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The fundamental principles of finance / Robert Irons.
- Format:
- Book
- Author/Creator:
- Irons, Robert, author.
- Language:
- English
- Subjects (All):
- Corporations--Finance.
- Corporations.
- Physical Description:
- 1 online resource (xi, 210 pages) : illustrations
- Edition:
- 1st ed.
- Place of Publication:
- New York, New York ; London : Routledge, [2020]
- Summary:
- The Fundamental Principles of Finance offers a new and innovative approach to financial theory. The book introduces three fundamental principles of finance that flow throughout the theoretical material covered in most corporate finance textbooks.
- Contents:
- Cover
- Half Title
- Title
- Copyright
- Contents
- List of Figures
- List of Tables
- 1 The Fundamental Principles of Finance
- The Three Fundamental Principles of Finance
- The Three Precepts
- Differentiating Between the Principles and the Precepts
- Making Use of the Principles and Precepts
- Summary
- End of Chapter Problems
- 2 Time Value of Money
- The Cost of Money
- The Fundamental Principles in Action
- Understanding Why Money Has Time Value-Economic Equivalency
- Adjusting Cash Flow Values Over Time
- Future Value and Compounding
- FV of a Single Cash Flow
- FV of Uneven Cash Flows
- Present Value and Discounting
- PV of a Single Cash Flow
- Determining the Correct Exponent
- PV of Uneven Cash Flows
- Compounding/Discounting More Often Than Annually
- The Effective Annual Rate (EAR)
- The Impact of EAR on FV and PV Calculations of Single Cash Flows
- Annuities
- Future Value of an Ordinary Annuity
- Future Value of an Annuity Due
- Present Value of an Ordinary Annuity
- Present Value of an Annuity Due
- A Simple Understanding of the Annuity Due Value
- Perpetuities
- Amortized Loans
- Solving for Other Variables in the TVM Calculations
- Discrete Time vs. Continuous Time
- Summary of the Principles and Precepts Applied in This Chapter
- 3 Risk and Return
- Measuring Return
- Annualized Return
- Average Returns
- Expected Return and Risk
- Risk and Risk Aversion
- The Relationship Between Risk and Return
- Types of Risk
- Business Risk
- The Coefficient of Variation of EBIT
- The Coefficient of Variation of the Operating Margin
- The Degree of Operating Leverage
- Financial Risk
- The Coefficient of Variation of Net Income
- The Coefficient of Variation of the Net Margin
- The Degree of Financial Leverage.
- Degree of Combined Leverage
- Portfolio Risk
- Measuring Portfolio Risk
- Beta
- Portfolio Risk and Return
- Relevant Risk and Required Return-The CAPM
- Excel Project
- 4 The Term Structure of Interest Rates
- Real vs. Nominal Interest Rates-The Effects of Inflation
- The Determinants of Interest Rates
- The Default Risk Premium
- The Liquidity Risk Premium
- The Maturity Risk Premium
- Determining Interest Rates
- The Yield Curve
- Bond Yields vs. Stock Returns-The Fed Model
- 5 Bonds and Bond Valuation
- The Basics of Bonds
- Calculating the Value of a Bond
- Bond Values Over Time
- Using Excel to Calculate Bond Prices
- Calculating a Bond's Yield to Maturity
- Calculating a Bond's Yield to Call
- Duration and Its Use
- 6 Stocks and Stock Valuation
- The Basics of Stocks
- The Dividend Discount Model
- Preferred Stock Valuation
- Common Stock Valuation With Dividends-Constant Growth
- Common Stock Valuation With Dividends-Non-Constant Growth
- Common Stock Valuation Without Dividends-The Cash Flow From Assets Model
- Understanding Operating Accounts
- Calculating Cash Flow From Assets
- Using the Cash Flow From Assets Model to Value a Firm's Common Equity
- 7 Capital Budgeting Decision Methods
- The Capital Budgeting Decision Methods
- The Payback Period
- The Discounted Payback Period.
