capital Budgeting
*16. One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages and you can purchase it for $150,000 today. It will be depreciated on a straightline basis over 10 years and has no salvage value. You expect that the new machine will produce a gross margin (revenues minus operating expenses other than depreciation) of $40,000 per year for the next 10 years. The current machine is expected to produce a gross margin of $20,000 per year. The current machine is being depreciated on a straight-line basis over a useful life of 11 years, and has no salvage value, so depreciation expense for the current machine is $10,000 per year. The market value today of the current mac hine is $50,000. Your company’s tax rate is 45%, and the opportunity cost of capital for this type of equipment is 10%. Should your company replace its year-old machine?
25. Your company has been doing well, reaching $1 million in earnings, and is considering launching a new product. Designing the new product has already cost $500,000. The company estimates that it will sell 800,000 units per year for $3 per unit and variable non-labor costs will be $1 per unit. Production will end after year 3. New equipment costing $1 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $300,000. The new product will require the working capital to increase to a level of $380,000 immediately, then to $400,000 in year 1, in year 2 the level will be $350,000, and finally in year 3 the level will return to $300,000. Your tax rate is 35%. The discount rate for this project is 10%. Do the capital budgeting analysis for this project and calculate its NPV.
*30. Billingham Packaging is considering expanding its production capacity by purchasing a new machine, the XC-750. The cost of the XC-750 is $2.75 million. Unfortunately, installing this machine will take several months and will partially disrupt production. The firm has just completed a $50,000 feasibility study to analyze the decision to buy the XC-750, resulting in the following estimates:
? Marketing: Once the XC-750 is operational next year, the extra capacity is expected to generate $10 million per year in additional sales, which will continue for the 10 year life of the machine. ? Operations: The disruption caused by the installation will decrease sales by $5 million thi s year. As with Billingham’s existing products, the cost of goods for the products produced by the XC-750 is expected to be 70% of their sale price. The increased production will also require increased inventory on hand of $1 million during the life of the project, including year 0. ?Human Resources: The expansion will require additional sales and administrative personnel at a cost of $2 million per year.
? Accounting: he XC-750 will be depreciated via the straight-line method over the 10 year life of
the machine. The firm expects receivables from the new sales to be 15% of revenues and payables to be 10% of the cost of goods sold. Billingham’s marginal corporate tax rate is 35%.
a. Determine the incremental earnings from the purchase of the XC-750.
b. Determine the free cash flow from the purchase of the XC-750.
c. If the appropriate cost of capital for the expansion is 10%, compute the NPV of the purchase.
d. While the expected new sales will be $10 million per year from the expansion, estimates range from $8 million to $12 million. What is the NPV in the worst case? In the best case?
e. What is the break-even level of new sales from the expansion? What is the breakeven level for the cost of goods sold?
f. Billingham could instead purchase the XC-900, which offers even greater capacity. The cost of the XC-900 is $4 million. The extra capacity would not be useful in the first two years of operation, but would allow for additional sales in years 3 through 10. What level of additional sales (above the $10 million expected for the XC-750) per year in those years would justify purchasing the larger machine?
Chapter 10 Stock Valuation: A Second Look
7. Sora Industries has 60 million outstanding shares, $120 million in debt, $40 million in cash, and
Sora’s weighted average cost of capital is 10%, what is the value of Sora stock based on this information?
b. Sora’s cost of goods sold was assumed to be 67% of sales. If its cos t of goods sold is actually 70% of sales, how would the estimate of the stock’s value change?
c. Return to the assumptions of part (a) and suppose Sora can maintain its cost of goods sold at 67% of sales. However, the firm reduces its selling, general, and administrative expenses from 20% of sales to 16% of sales. What stock price would you estimate now? (Assume no other expenses,
except taxes, are affected.)
*d. Sora’s net working capital needs were estimated to be 18% of sales (their current level in year 0). If Sora can reduce this requirement to 12% of sales starting in year 1, but all other assumptions remain as in part (a), what stock price do you estimate for Sora? (Hint: This change will have the largest effect on Sora’s free cash flow in year 1.)
17. Suppose that in July 2013, Nike had sales of $25,313 million, EBITDA of $3,254 million, excess cash of $3,337 million, $1,390 million of debt, and 893.6 million shares outstanding.
a. Using the average enterprise value to sales multiple in Table 10.1, es timate Nike’s share price.
b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in Table 10.1?
c. Using the average enterprise value to EBITDA multiple in Table 10.1, estimate Nike’s share price.
d. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in Table 10.1?
23. You have a $100,000 portfolio made up of 15 stocks. You trade each stock five times this year and each time you trade, you pay about $30 in commissions and spread. You have no special knowledge, so you earn only the average market return of 12% on your investments. How much lower will your total return be because of your trades?
Chapter 11 Risk and Return in Capital Markets
7. Using the data in the following table, calculate the return for investing in Boeing stock (BA) from January 2, 2008, to January 2, 2009, and also from January 3, 2011, to January 3, 2012, assuming all dividends are reinvested in the stock immediately.
Historical Stock and Dividend Data for Boeing
Date Price Dividend Date Price Dividend
2008/1/2 86.62 2011/1/3 66.40
2008/2/6 79.91 0.40 2011/2/9 72.63 0.42
2008/5/7 84.55 0.40 2011/5/11 79.08 0.42
2008/8/6 65.40 0.40 2011/8/10 57.41 0.42
2008/11/5 49.55 0.40 2011/11/8 66.65 0.42
2009/1/2 45.25 2012/1/3 74.22
*21. Using the data in Critical Thinking Question 6, calculate the following:
a. The expected overall payoff of each bank
b. The standard deviation of the overall payoff of each bank
22. You are a risk-averse investor who is considering investing in one of two economies. The expected return and volatility of all stocks in both economies are the same. In the first economy, all stocks move together—in good times all prices rise together and in bad times they all fall together. In the second economy, stock returns are independent—one stock increasing in price has no effect on the prices of other stocks. Which economy would you choose to invest in? Explain.
