Fundamentals of Corporate Finance.

Intro -- Cover -- Halftitle -- Title -- Copyright -- Didication -- About the Authors -- Preface from the Authors -- Coverage -- In-Text Study Features -- Comprehensive Teaching and Learning Package -- Instructors: Student Success Starts with You -- Students: Get Learning that Fits You -- Acknowledgments -- Brief Contents -- Contents -- In Their Own Words Boxes -- Pedagogical Use of Color -- Part 1: Overview of Corporate Finance -- Chapter 1: Introduction to Corporate Finance -- 1.1 Finance: A Quick Look -- Finance: The Five Main Areas -- Corporate Finance -- Investments -- Financial Institutions -- International Finance -- Fintech -- Why Study Finance? -- Marketing and Finance -- Accounting and Finance -- Management and Finance -- Technology and Finance -- You and Finance -- 1.2 Corporate Finance and the Financial Manager -- What is Corporate Finance? -- The Financial Manager -- Financial Management Decisions -- Capital Budgeting -- Capital Structure -- Working Capital Management -- Conclusion -- 1.3 Forms of Business Organization -- Sole Proprietorship -- Partnership -- Corporation -- A Corporation by Another Name . . . -- Benefit Corporation -- 1.4 The Goal of Financial Management -- Possible Goals -- The Goal of Financial Management -- A More General Goal -- Sarbanes-Oxley -- 1.5 The Agency Problem and Control of the Corporation -- Agency Relationships -- Management Goals -- Do Managers Act in the Stockholders' Interests? -- Managerial Compensation -- Control of the Firm -- Conclusion -- Stakeholders -- 1.6 Financial Markets and the Corporation -- Cash Flows to and from the Firm -- Primary versus Secondary Markets -- Primary Markets -- Secondary Markets -- Dealer versus Auction Markets -- Trading in Corporate Securities -- Listing -- 1.7 Summary and Conclusions -- Chapter 2: Financial Statements, Taxes, and Cash Flow -- 2.1 The Balance Sheet.

Assets: The Left Side -- Liabilities and Owners' Equity: The Right Side -- Net Working Capital -- Liquidity -- Debt versus Equity -- Market Value versus Book Value -- 2.2 The Income Statement -- GAAP and the Income Statement -- Noncash Items -- Time and Costs -- 2.3 Taxes -- Corporate Tax Rates -- Average versus Marginal Tax Rates -- 2.4 Cash Flow -- Cash Flow from Assets -- Operating Cash Flow -- Capital Spending -- Change in Net Working Capital -- Conclusion -- A Note about "Free" Cash Flow -- Cash Flow to Creditors and Stockholders -- Cash Flow to Creditors -- Cash Flow to Stockholders -- An Example: Cash Flows for Dole Cola -- Operating Cash Flow -- Net Capital Spending -- Change in NWC and Cash Flow from Assets -- Cash Flow to Stockholders and Creditors -- 2.5 Summary and Conclusions -- Part 2: Financial Statements and Long-Term Financial Planning -- Chapter 3: Working with Financial Statements -- 3.1 Cash Flow and Financial Statements: A Closer Look -- Sources and Uses of Cash -- The Statement of Cash Flows -- 3.2 Standardized Financial Statements -- Common-Size Statements -- Common-Size Balance Sheets -- Common-Size Income Statements -- Common-Size Statements of Cash Flows -- Common-Base Year Financial Statements: Trend Analysis -- Combined Common-Size and Base Year Analysis -- 3.3 Ratio Analysis -- Short-Term Solvency, or Liquidity, Measures -- Current Ratio -- The Quick (or Acid-Test) Ratio -- Other Liquidity Ratios -- Long-Term Solvency Measures -- Total Debt Ratio -- A Brief Digression: Total Capitalization versus Total Assets -- Times Interest Earned -- Cash Coverage -- Asset Management, or Turnover, Measures -- Inventory Turnover and Days' Sales in Inventory -- Receivables Turnover and Days' Sales in Receivables -- Asset Turnover Ratios -- Profitability Measures -- Profit Margin -- Return on Assets -- Return on Equity.

Market Value Measures -- Price-Earnings Ratio -- Price-Sales Ratio -- Market-to-Book Ratio -- Enterprise Value-EBITDA Multiple -- A Note on Ratio Analysis -- Conclusion -- 3.4 The DuPont Identity -- A Closer Look at ROE -- An Expanded DuPont Analysis -- 3.5 Using Financial Statement Information -- Why Evaluate Financial Statements? -- Internal Uses -- External Uses -- Choosing a Benchmark -- Time Trend Analysis -- Peer Group Analysis -- Problems with Financial Statement Analysis -- 3.6 Summary and Conclusions -- Chapter 4: Long-Term Financial Planning and Growth -- 4.1 What Is Financial Planning? -- Growth as a Financial Management Goal -- Dimensions of Financial Planning -- What Can Planning Accomplish? -- Examining Interactions -- Exploring Options -- Avoiding Surprises -- Ensuring Feasibility and Internal Consistency -- Conclusion -- 4.2 Financial Planning Models: A First Look -- A Financial Planning Model: The Ingredients -- Sales Forecast -- Pro Forma Statements -- Asset Requirements -- Financial Requirements -- The Plug -- Economic Assumptions -- A Simple Financial Planning Model -- 4.3 The Percentage of Sales Approach -- The Income Statement -- The Balance Sheet -- A Particular Scenario -- An Alternative Scenario -- 4.4 External Financing and Growth -- EFN and Growth -- Financial Policy and Growth -- The Internal Growth Rate -- The Sustainable Growth Rate -- Determinants of Growth -- A Note about Sustainable Growth Rate Calculations -- 4.5 Some Caveats Regarding Financial Planning Models -- 4.6 Summary and Conclusions -- Part 3: Valuation of Future Cash Flows -- Chapter 5: Introduction to Valuation: The Time Value of Money -- 5.1 Future Value and Compounding -- Investing for a Single Period -- Investing for More Than One Period -- A Note about Compound Growth -- 5.2 Present Value and Discounting -- The Single-Period Case.

