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1、外文翻译原文TheCostofCapital,CorporationFinanceandTheoryofInvestmentMaterialSource:http://ww.jstor.orAuthor:FrancoModigliani;MertonH.MillerA.CapitalStructureandInvestmentPolicyOnthebasisofourpropositionswithrespecttocostofcapitalandfinancialstructure(andforthemom
2、entneglectingtans),wecancoercivethefollowingsimpleruleforoptimalinvestmentpolicybythefirm:PropositionIII.Ifafirminclassisactinginthebestinterestofthestockholdersatthetimeofthedecision,itwillexploitaninvestmentopportunityifandonlyiftherateofreturnontheinvest
3、ment,say,isaslargeasorlargerthan.Thatis,thecut-offpointforinvestmentinthefirmwillinallcasesbeandwillbecompletelyunaffectedbythetypeofsecurityusedtofinancetheinvestment.Equivalently,wemaysaythatregardlessofthefinancingused,themarginalcostofcapitaltoafirmiseq
4、ualtotheaveragecostofcapital,whichisinturnequaltothecapitalizationrateforanunleveredstreamintheclasstowhichthefirmbelongs.Toestablishthisresultwewillconsiderthethreemajorfinancingalternativesopentothefirm-bonds,retainedearnings,andcommonstockissues-andshowt
5、hatineachcaseaninvestmentisworthundertakingif,andonlyif,.Considerfirstthecaseofaninvestmentfinancedbythesaleofbonds.WeknowfromPropositionIthatthemarketvalueofthefirmbeforetheinvestmentwasundertakenwas:(20)Andthatthevalueofthecommonstockwas:（21）Ifnowthefirmb
6、orrowsIdollarstofinanceaninvestmentyieldingitsmarketvaluewillbecome:（22）Andthevalueofitscommonstockwillbe:（23）Orusingequation21,（24）HenceToillustrate,supposethecapitalizationrateforuncertainstreamsintheclassis10percentandtherateofinterestis4percent.Thenifag
7、ivencompanyhadanexpectedincomeof1,000andifitwerefinancedentirelybycommonstockweknowfromPropositionIthatthemarketvalueofitsstockwouldbe10,000.Assumenowthatthemanagersofthefirmdiscoveraninvestmentopportunitywhichwillrequireanoutlayof100andwhichisexpectedtoyie
8、ld8percent.Atfirstsightthismightappeartobeaprofitableopportunitysincetheexpectedreturnisdoubletheinterestcost.If,however,themanagementborrowsthenecessary100at4percent,thetotalexpectedincomeofthecompany