Chapter 12 Systematic Risk and the Equity Risk Premium
3. You are considering how to invest part of your retirement savings. You have decided to put
$200,000 into three stocks: 50% of the money in GoldFinger (currently $25/share), 25% of the money in Moosehead (currently $80/share), and the remainder in Venture Associates (currently $2/share). If GoldFinger stock goes up to $30/share, Moosehead stock drops to $60/share, and Venture Associates stock rises to $3 per share,
a. What is the new value of the portfolio?
b. What return did the portfolio earn?
c. If you don’t buy or sell shares after the price change, what are your new portfolio weigh ts?
17. You have a portfolio with a standard deviation of 30% and an expected return of 18%. You are considering adding one of the two stocks in the following table. If after adding the stock you will have 20% of your money in the new stock and 80% of your money in your existing portfolio, which one should you add?
20. Given $100,000 to invest, construct a value-weighted portfolio of the four stocks listed below:
*34. You want to invest $50,000 in a portfolio with a beta of no more than 1.4 and an expected return of 12.4%. Bay Corp. has a beta of 1.2 and an expected return of 11.2%, and City Inc. has a beta of 1.8 and an expected return of 14.8%. The risk-free rate is 4%. You can invest in Bay Corp. and City Inc. How much will you invest in each?
Chapter 13 The Cost of Capital
12. Mackenzie Company has a price of $36 and will issue a dividend of $2 next year. It has a beta of 1.2, the risk-free rate is 5.5%, and it estimates the market risk premium to be 5%.
a. Estimate the equity cost of capital for Mackenzie.
b. Under the CGDM, at what rate do you need to expect Mackenzie’s dividends to grow to get the same equity cost of capital as in part (a)?
16. Growth Company’s current share price is $20 and it is expected to pay a $1 dividend per share next year. After that, the firm’s dividends are expected to grow at a rate of 4% per year.
a. What is an estimate of Growth Company’s cost of equity?
b. Growth Company also has preferred stock outstanding that pays a $2 per share fixed dividend. If this stock is cur rently priced at $28, what is Growth Company’s cost of preferred stock?
c. Growth Company has existing debt issued three years ago with a coupon rate of 6%. The firm just issued new debt at par with a coupon rate of 6.5%. What is Growth Company’s pretax co st of debt?
d. Growth Company has 5 million common shares outstanding and 1 million preferred shares outstanding, and its equity has a total book value of $50 million.Its liabilities have a market value of $20 million. If Growth Company’s commonand preferr ed shares are priced as in parts (a) and (b), what is the market value ofGrowth Company’s assets?
e. Growth Company faces a 35% tax rate. Given the information in parts (a) through (d),and your answers to those Problems, what is Growth Company’s WACC?
23. Your company has two divisions: One division sells software and the other division sells computers through a direct sales channel, primarily taking orders over the Internet. You have decided that Dell Computer is very similar to your computer division, in terms of both risk and financing. You go online and find the following information: Hewlett Packard’s beta is 1.21, the risk-free rate is 4.5%, its market value of equity is $67 billion, and it has $700 million worth of debt with a yield to maturity of 6%. Your tax rate is 35% and you use a market risk premium of 5% in your WACC estimates.
a. What is an estimate of the WACC for your computer sales division?
b. If your overall company WACC is 12% and the computer sales division represents 40% of the value of your firm, what is an estimate of the WACC for your software division?
Chapter 14 Raising Equity Capital
4. Three years ago, you founded your own company. You invested $100,000 of your own money and received 5 million shares of Series A preferred stock. Your company has since been through three additional rounds of financing.
a. What is the pre-money valuation for the Series D funding round?
b. What is the post-money valuation for the Series D funding round?
14. Your firm is selling 3 million shares in an IPO. You are targeting an offer price of $17.25 per share. Your underwriters have proposed a spread of 7%, but you would like to lower it to 5%. However, you are concerned that if you do so, they will argue for a lower offer price. Given the potential savings from a lower spread, how much lower can the offer price go before you would have preferred to pay 7% to get $17.25 per share?
*19. Foster Enterprises’ stock is trading for $50 per share and there are currently 10 million shares outstanding. It would like to raise $100 million. If its underwriter charges 5% of gross proceeds,
a. How many shares must it sell?
b. If it expects the stock price to drop by 2% upon announcement of the SEO, how many shares should it plan to sell?
c. If all of the shares are primary shares and are sold to new investors, what percentage reduction in ownership will all of the existing shareholders experience?
Chapter 15 Debt Financing
2. Your firm is considering two one-year loan options for a $500,000 loan. The first carries fees of 2% of the loan amount and charges interest of 4% of the loan amount. The other carries fees of 1% of the loan amount and charges interest of 4.5% of the loan amount.
a. What is the net amount of funds from each loan?
b. Based on the net amount of funds, what is the true interest rate of each loan?
4. Your firm successfully issued new debt last year, but the debt carries covenants. Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a
minimum quick (acid-test) ratio
((current assets—inventory)/ current liabilities)
of 1:1. Your net income this year was $70 million. Your cash is $10 million, your receivables are $8 million, and your inventory is $5 million. You have current liabilities of $19 million. What is the maximum dividend you could pay this year and still comply with your covenants?
7. Boeing Corporation has just issued a callable (at par) three-year, 5% coupon bond with semiannual coupon payments. The bond can be called at par in two years or anytime thereafter on a coupon payment date. It has a price of $99.
a. What is the bond’s yield to maturity?
b. What is its yield to call?
c. What is its yield to worst?
Chapter 16 Capital Structure
*4. Suppose there are no taxes. Firm ABC has no debt, and firm XYZ has debt of $5000 on which it pays interest of 10% each year. Both companies have identical projects that generate free cash flows of $800 or $1000 each year. After paying any interest on debt, both companies use all remaining free cash flows to pay dividends each year.
a. Fill in the table above showing the debt payments and equity dividends each firm will receive given each of the two possible levels of free cash flows.
b. Suppose you hold 10% of the equity of ABC. What is another portfolio you could hold that would provide the same cash flows?
c. Suppose you hold 10% of the equity of XYZ. If you can borrow at 10%, what is an alternative strategy that would provide the same cash flows?