Present Values for Multiple Periods -- 5.3 More about Present and Future Values -- Present versus Future Value -- Determining the Discount Rate -- Finding the Number of Periods -- 5.4 Summary and Conclusions -- Chapter 6: Discounted Cash Flow Valuation -- 6.1 Future and Present Values of Multiple Cash Flows -- Future Value with Multiple Cash Flows -- Present Value with Multiple Cash Flows -- A Note about Cash Flow Timing -- 6.2 Valuing Level Cash Flows: Annuities and Perpetuities -- Present Value for Annuity Cash Flows -- Annuity Tables -- Finding the Payment -- Finding the Rate -- Future Value for Annuities -- A Note about Annuities Due -- Perpetuities -- Growing Annuities and Perpetuities -- 6.3 Comparing Rates: The Effect of Compounding -- Effective Annual Rates and Compounding -- Calculating and Comparing Effective Annual Rates -- EARs and APRs -- Taking It to the Limit: A Note about Continuous Compounding -- 6.4 Loan Types and Loan Amortization -- Pure Discount Loans -- Interest-Only Loans -- Amortized Loans -- 6.5 Summary and Conclusions -- Chapter 7: Interest Rates and Bond Valuation -- 7.1 Bonds and Bond Valuation -- Bond Features and Prices -- Bond Values and Yields -- Interest Rate Risk -- Finding the Yield to Maturity: More Trial and Error -- 7.2 More about Bond Features -- Is it Debt or Equity? -- Long-Term Debt: The Basics -- The Indenture -- Terms of a Bond -- Security -- Seniority -- Repayment -- The Call Provision -- Protective Covenants -- 7.3 Bond Ratings -- 7.4 Some Different Types of Bonds -- Government Bonds -- Zero Coupon Bonds -- Floating-Rate Bonds -- Other Types of Bonds -- Sukuk -- 7.5 Bond Markets -- How Bonds Are Bought and Sold -- Bond Price Reporting -- A Note about Bond Price Quotes -- 7.6 Inflation and Interest Rates -- Real versus Nominal Rates -- The Fisher Effect -- Inflation and Present Values.

7.7 Determinants of Bond Yields -- The Term Structure of Interest Rates -- Bond Yields and the Yield Curve: Putting it all Together -- Conclusion -- 7.8 Summary and Conclusions -- Chapter 8: Stock Valuation -- 8.1 Common Stock Valuation -- Cash Flows -- Some Special Cases -- Zero Growth -- Constant Growth -- Nonconstant Growth -- Two-Stage Growth -- Components of the Required Return -- Stock Valuation Using Multiples -- 8.2 Some Features of Common and Preferred Stocks -- Common Stock Features -- Shareholder Rights -- Proxy Voting -- Classes of Stock -- Other Rights -- Dividends -- Preferred Stock Features -- Stated Value -- Cumulative and Noncumulative Dividends -- Is Preferred Stock Really Debt? -- 8.3 The Stock Markets -- Dealers and Brokers -- Organization of the NYSE -- Members -- Operations -- Floor Activity -- Nasdaq Operations -- ECNs -- Stock Market Reporting -- 8.4 Summary and Conclusions -- Part 4: Capital Budgeting -- Chapter 9: Net Present Value and other Investment Criteria -- 9.1 Net Present Value -- The Basic Idea -- Estimating Net Present Value -- 9.2 The Payback Rule -- Defining the Rule -- Analyzing the Rule -- Redeeming Qualities of the Rule -- Summary of the Rule -- 9.3 The Discounted Payback -- 9.4 The Average Accounting Return -- 9.5 The Internal Rate of Return -- Problems with the IRR -- Nonconventional Cash Flows -- Mutually Exclusive Investments -- Investing or Financing? -- Redeeming Qualities of the IRR -- The Modified Internal Rate of Return (MIRR) -- Method 1: The Discounting Approach -- Method 2: The Reinvestment Approach -- Method 3: The Combination Approach -- MIRR or IRR: Which Is Better? -- 9.6 The Profitability Index -- 9.7 The Practice of Capital Budgeting -- 9.8 Summary and Conclusions -- Chapter 10: Making Capital Investment Decisions -- 10.1 Project Cash Flows: A First Look -- Relevant Cash Flows.

The Stand-Alone Principle.

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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2024. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.