Corporate finance : theory and practice / Pierre Vernimmen [and four others].

Format:

Book

Author/Creator:

Vernimmen, Pierre, author.

Series:

THEi Wiley ebooks.

THEi Wiley ebooks

Language:

English

Subjects (All):

Business enterprises--Finance.

Business enterprises.

Corporations--Finance.

Corporations.

Physical Description:

1 online resource (1,010 pages) : color illustrations

Edition:

Fifth edition.

Place of Publication:

Hoboken : Wiley, 2018.

System Details:

Access using campus network via VPN at home (THEi Users Only).

Summary:

"Corporate Finance: Theory and Practice continues to hold sway as one of the most popular financial textbooks, thanks to its four unique features: A balanced blend of theory and practice: authors hold academic positions at top ranking universities and business schools and are also investment bankers, private investors or sit on the boards of listed and unlisted companies A presentation of concepts that explain situations, followed by a discussion of techniques in a direct and succinct style Content enriched by the www.vernimmen.com website, which with 1,500 daily visitors is one of the leading finance teaching sites worldwide Free monthly updates on finance through The Vernimmen.com Newsletter, with over 60,000 subscribers The authors draw on their dual experience to enhance and expand the content of this new, fifth edition to reflect the latest developments, in particular, the change to accounting for operating leases under both IFRS and US GAAP which will take place in 2018. The numerous statistical tables and graphs throughout the text are fully updated with the latest available information"-- Provided by publisher.

Contents:

Intro

Corporate Finance

About the Authors

Summary

Preface

Frequently used symbols

1 WHAT IS CORPORATE FINANCE?

1.1 THE FINANCIAL MANAGER IS FIRST AND FOREMOST A SALESMAN . . .

1.2 ... OF FINANCIAL SECURITIES . . .

1.3 ... VALUED CONTINUOUSLY BY THE FINANCIAL MARKETS

1.4 MOST IMPORTANTLY, HE IS A NEGOTIATOR . . .

1.5 ... WHO NEVER FORGETS TO DO AN OCCASIONAL REALITY CHECK!