11. Suppose the corporate tax rate is 40%. Consider a firm that earns $1000 before interest and taxes each year with no risk. The firm’s capital expenditures equal its depreciation expenses each year, and it will have no changes to its net working capital. The risk-free interest rate is 5%.
a. Suppose the firm has no debt and pays out its net income as a dividend each year. What is the value of the firm’s equity?
b. Suppose instead the firm makes interest payments of $500 per year. What is the value of equity? What is the value of debt?
c. What is the difference between the total value of the firm with leverage and without leverage?
d. To what percentage of the value of the debt is the difference in part (c) equal?
26. Marpor Industries has no debt and expects to generate free cash flows of $16 million each year. Marpor believes that if it permanently increases its level of debt to $40 million, the risk of financial distress may cause it to lose some customers and receive less favorable terms from its suppliers. As a result, Marpor’s expected free cash flows with debt will be only $15 million per year. Suppose Marpor’s tax rate is 35%, the risk-free rate is 5%, the expected return of the market is 15%, and the beta of Marpor’s free cash flows is 1.10 (with or without leverage).
a. Estimate Marpor’s value without le verage.
b. Estimate Marpor’s value with the new leverage.
*30. Zymase is a biotechnology start-up firm. Researchers at Zymase must choose one of three
different research strategies. The payoffs (after taxes) and their likelihood for each strategy are shown below. The risk of each project is diversifiable.
a. Which project has the highest expected payoff?
b. Suppose Zymase has debt of $40 million due at the time of the project’s payoff. Which strategy has the highest expected payoff for equity holders?
c. Suppose Zymase has debt of $110 million due at the time of the strategy’s payoff. Which strategy has the highest expected payoff for equity holders?
d. If management chooses the strategy that maximizes the payoff to equity holders, what is the expected agency cost to the firm from having $40 million in debt due? What is the expected agency cost to the firm from having $110 million in debt due?
Chapter 17 Payout Policy
10. You purchased CSH stock for $40 and it is now selling for $50. The company has announced that it plans a $10 special dividend.
a. Assuming 2010 tax rates, if you sell the stock or wait and receive the dividend, will you have different after-tax income?
b. If the capital gains tax rate is 20% and the dividend tax rate is 40%, what is the difference between the two options in part (a)?
16-18 Use the following information to answer Problems 16 through 18:
AMC Corporation currently has an enterprise value of $400 million and $100 million in excess cash. The firm has 10 million shares outstanding and no debt. Suppose AMC uses its excess cash to repurchase shares. After the share repurchase, news will come out that will change AMC’s enterprise value to either $600 million or $200 million.
16. What is AMC’s share price prior to the share repurchase?
17. What would AMC’s share price be after the repurchase if its enterprise value goes up? What would AMC’s share price be after the repurchase if its enterprise value declines?
*18. Suppose AMC waits until after the news comes out to do the share repurchase. What would AMC’s share price be after the repurchase if its enterprise value goes up? What would AMC’s share price be after the repurchase if its enterprise value declines?
22. Suppose the stock of Host Hotels & Resorts is currently trading for $20 per share.
a. If Host issues a 20% stock dividend, what would its new share price be?
b. If Host does a 3:2 stock split, what would its new share price be?
Chapter 18 Financial Modeling and Pro Forma Analysis
8–11 For Problems 8–11, use the following income statement and balance sheet for Global Corp.:
8. Global expects sales to grow by 8% next year. Using the percent of sales method, forecast:
a. Costs except depreciation e. Accounts receivable
b. Depreciation f. Inventory
c. Net income g. Property, plant, and equipment
d. Cash h. Accounts payable
9. Assume that Global pays out 50% of its net income. Use the percent of sales method to forecast stockholders’ equity (s ee MyFinanceLab for the data in Excel format).
10. What is the amount of net new financing needed for Global (see MyFinanceLab for the data in Excel format)?
11. If Global decides that it will limit its net new financing to no more than $9 million, how will this affect its payout policy (see MyFinanceLab for the data in Excel format)?
12-15 For Problems in this section, you should download the KMS spreadsheets available on the book’s Web site.
12.Assume that KMS’s market share will increase by 0.25% per ye ar rather than the 1% used in the chapter (see Table 18.5) and that its prices remain as in the chapter. What production capacity will KMS require each year? When will an expansion become necessary (that is, when will production volume exceed 1100)?
13.Un der the assumption that KMS’s market share will increase by 0.25% per year, you determine that the plant will require an expansion in 2015. The expansion will cost $20 million. Assuming that the financing of the expansion will be delayed accordingly, calculate the projected interest payments and the amount of the projected interest tax shields (assuming that KMS still uses a 10-year bond and interest rates remain the same as in the chapter) through 2018.
14. Under the assumption that KMS’s market share will increase by 0.25% per year (and the investment and financing will be adjusted as described in Problem 13), you project the following depreciation:
Using this information, project net income through 2018 (that is, reproduce Table 18.8 under the new assumptions).
15. Assuming that KMS’s market share will increase by 0.25% per year (implying that the investment, financing, and depreciation will be adjusted as described in Problems 13 and 14), and that the working capital assumptions used in the chapter stil l hold, calculate KMS’s working capital requirements through 2018 (that is, reproduce Table 18.9 under the new assumptions). 18. Your firm has an ROE of 12%, a payout ratio of 25%, $600,000 of stockholders’ equity, and $400,000 of debt. If you grow at your sustainable growth rate this year, how much additional debt will you need to issue?
20. Forecast KMS’s free cash flows (reproduce Table 18.13), assuming KMS’s market share will increase by 0.25% per year; investment, financing, and depreciation will be adjusted accordingly; and working capital will be as you projected in Problem 15).
Chapter 19 Working Capital Management
5. Your firm currently has net working capital of $250,000 that it expects to grow at a rate of 8% per year forever. You are considering some suggestions that could slow that growth to 6% per year. If your discount rate is 15%, how would these changes impact the value of your firm?
*9. The Fast Reader Company supplies bulletin board services to numerous hotel chains nationwide. The owner of the firm is investigating the desirability of employing a billing firm to do her billing and collections. Because the billing firm specializes in these services, collection float will be reduced by 20 days. Average daily collections are $1200, and the owner can earn 8%
annually (expressed as an APR with monthly compounding) on her investments. If the billing firm charges $250 per month, should the owner employ the billing firm?