- The Net Present Value
- The Internal Rate of Return
- Comparing the NPV and IRR Methods
- The Modified Internal Rate of Return
- Evaluating Capital Budgeting Projects
- Cash Flow Estimation
- Relevant Cash Flows
- Changes in Net Working Capital
- Initial Cash Flows
- Operating Cash Flows
- Terminal Cash Flows
- Net Operating Cash Flow
- Paying Attention to Details
- The Truth of PR2
- Adjusting for Risk in the Capital Budgeting Analysis Process
- The Investment Opportunity Schedule
- Replacement Project Analysis
- 8 Capital Structure and the WACC
- Understanding Capital Structure and Its Effects
- The Component Costs of Capital
- The After-Tax Cost of Debt
- The Cost of Preferred Equity
- The Cost of Internal Common Equity
- The CAPM Approach
- The DDM Approach
- The Cost of External Common Equity
- Determining the Weights for the Component Costs
- Putting It All Together
- Comprehensive Excel Problem
- 9 Analyzing and Forecasting Financial Statements
- Understanding the Financial Statements
- The Balance Sheet
- Current Assets
- Long-Term Assets
- Current Liabilities
- Long-Term Liabilities
- Equity
- The Income Statement
- The Statement of Cash Flows
- Statement of Retained Earnings
- Analyzing the Financial Statements
- Liquidity Ratios
- Asset Management Ratios
- Debt Management Ratios
- Profitability Ratios
- Market Value Ratios
- Value and Growth Metrics
- The Du Pont Equation
- Trend Analysis, Benchmarking, Common Size Analysis and Percent Change Analysis
- Benchmarking.
- Common Size Analysis and Percent Change Analysis
- Forecasting Financial Statements-The Percent of Sales Method
- Forecasting the Income Statement
- Forecasting the Balance Sheet
- Analyzing the Pro Forma Statements
- 10 Finance Within the Firm
- The Role of Finance
- Finance Is a Strategic Discipline
- The Intrinsic Value of the Firm
- Corporate Sustainability
- How to Maximize the Intrinsic Stock Price
- Types of Financial Decisions
- The Importance of Finance
- Careers in Finance
- Investments and Wealth Management
- Financial Markets and Institutions
- Financial Management
- Forms of Business Organization
- Proprietorship
- Partnership
- Corporation
- The Secret to a Successful Business
- 11 Legal and Ethical Issues in Finance
- Financial and Accounting Scandals
- WorldCom
- Enron
- Towers Financial
- Adelphia Communications
- Bayou Hedge Fund
- Refco
- Madoff Investment Securities
- Lessons From Financial Scandals
- Misusing Risk
- Lincoln Savings and Loan
- Proctor &
- Gamble and Bankers Trust
- Orange County, California
- Barings Bank
- Long Term Capital Management
- Lessons From Misusing Risk
- The 2008 Financial Crisis
- Agency Issues
- 12 Financial Markets and Institutions
- Financial Markets
- Primary Markets
- Secondary Markets
- Money Market
- Capital Market
- The Efficient Market Hypothesis
- Beating the Market
- The Three Levels of Market Efficiency
- Weak Form Efficiency
- Semi-Strong Form Efficiency
- Strong Form Efficiency
- A Way to View Market Efficiency
- Forces That Determine Market Efficiency
- Institutional Investors
- Financial Securities
- Money Market Securities
- Capital Market Securities
- Debt.
- Treasury Bonds
- Municipal Bonds
- Corporate Bonds
- Mutual Funds
- Derivative Securities
- Options
- Financial Institutions
- The Federal Reserve System
- Commercial Banks
- Savings and Loan Associations
- Credit Unions
- Finance Companies
- Insurance Companies
- Retirement Plans
- Index.
- Notes:
- Description based on print version record.
- ISBN:
- 1-000-02451-2
- 0-429-29497-2
- 1-000-02435-0
- 9780429294976
- OCLC:
- 1110709456
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