1.6 ... HE IS ALSO NOW A RISK MANAGER

Section I Financial analysis

Part One Fundamental concepts in financial analysis

2 CASH FLOW

2.1 CLASSIFYING COMPANY CASH FLOWS

2.2 OPERATING AND INVESTMENT CYCLES

2.3 FINANCIAL RESOURCES

3 EARNINGS

3.1 ADDITIONS TO WEALTH AND DEDUCTIONS FROM WEALTH

3.2 DIFFERENT INCOME STATEMENT FORMATS

4 CAPITAL EMPLOYED AND INVESTED CAPITAL

4.1 THE BALANCE SHEET: DEFINITIONS AND CONCEPTS

4.2 A CAPITAL-EMPLOYED ANALYSIS OF THE BALANCE SHEET

4.3 A SOLVENCY-AND-LIQUIDITY ANALYSIS OF THE BALANCE SHEET

4.4 A DETAILED EXAMPLE OF A CAPITAL-EMPLOYED BALANCE SHEET

5 WALKING THROUGH FROM EARNINGS TO CASH FLOW

5.1 ANALYSIS OF EARNINGS FROM A CASH FLOW PERSPECTIVE

5.2 CASH FLOW STATEMENT

6 GETTING TO GRIPS WITH CONSOLIDATED ACCOUNTS

6.1 CONSOLIDATION METHODS

6.2 CONSOLIDATION-RELATED ISSUES

6.3 TECHNICAL ASPECTS OF CONSOLIDATION

7 HOW TO COPE WITH THE MOST COMPLEX POINTS IN FINANCIAL ACCOUNTS

7.1 ACCRUALS

7.2 CASH ASSETS

7.3 CONSTRUCTION CONTRACTS

7.4 CONVERTIBLE BONDS AND LOANS

7.5 CURRENCY TRANSLATION ADJUSTMENTS

7.6 DEFERRED TAX ASSETS AND LIABILITIES

7.7 DILUTION PROFIT AND LOSSES

7.8 FINANCIAL HEDGING INSTRUMENTS

7.9 IMPAIRMENT LOSSES

7.10 INTANGIBLE FIXED ASSETS

7.11 INVENTORIES

7.12 LEASES

7.13 OFF-BALANCE-SHEET COMMITMENTS

7.14 PENSIONS AND OTHER EMPLOYEE BENEFITS

7.15 PREFERENCE SHARES

7.16 PROVISIONS.

7.17 STOCK OPTIONS

7.18 TANGIBLE ASSETS

7.19 TREASURY SHARES

Part Two Financial analysis and forecasting

8 How TO PERFORM A FINANCIAL ANALYSIS

8.1 WHAT IS FINANCIAL ANALYSIS?

8.2 ECONOMIC ANALYSIS OF COMPANIES

8.3 AN ASSESSMENT OF A COMPANY'S ACCOUNTING POLICY

8.4 STANDARD FINANCIAL ANALYSIS PLAN

8.5 THE VARIOUS TECHNIQUES OF FINANCIAL ANALYSIS

8.6 RATINGS

8.7 SCORING TECHNIQUES

8.8 EXPERT SYSTEMS

9 MARGIN ANALYSIS: STRUCTURE

9.1 How OPERATING PROFIT IS FORMED

9.2 How OPERATING PROFIT IS ALLOCATED

9.3 STANDARD INCOME STATEMENTS (INDIVIDUAL AND CONSOLIDATED ACCOUNTS)

9.4 FINANCIAL ASSESSMENT

9.5 CASE STUDY: ARCELORMITTAL

10 MARGIN ANALYSIS: RISKS

10.1 HOW OPERATING LEVERAGE WORKS

10.2 A MORE REFINED ANALYSIS PROVIDES GREATER INSIGHT

10.3 FROM ANALYSIS TO FORECASTING: THE CONCEPT OF NORMATIVE MARGIN

10.4 CASE STUDY: ARCELORMITTAL

11 WORKING CAPITAL AND CAPITAL EXPENDITURES

11.1 THE NATURE OF WORKING CAPITAL

11.2 WORKING CAPITAL TURNOVER RATIOS

11.3 READING BETWEEN THE LINES OF WORKING CAPITAL

11.4 ANALYSING CAPITAL EXPENDITURES (CAPEX)

11.5 CASE STUDY: ARCELORMITTAL

12 FINANCING

12.1 A DYNAMIC ANALYSIS OF THE COMPANY'S FINANCING

12.2 A STATIC ANALYSIS OF THE COMPANY'S FINANCING

12.3 CASE STUDY: ARCELORMITTAL

13 RETURN ON CAPITAL EMPLOYED AND RETURN ON EQUITY

13.1 ANALYSIS OF CORPORATE PROFITABILITY

13.2 LEVERAGE EFFECT

13.3 USES AND LIMITATIONS OF THE LEVERAGE EFFECT

13.4 CASE STUDY: ARCELORMITTAL

14 CONCLUSION OF FINANCIAL ANALYSIS

14.1 SOLVENCY

14.2 VALUE CREATION