*https://www.wendangku.net/doc/3717805062.html,e the financial statements supplied below and on the next page for International Motor Corporation (IMC) to answer the following questions (see MyFinanceLab for the data in Excel format):
a. Calculate the cash conversion cycle for IMC for both 2012 and 2013. What change has occurred, if any? All else being equal, how does thi s change affect IMC’s need for cash?
b. IMC’s suppliers offer terms of net 30. Does it appear that IMC is doing a good job of managing its accounts payable?
Chapter 20 Short-Term Financial Planning
3–7 The following table includes quarterly working capital levels for your firm for the next year. Use it to answer Problems 3–7.
3. What are the permanent working capital needs of your company? What are the temporary needs?
4. If you chose to use only long-term financing, what total amount of borrowing would you need
to have on a permanent basis? Forecast your excess cash levels under this scenario.
5. If you hold only $100 in cash at any time, what is your maximum short-term borrowing and when?
6. If you choose to enter the year with $400 total in cash, what is your maximum short-term borrowing?
7. If you want to limit your maximum short-term borrowing to $500, how much excess cash must you carry?
8. The Hand-to-Mouth Company needs a $10,000 loan for the next 30 days. It is trying to decide among three options:
Alternative A: Forgo the discount on its trade credit agreement that offers terms of 2/10, net 30. Alternative B: Borrow the money from Bank A, which has offered to lend the firm $10,000 for 30 days at an APR of 12%. The bank will require a (no-interest) compensating balance of 5% of the face value of the loan and will charge a $100 loan origination fee, which means Hand-to-Mouth must borrow even more than the $10,000.
Alternative C: Borrow the money from Bank B, which has offered to lend the firm $10,000 for 30 days at an APR of 15%. The loan has a 1% loan origination fee.
Which alternative is the cheapest source of financing for Hand-to-Mouth?
18. Construct a short-term financial plan for Springfield Snowboards based on its expansion opportunity desc ribed in the “Positive Cash Flow Shocks” part of Section 20.1. Base the plan on the following table, which forecasts additional capital expenditures, marketing (SG&A), and working capital in Q1 and Q2 along with higher sales in Q2–Q4. Assume that Springfield ends 2014 with $1 million in cash and that its bank will offer it a short-term loan at the rate 2.5% per quarter.
Chapter 21 Option Applications and Corporate Finance
4. You own a put option on Ford stock with a strike price of $10. The option will expire in exactly six months.
a. If the stock is trading at $8 in six months, what will be the payoff of the put?
b. If the stock is trading at $23 in six months, what will be the payoff of the put?
c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration.
12. Dynamic Energy Systems stock is currently trading for $33 per share. The stock pays no dividends. A one-year European put option on Dynamic with a strike price of $35 is currently trading for $2.10. If the risk-free interest rate is 10% per year, what is the price of a one-year European call option on Dynamic with a strike price of $35?
Chapter 22 Mergers and Acquisitions
5. The NFF Corporation has announced plans to acquire LE Corporation. NFF is trading at $35 per share and LE is trading at $25 per share, implying a premerger value of LE of $4 billion. If the projected synergies are $1 billion, what is the maximum exchange ratio NFF could offer in a stock swap and still generate a positive NPV?
8. BAD Company’s stock price is $20, and the firm has 2 million shares outstanding. You believe you can increase the company’s value if you buy it and replace the management. Assume that BAD has a poison pill with a 20% trigger. If it is triggered, all BAD’s shareholders—other than
the acquirer—will be able to buy one new share in BAD for each share they own at a 50% discount. Assume that the price remains at $20 while you are acquiring your shares. If BAD’s management decides to resist your buyout attempt, and you cross the 20% threshold of ownership:
a. How many new shares will be issued and at what price?
b. What will happen to your percentage ownership of BAD?
c. What will happen to the price of your shares of BAD?
d. Do you lose or gain from triggering the poison pill? If you lose, where does the loss go (who benefits)? If you gain, from where does the gain come (who loses)?
9. You work for a leveraged buyout firm and are evaluating a potential buyout of UnderWater Company. UnderWater’s stock price is $20, and it has 2 million shares outstanding. You believe that if you buy the company and replace its management, its value will increase by 40%. You are planning on doing a leveraged buyout of UnderWater, and will offer $25 per share for control of the company.
a. Assuming you get 50% control, what will happen to the price of non-tendered shares?
b. Given the answer in (a), will shareholders tender their shares, not tender their shares, or be indifferent?
c. What will be your gain from the transaction?
Chapter 23 International Corporate Finance
4. You are a broker for frozen seafood products for Choyce Products. You just signed a deal with a Belgian distributor. Under the terms of the contract, in one year you will deliver 4000 kilograms of frozen king crab for 100,000 euros. Your cost for obtaining the king crab is $110,000. All cash flows occur in exactly one year.
a. Plot your profits in one year from the contract as a function of the exchange rate in one year, for exchange rates from $0.75/€ to $1.50/€. Label this line “Unhedged Profits.”
b. Suppose the one-year forward exchange rate is $1.25/€, and that you enter into a forward contract to sell the euros you will receive at this rate. In the figure from (a), plot your combined profits from the crab contract and the forward contract as a function of the exchange rate in one year. Label this line “Forward Hedge.”
c. Suppose that instead of using a forward contract, you consider using options. A one-year call option to buy euros at a strike price of $1.25/€is trading for $0.10/€. Similarly, a one-year put option to sell euros at a strike price of $1.25/€ is trading for $0.10/€. To hedge the risk of your profits, should you buy or sell the call or the put?
d. In the figure from (a) and (b), plot your “all in” profits using the option hedge (combined profits of crab contract, option contract, and option price) as a function of the exchange rate in one year. Label this line “Option Hedg
e.” (Note: You can ignore the effect of interest on the option price.) e. Suppose that by the end of the year, a trade war erupts, leading to a European embargo on U.S. food products. As a result, your deal is cancelled, and you don’t receive the euros or incur the costs of procuring the crab. However, you still have the profits (or losses) associated with your forward or options contract. In a new figure, plot the profits associated with the forward hedge and the options hedge (labeling each line). When there is a risk of cancellation, which type of hedge has the least downside risk? Explain briefly.
5. You are a U.S. investor who is trying to calculate the present value of a e5 million cash inflow that will occur one year in the future. The spot exchange rate is S = $1.25/€ and the forward rate is
F1 = $1.215/€. You estimate that the appropriate dollar d iscount rate for this cash flow is 4% and the appropriate euro discount rate is 7%.
a. What is the present value of the €5 million cash inflow computed by first discounting the euro and then converting it into dollars?
b. What is the present value of the €5 million cash inflow computed by first converting the cash flow into dollars and then discounting?
c. What can you conclude about whether these markets are internationally integrated, based on your answers to (a) and (b)?
9. You work for a U.S. firm, and your boss has asked you to estimate the cost of capital for countries using the euro. You know that S = $1.20/€ and F1 = $1.157/€. Suppose the dollar WACC for your company is known to be 8%. If these markets are internationally integrated, estimate the euro cost of capital for a project with free cash flows that are uncorrelated with spot exchange rates. Assume the firm pays the same tax rate no matter where the cash flows are earned.
*17. Assume that in the original Ityesi example in Table 23.2, all sales actually occur in the United States and are projected to be $60 million per year for four years. Keeping other costs in pounds as shown in the table, calculate the NPV of the investment opportunity. Also remember that when the EBIT is negative, the resulting negative taxes are added to EBIT when calculating FCF because they are tax shields. Assume all tax shields are used in the current year and are not carried forward.
外贸英语函电的写作格式常用范文
外贸英语函电的写作格式常用范文 外贸函电涉及到的知识很广泛，那么外贸函电的英语写作格式需要注意哪些问题呢，接下来为大家整理了外贸英语函电的写作格式，希望对你有帮助哦! 1.请求建立商业关系 Rogers Chemical Supply Co. 10E.22Street Omaha8,Neb Gentlemen: We have obtained your name and address from Aristo Shoes, Milan , and we are writing to enquire whether you would be willing to establish business relations with us. We have been importers of shoes for many years. At present, We are interested in extending our, range and would appreciate your catalogues and quotations.If your prices are competitive we would expect to transact a significant volume of business. We look forward to your early reply. Very truly yours 自米兰职权里斯托鞋类公司取得贵公司和地址，特此修函，祈能发展关系。多年来，本公司经营鞋类进口生意，现欲扩展业务范围。盼能惠赐商品目录和报价表。如价格公道，本公司必大额订购。烦请早日赐复。此致 2.回复对方建立商业关系的请求 Thank your for your letter of the 16th of this month. We
外贸英语函电书写格式要求
11----------------精选公文范文----------------1 外贸英语函电书写格式要求 各位读友大家好，此文档由网络收集而来，欢迎您下载，谢谢 篇一：外贸英语函电写作技巧 外贸英语函电写作技巧 英文信函的信头也称信端，其内容包括发件公司的名称、标志、通信地址、电话号码、传真号、电子邮箱等。书写信头的目的是为了方便收件人了解信函来自何处，并为回复提供联系方式。 很多公司都会印制带信头的信纸。一般来说，人们喜欢将简单的信头放在信纸上端居中，将复杂的信头放在信纸的右侧或上下两端。在使用这种信纸打印信函时，一定要注意为信头留出足够的空间。 对于私人商务信函，如求职信等，
22----------------精选公文范文----------------2 信头通常写在信纸的右上方。 如果信函的长度超过两页，那么从第2页开始就不再需要信头了，只需写上页码、收件人姓名及日期。 英文地址的书写和中文地址的书写有很大区别，应遵循从小到大的原则。特别值得注意的是，地址中的标点符号需正确使用。当前的习惯做法是，行末一般不加标点符号，但行中间该加标点的地方，还是不应省略。门牌号码与街道名称之间不加标点，但是在城市与国家名称之间必须用逗号分开。 英文商务信函中称呼的书写有讲究 在英文信函书写中称呼是对收信人的尊称语。一般位于信内地址下方空一行；有Attention时也一样，位于Attention下面空一行。称呼后面一般用逗号（英式），也可以用冒号（美式）。 如果信是写给公司的，并没有直接
33----------------精选公文范文----------------3 的联系人，称呼应为：“Dear Sirs,”（英式）或“Gentlemen:”（美式）。在不能确定收信人性别的情况下，还可以使用To Whom It May Concern或Dear Madam or Sir。不过这两种称呼应尽量避免使用，因为人们觉得它们不能显示足够的友好。在写信给特定的组织时，更愿意使用Dear Member,Dear Customer,和Dear Human Resources Manager这样的称呼。 如果知道收件人的姓名，就应该直接把姓名用入称呼里。 1．商务信函一般用Dear Miss Brown，Dear 。Dear纯属公务上往来的客气形式。 2．写给亲人、亲戚和关系密切的朋友时，用Dear或Mydear再加上表示亲属关系的称呼或直称其名。例如：My dear father，Dear Tom等。
外贸函电英文信函
建立业务关系 Dear Sirs， Through the courtesy of Mr.Freemen,we are given to understand that you are one of the leading exporters of Chinese light industrial products in your area. We now avail ourselves of this opportunity to write to you and see if we can establish business relations with you. We are very well connected with all the major dealers of light industrial products in this area . We are confident that we can sell large quantities of Chinese goods if we receive your offers at competitive prices. Please send to us necessary information regarding your products for export. We look forward to receiving your early reply. Y ours sincerely, XXX Dear Sirs， We acknowledge with thanks the receipt of your letter of September 10 ,2009,informing us of your interest in our products. We look forward to establishing positive business relationship with your corporation. We are a state-owned corporation（国有公司) specializing in the export of Chinese light industrial products. We are convinced that our joint business efforts will be to our mutual benefit. As requested, a booklet including a general introduction , the scope of business and other topics are enclosed for your reference . Should you require any further information,please don't hesitate to let us know. Y ours sincerely, XXX 询盘 United Textiles Ltd. Y ork House , Lawton Street ,
外贸函电重点句型