14.3 FINANCIAL ANALYSIS WITHOUT THE RELEVANT ACCOUNTING DOCUMENTS

14.4 CASE STUDY: ARCELORMITTAL

Section II Investors and markets

Part One Investment decision rules

15 THE FINANCIAL MARKETS

15.1 THE RISE OF CAPITAL MARKETS.

15.2 THE FUNCTIONS OF A FINANCIAL SYSTEM

15.3 THE RELATIONSHIP BETWEEN BANKS AND COMPANIES

15.4 THEORETICAL FRAMEWORK: EFFICIENT MARKETS

15.5 ANOTHER THEORETICAL FRAMEWORK UNDER CONSTRUCTION: BEHAVIOURAL FINANCE

15.6 INVESTORS' BEHAVIOUR

16 THE TIME VALUE OF MONEY AND NET PRESENT VALUE

16.1 CAPITALISATION

16.2 DISCOUNTING

16.3 PRESENT VALUE AND NET PRESENT VALUE OF A FINANCIAL SECURITY

16.4 WHAT DOES NET PRESENT VALUE DEPEND ON?

16.5 SOME EXAMPLES OF SIMPLIFICATION OF PRESENT VALUE CALCULATIONS

17 THE INTERNAL RATE OF RETURN

17.1 How IS INTERNAL RATE OF RETURN DETERMINED?

17.2 INTERNAL RATE OF RETURN AS AN INVESTMENT CRITERION

17.3 THE LIMITS OF THE INTERNAL RATE OF RETURN

17.4 SOME MORE FINANCIAL MATHEMATICS: INTEREST RATE AND YIELD TO MATURITY

Part Two The risk of securities and the required rate of return

18 RISK AND RETURN

18.1 SOURCES OF RISK

18.2 RISK AND FLUCTUATION IN THE VALUE OF A SECURITY

18.3 TOOLS FOR MEASURING RETURN AND RISK

18.4 MARKET AND SPECIFIC RISK

18.5 THE BETA COEFFICIENT

18.6 PORTFOLIO RISK

18.7 CHOOSING AMONG SEVERAL RISKY ASSETS AND THE EFFICIENT FRONTIER

18.8 CHOOSING BETWEEN SEVERAL RISKY ASSETS AND A RISK-FREE ASSET: THE CAPITAL MARKET LINE

18.9 How PORTFOLIO MANAGEMENT WORKS

19 THE REQUIRED RATE OF RETURN

19.1 RETURN REQUIRED BY INVESTORS: THE CAPM

19.2 PROPERTIES OF THE CAPM

19.3 LIMITS OF THE CAPM

19.4 MULTIFACTOR MODELS

19.5 FRACTALS AND OTHER LEADS

19.6 TERM STRUCTURE OF INTEREST RATES

Part Three Financial securities

20 BONDS

20.1 BASIC CONCEPTS

20.2 THE YIELD TO MATURITY

20.3 FLOATING-RATE BONDS

20.4 SOCIALLY RESPONSIBLE BONDS

20.5 THE VOLATILITY OF DEBT SECURITIES

20.6 DEFAULT RISK AND THE ROLE OF RATING

21 OTHER DEBT PRODUCTS.

21.1 MARKETABLE DEBT SECURITIES

21.2 BANK DEBT PRODUCTS

21.3 FINANCING LINKED TO AN ASSET OF THE FIRM

22 SHARES

22.1 BASIC CONCEPTS

22.2 MULTIPLES

22.3 KEY MARKET DATA

22.4 How TO PERFORM A STOCK MARKET ANALYSIS

22.5 ADJUSTING PER SHARE DATA FOR TECHNICAL FACTORS

23 OPTIONS

23.1 DEFINITION AND THEORETICAL FOUNDATION OF OPTIONS

23.2 MECHANISMS USED IN PRICING OPTIONS

23.3 ANALYSING OPTIONS

23.4 PARAMETERS TO VALUE OPTIONS

23.5 METHODS FOR PRICING OPTIONS

23.6 TOOLS FOR MANAGING AN OPTIONS POSITION

24 HYBRID SECURITIES

24.1 WARRANTS

24.2 CONVERTIBLE BONDS

24.3 PREFERENCE SHARES

24.4 OTHER HYBRID SECURITIES

25 SELLING SECURITIES

25.1 GENERAL PRINCIPLES IN THE SALE OF SECURITIES

25.2 INITIAL PUBLIC OFFERINGS

25.3 CAPITAL INCREASES

25.4 BLOCK TRADES OF SHARES

25.5 BONDS

25.6 CONVERTIBLE AND EXCHANGEABLE BONDS

25.7 SYNDICATED LOANS

Section III Value

26 VALUE AND CORPORATE FINANCE

26.1 THE PURPOSE OF FINANCE IS TO CREATE VALUE