Warm-up exercises Warm-up exercises One 1.我们无意催促你们作出决定，为你方利益着想，建议你们尽快利用此次报盘We have no intention of urging you to make the decision, thinking about for the interests of you, advise you to utilize this offer as soon as possible 2.将我们的报价与其他公司比较后，相信你们会赞同我们所提供的商品价廉物美。 After comparing our quotation with other companies, it is believed that it is good and cheap that you will agree to the goods that we offer. 3.我方欣然接受你们A103号订单订购1，000件“英雄”牌男式衬衣，请按合同规定的条款开立以我方受益人的即期信用证。 We accept your order No. A103 and order 1,000 " hero " brand shirts in men's style joyfully, the clause that please stipulate according to the contract is opened with our beneficiary's sight letter of credit. 4.依照随函附上的详细情况，我们向贵公司订购中国面料。请注意，货物必须与样品完全相符。如果第一份试购单令人满意，我们将继续大量订购。According with the details enclosed, we purchase the Chinese surface fabric from your company. Please note, the goods must be in full conformity with the samples. If the first trial order is satisfactory, we will continue ordering in a large amount. 5.抱歉，不能接受你们的还盘，因我衬衣的报价与当前市场价格相符。 I am sorry, can't accept your counter offer, because the quotation of my shirt is in conformity with market price at present. Warm-up exercises TWO 1.要求定购我们产品的人越来越多。The demand for our products has kept rising. 2.这些报价比其他任何地方都要低得多。 They are still lower than the quotations you can get elsewhere. 3.我想了解一下贵国的投资环境。 I"d like to know some information about the current investment environment in your country. 4.我们相信双方都有一个光明的前景。We are sure both of us have a brighter future. 5.我们的对外贸易政策一向是以平等互利、互通有无为基础的。 Our foreign trade policy has always been based on equality and mutual benefit and exchange of needed goods. Warm-up exercises 3 我认为你推销时不会有任何困难。I don"t think you"ll have any difficulty in pushing sales. 一般你们报盘的有效期是多长？How long will your offer hold good?
外贸英语函电书写格式要求
外贸英语函电书写格式要求 各位读友大家好，此文档由网络收集而来，欢迎您下载，谢谢 篇一：外贸英语函电写作技巧 外贸英语函电写作技巧 英文信函的信头也称信端，其内容包括发件公司的名称、标志、通信地址、电话号码、传真号、电子邮箱等。书写信头的目的是为了方便收件人了解信函来自何处，并为回复提供联系方式。 很多公司都会印制带信头的信纸。一般来说，人们喜欢将简单的信头放在信纸上端居中，将复杂的信头放在信纸的右侧或上下两端。在使用这种信纸打印信函时，一定要注意为信头留出足够的空间。 对于私人商务信函，如求职信等，信头通常写在信纸的右上方。 如果信函的长度超过两页，那么从第2页开始就不再需要信头了，只需写
上页码、收件人姓名及日期。 英文地址的书写和中文地址的书写有很大区别，应遵循从小到大的原则。特别值得注意的是，地址中的标点符号需正确使用。当前的习惯做法是，行末一般不加标点符号，但行中间该加标点的地方，还是不应省略。门牌号码与街道名称之间不加标点，但是在城市与国家名称之间必须用逗号分开。 英文商务信函中称呼的书写有讲究 在英文信函书写中称呼是对收信人的尊称语。一般位于信内地址下方空一行；有Attention时也一样，位于Attention 下面空一行。称呼后面一般用逗号（英式），也可以用冒号（美式）。 如果信是写给公司的，并没有直接的联系人，称呼应为：“Dear Sirs,”（英式）或“Gentlemen:”（美式）。在不能确定收信人性别的情况下，还可以使用To Whom It May Concern或Dear Madam or Sir。不过这两种称呼应尽量避免使用，因为人们觉得它们不能显示足够的友
《27种常用英文商务信函》
27种常用英文商务信函 1请求建立商业关系 Rogers Chemical Supply Co. 10E.22Street Omaha8,Neb Gentlemen: We have obtained your name and address fro m Aristo Shoes, Milan , and we are writing to enquire whether you would be willing to establish business re lations with us. We have been importers of shoes for many years. At present, We are interested in extending our, range and would appreciate your catalogues and q uotations.If your prices are competitive we would expect to transact a significant volume of business. We look forward to your early reply. Very truly yours 自米兰职权里斯托鞋类公司取得贵公司和地址，特此修函，祈能发展关系。多年来，本公司经营鞋类进口生意，现欲扩展业务范围。盼能惠赐商品目录和报价表。如价格公道，本公司必大额订购。烦请早日赐复。此致 2.回复对方建立商业关系的请求 Thank your for your letter of the 16th of this month. We shall be glad to enter into business relat ions with your company. In compliance with your request, we are sending you, under separate cov er, our latest catalogue and price list covering our export range. Payment should be made by irrevo cable and confirmed letter of credit. Should you wish to place an order, please telex or fax us. 本月16日收到有关商务关系的来函，不胜欣喜。谨遵要求另函奉上最新之出口商品目录和报价单。款项烦请以不可撤销保兑之信用状支付。如欲订货，请电传或传真为盼。此致敬礼 3.请求担任独家代理 We would like to inform you that we act on a sole agency basis fora number of manufacturers. We specialize in finished cotton goods for the Middle eastern market: Our activities cover all types of household linen. Until now , we have been working with your textiles department and our colla boration has proved to be mutually beneficial. Please refer to them for any information regarding o ur company. We are very interested in an exclusive arrangement with your factoryfor the promotio n of your products in Bahrain. We look forward to your early reply. `本公司担任多家厂家的独家代理，专营精制棉织品，包括各灯家用亚麻制品，行销中东。与贵公司向有业务联系，互利互作。贵公司纺织部亦十分了解有关业务合作之情况。盼望能成为贵公司独家代理，促销在巴林市场的货品。上述建议，烦请早日赐复，以便进一步联系合作。此致敬礼
推销产品信函中英文对照
推销产品信函中英文对照 Gentlemen：Last year we achieved a 25％ increase in the sales of our businessmen’s suits．we believed that this happy state of affairs can be attributed to two causes．First，we managed to avoid passing on any part of our increased manufacturing costs．Second，we believe ours are products of the finest materials and the highest techniques and are second to none in design and reliability．And so we are happy to be able to tell you that our new season’s suits are，if anything，more attractive than last year’s and our prices will pare very favorably with those of any of our petitors．We believe that you will agree that our samples prove the truth of our claims．We look forward to an even larger order than the one you favored with last year．Yours truly，中文对照敬启者：我公司的男装销售额去年增加25％，我们认为这有两种原因。第一、我们制作成本虽然增加，但售价未增；第二、本公司的产品原料好、技术高，而且在设计和可靠性方面，是独一无二的。能有机会把我公司季节性服装介绍给贵方，至感欣慰。有的同行产品可能比去年更具诱惑性，但我公司的价格比较便宜。我们确信阁下会同意，我方的样品可以证明我们所说的真实性。我方盼接到贵方比去年更多的订单。×××敬上