26.2 VALUE CREATION AND MARKETS IN EQUILIBRIUM

26.3 VALUE AND ORGANISATION THEORIES

26.4 How CAN WE CREATE VALUE?

26.5 VALUE AND TAXATION

27 MEASURING VALUE CREATION

27.1 OVERVIEW OF THE DIFFERENT CRITERIA

27.2 NPV, THE ONLY RELIABLE CRITERION

27.3 FINANCIAL/ACCOUNTING CRITERIA

27.4 MARKET CRITERIA

27.5 ACCOUNTING CRITERIA

27.6 PUTTING THINGS INTO PERSPECTIVE

28 INVESTMENT CRITERIA

28.1 THE PREDOMINANCE OF NPV AND THE IMPORTANCE OF IRR

28.2 THE MAIN LINES OF REASONING

28.3 WHICH CASH FLOWS ARE IMPORTANT?

28.4 OTHER INVESTMENT CRITERIA

29 THE COST OF CAPITAL

29.1 THE COST OF CAPITAL AND THE RISK OF ASSETS

29.2 ALTERNATIVE METHODS FOR ESTIMATING THE COST OF CAPITAL

29.3 SOME PRACTICAL APPLICATIONS

29.4 CAN CORPORATE MANAGERS INFLUENCE THE COST OF CAPITAL?.

30 RISK AND INVESTMENT ANALYSIS

30.1 ASSESSING RISK THROUGH THE BUSINESS PLAN

30.2 ASSESSING RISK THROUGH A MATHEMATICAL APPROACH

30.3 THE CONTRIBUTION OF REAL OPTIONS

31 VALUATION TECHNIQUES

31.1 OVERVIEW OF THE DIFFERENT METHODS

31.2 VALUATION BY DISCOUNTED CASH FLOW

31.3 MULTIPLE APPROACH OR PEER-GROUP COMPARISONS

31.4 THE SUM-OF-THE-PARTS METHOD (SOTP) OR NET ASSET VALUE (NAV)

31.5 COMPARISON OF VALUATION METHODS

31.6 PREMIUMS AND DISCOUNTS

Section IV Corporate financial policies

Part One Capital structure policies

32 CAPITAL STRUCTURE AND THE THEORY OF PERFECT CAPITAL MARKETS

32.1 THE VALUE OF CAPITAL EMPLOYED

32.2 DEBT AND EQUITY

32.3 WHAT OUR GRANDPARENTS THOUGHT

32.4 THE CAPITAL STRUCTURE POLICY IN PERFECT FINANCIAL MARKETS

33 CAPITAL STRUCTURE, TAXES AND ORGANISATION THEORIES

33.1 THE BENEFITS OF DEBT OR THE TRADE-OFF MODEL

33.2 DEBT TO CONTROL MANAGEMENT

33.3 SIGNALLING AND DEBT POLICY

33.4 INFORMATION ASYMMETRIES AND THE PECKING ORDER THEORY

34 DEBT, EQUITY AND OPTIONS THEORY

34.1 ANALYSING THE FIRM IN LIGHT OF OPTIONS THEORY

34.2 CONTRIBUTION OF OPTIONS THEORY TO THE VALUATION OF EQUITY

34.3 USING OPTIONS THEORY TO ANALYSE A COMPANY'S FINANCIAL DECISIONS

34.4 RESOLVING CONFLICTS BETWEEN SHAREHOLDERS AND CREDITORS

34.5 ANALYSING THE FIRM'S LIQUIDITY

34.6 CONCLUSION

35 WORKING OUT DETAILS: THE DESIGN OF THE CAPITAL STRUCTURE

35.1 THE MAJOR CONCEPTS

35.2 How TO CHOOSE A CAPITAL STRUCTURE

35.3 EFFECTS OF THE FINANCING CHOICE ON ACCOUNTING AND FINANCIAL CRITERIA

Part Two Equity capital

36 RETURNING CASH TO SHAREHOLDERS

36.1 REINVESTED CASH FLOW AND THE VALUE OF EQUITY

36.2 INTERNAL FINANCING AND FINANCIAL CRITERIA

36.3 WHY RETURN CASH TO SHAREHOLDERS?

37 DISTRIBUTION IN PRACTICE: DIVIDENDS AND SHARE BUY-BACKS

37.1 DIVIDENDS.

37.2 EXCEPTIONAL DIVIDENDS, SHARE BUY-BACKS AND CAPITAL REDUCTION.

Notes:

Includes index.

Revised edition of Corporate finance, 2014.

Description based on print version record.

Includes bibliographical references.

ISBN:

9781119451808

1119451809

9781119424529

1119424526

9781119424444

1119424445

OCLC:

993624090