外贸函电第四章答案
Unit 4 Exercises 1. Complete the following sentences by translating the part in Chinese into English. (1) establishing business relations with your company （与贵公司建立业务关系） (2) On the recommendation of Dalian Trading Company (承蒙大连贸易公司介绍) (3) have the pleasure to introduce ourselves to you （有幸自荐） (4) As requested (根据你方要求) (5) We are looking forward to (我方期盼) 2. Read the following sentences and try to find out the mistakes and make corrections. There is one mistake in each sentence. (1) to →from (2) on →for (3) trading with →handling (4) enter →enter into / enter →establish (5) by separate cover →under separate cover Or by separate cover →by separate mail 3. Translate the following sentences. Part I T ranslate the following sentences into English. (1) We are one of the leading importers dealing in electronic products in the area, and take this opportunity to approach you in the hope of establishing business relations. (2) We have been engaged in handling importing and exporting of machinery and equipment for many years, and our products have enjoyed great popularity in many countries. (3) We owe your name and address to the Commercial Counselor’s Office of our Embassy in Beijing. (4) We are given to understand that you are a manufacturer of daily chemicals. One of our clients intends to buy cosmetics from your country. We will appreciate it highly if you airmail the catalogue and price list of the goods available at present. (5)For our credit standing, please refer to the Bank of China, Shanghai Branch.
外贸函电常见名词英译汉
1. 申请人applicant 2. 实盘firm offer 3. 装运日期Time of shipment/delivery(date of shipment/delivery) 4. 航空货运单air waybill 5. 即期汇票sight draft 6. 合法持有人bona fide holder 7. 通知银行advising bank 8. 检验报告survey report 9. 到岸价CIF/cost, insurance and freight 10. 信用证修改书amendment to letter of credit 11. 中国对外贸易运输公司China National Foreign Trade Transportation Corporation 12. 代收银行，汇付行collecting bank 13. 订舱book shipping space 14. 运费率Freight rate 15.钩损险Hook Damage Risk 16.包装不良Improper packing 17. 支付条款Payment terms/terms of payment 18. 汇票draft 19. 装运港port of loading 20. 品质检验证书Inspection Certificate of Quality 21. 资信状况credit standing 22 信用证letter of credit
23. 销售确认书sales confirmation 24. 电汇telegraphic transfer 25. 仲裁Arbitration 26. 付款交单document(s) against payment 27. 水渍险With particular average/WPA 28. 提单bill of lading 29. 离岸价FOB/free on board 30. 贸易条款terms and conditions 31. 装箱单packing list 32. 原产地证明certificate of origin 33. 开证行Issuing/opening bank 34. 装运单据shipping documents 35. 综合险All Risks 36. 有关信用证the relevant letter of credit 37. 销售合同Sales Contract 38. 保险单Insurance Policy 39. 租船契约Charter Party 40. 索赔Lodge a claim (againt)…/claim 41.商业发票Commercial Invoice 42. 中国商检局China Commodity Inspection Bureau 43. 装船通知shipping advice/notice 44.目的港port of destination
外贸函电中常见缩略词中英文对照
C&F (cost&freight) 成本加运费价 T/T (telegraphic transfer) 电汇 D/P(document against payment) 付款交单 D/A(document against acceptance)承兑交单 C.O (certificate of origin) 一般原产地证 G.S.P. (generalized system of preferences) 普惠制CTN/CTNS (carton/cartons) 纸箱 PCE/PCS (piece/pieces) 只、个、支等 DL/DLS(dollar/dollars) 美元 DOZ/DZ (dozen) 一打 PKG (package) 一包，一捆，一扎，一件等 WT (weight) 重量 G.W. (gross weight) 毛重 N.W. (net weight) 净重 EA (each) 每个，各 W (with) 具有 w/o (without) 没有 FAC (facsimile) 传真 IMP (import) 进口 EXP (export) 出口 MAX (maximum) 最大的、最大限度的 MIN (minimum) 最小的，最低限度 M 或MED (medium) 中等，中级的 M/V (merchant vessel) 商船 S.S (steamship) 船运 DOC (document) 文件、单据 INT (international) 国际的 P/L (packing list) 装箱单、明细表 INV (invoice) 发票 PCT (percent) 百分比 REF (reference) 参考、查价 EMS (express mail special) 特快传递 STL. (style) 式样、款式、类型 T或LTX或TX(telex) 电传 RMB (renminbi) 人民币 S/M (shipping marks) 装船标记 PR或PRC (price) 价格 PUR (purchase) 购买、购货 S/C (sales contract) 销售确认书 L/C (letter of credit) 信用证 B/L (bill of lading) 提单 FOB (free on board) 离岸价 CIF (cost,insurance&freight) 成本、保险加运费价GMO (genetically modified organism) 转基因组织
第五版外贸英语函电课后答案
第五版外贸英语函电课后答案 外贸英语函电答案 外贸函电答案 Keys to the exercises Unit 2 3. (1) We are one of the leading importers dealing in electronic products in the area, and take this opportunity to approach you in the hope of establishing business relations. (2) We have been engaged in handling importing and exporting of machinery and equipment for many years, and our products have enjoyed great popularity in many countries. (3) We owe your name and address to the Commercial Counselor’s office of our Embassy in Beijing. (4) We are given to understand that you are a manufacturer of daily chemicals. One of our clients intends to buy cosmetics from your country. We will appreciate it highly if you can airmail the catalogue and the price list of your products available at present. (5) For our credit standing, please refer to the Bank of China, Shanghai Branch. Unit 3 2.
27种外贸函电格式(四)
27种外贸函电格式(四) 22、非正式的预约要求 Could we meet some time this month to discuss the hypermarket proposal? We want to make decision by the beginning of next month. We would very much like to hear your thoughts before we make any definite plans. Could you choose a venue for the meeting? I can fly to London any time, Perhaps you would prefer Lyon or Paris? I leave it to you to choose. I look forward to seeing you again. 您好!未知能否于本月会面，商谈有关特大自助市场的建议呢?我们准备于下月初作出最后决定。在未订下明确计划之前，希望能咨询的意见。敢问能否选定会面地点?在伦敦、巴黎或里昂商谈都可以，悉随尊便。期待与您见面。 23、物色代理商 Our company manufactures a range of printing presses that are used successfully by companies in over 20 countries. A product specification brochure is enclosed. We are considering expanding our products to new markets and we would appreciate you assistance. In particular , we would like to identify the best agents who are currently serving the printing industryin your region. We are looking for organizations which conduct their business in a truly professional manner. They must be fully conversant with thetechnical side of the printing industry and have a comprehensive understanding of all the features of the lines t6hey represent. We would be very grateful if you could take a few moments to send us the names of three or four organizations that match our requirements.We shall then contact them to explore the possibility of establishing a mutually acceptable business relationship. Thank you very much for your time and consideration in this matter. 本公司生产的一系列印刷机，获二十多个国家的公司采用。随函附上产品规格说明书，谨供参考。现为该产品开拓新市场，希望得知贵地区从事印刷工业的代理商资料。如蒙贵公司协助，将不胜感激。如能拨冗寄来数个符合上述要求代理商商号，则感激不尽。本公司将与其联系，研究能否建立互惠互利折业务关系。右蒙惠告，不胜感荷! 24、欢迎新代理商
七种外贸函电英文模板
七种外贸函电英文模板 1.主动跟新买家建立联系 Dear Mr. Jones, We understand from your information posted on https://www.wendangku.net/doc/3717805062.html, that you are in the market for textiles. We would like to take this opportunity to introduce our company and products, with the hope that we may work with Bright Ideas Imports in the future. We are a joint venture specializing in the manufacture and export of textiles. We have enclosed our catalog, which introduces our company in detail and covers the main products we supply at present. You may also visit our online company introduction at …….com which includes our latest product line. Should any of these items be of interest to you, please let us know. We will be happy to give you a quotation upon receipt of your detailed requirements. We look forward to receiving your enquires soon. Sincerely, John Roberts 2.对新买家要求建立业务联系的回复
英文外贸函电——建立贸易关系
Dear Sirs Having had your name and address from the Commercial Counsellor's Office of our Embassy in Pakistan,we avail ourselves of this opportunity to write to you and see if we can establish business relations with you. We are a state-owned corporation sepcializing in the export of table-cloths,and are in a position to accept orders against customers'samples specifying design,specifications and packaging are also prepared to accept orders for goods with customers'own trade marks or brand names. In order to give you a rough idea of our various table-cloths,we are airmailling you under separate cover a copy of our latest catalogue for your you find any of the items interesting,please let us know as soon as shall be glad to send you quotations and samples upon receipt of your concrete enquiries. We await your early reply. Yours faithfully Dear Sirs, We known your name and address from the website of and note with pleasure the items of your demand just fall within the scope of our business line. First of all, we avail ourselves of this opportunity to introduce our company in order to be acquainted with you. (我们从阿里巴巴网站上看到您公司的名称和地址，并且很高兴地了解到您需要的产品正好符合我们的业务范围。我们很荣幸有这个机会向您介绍我们的公司。) Our firm is an Chinese exporter of various Canned Foodstuffs. We highly hope to establish business relations with your esteemed company on the basis of mutual benefit in an earlier date. we are sending a catalogue and a pricelist under separate cover for your reference. We will submit our best price to you upon receipt of your concrete inquiry. (我公司是一家中国的出口企业，主营各类罐头食品。我们非常希望能在双赢的基础上尽早同贵公司建立业务关系。我们给您发出了产品目录和价格表以供参考。如果能够收到您具体的询盘，我们将为您提供最优惠的价格。) We are looking forward to receiving your earlier reply. (期待您的尽早回复。) Yours faithfully,
外贸函电exercises
习题： Chapter 1 Establishing Business Relations Exercise 1: Choose the best answer to complete the following sentences. 1. We are looking forward to from you soon. A. hearing B. hear C. heard D. be heard 2. Your name and address to us by the Commonwealth Bank. A. have given B. have been given C. give D. given 3. in 1935, this company specializes in the exportation of cotton piece goods. A. Establish B. Established C. Establishing D. To be established 4. We take the pleasure of introducing ourselves an experienced importer line of daily products. A. of, on B. as, in C. for, by D. be, at 5. please find the catalogues and the latest price list. A. Enclose B. Enclosing C. Enclosed D. Enclosure 6. As the goods within the scope of our business activities, please contact us at once. A. fall B. falls C. fell D. felling 7. We are a Sino-Korean Joint Venture silk clothes. A. deal in B. dealing in C. dealt in D. engage 8. We are sending you by separate cover the samples, you will find them satisfactory. A. to hope B. hoping C. hopefully D. hope 9. We hope to enter business relations your firm. A. into, with B. with, into C. /, at D. with, at 10. will be appreciated. A. You reply our letter early B. You reply to our letter early C. Your early reply our letter D. Your early reply to our letter Exercise 2: Translate the following sentences into Chinese. 1. We’ve come to know your name and address from the Commercial Counselor’s Office of the Chinese Embassy in London. 2. Having obtained your name and address from the Bank of China, we are writing to you with a view of establishing trade relations with you. 3. We are writing to you in the hope that we can open up business relations with your firm. 4. We enclose herewith a list of goods to supply you at the lowest possible price. 5.By the courtesy of Mr. Black, we are given to understand the name and address of your firm.