Machine generated contents note: Appendix 11A Is Beta Dead? ch. 1 Introduction to Corporate Finance -- 1.1. What Is Corporate Finance? -- Balance Sheet Model of the Firm -- Financial Manager -- 1.2. Corporate Firm -- Sole Proprietorship -- Partnership -- Corporation -- Corporation by Another Name -- 1.3. Importance of Cash Flows -- 1.4. Goal of Financial Management -- Possible Goals -- Goal of Financial Management -- More General Goal -- 1.5. Agency Problem and Control of the Corporation -- Agency Relationships -- Management Goals -- Do Managers Act in the Stockholders' Interests? -- Stakeholders -- 1.6. Regulation -- Securities Act of 1933 and the Securities Exchange Act of 1934 -- Sarbanes-Oxley -- Summary and Conclusions -- Concept Questions -- ch. 2 Financial Statements and Cash Flow -- 2.1. Balance Sheet -- Liquidity -- Debt versus Equity -- Value versus Cost -- 2.2. Income Statement -- Generally Accepted Accounting Principles -- Noncash Items -- Time and Costs -- 2.3. Taxes -- Corporate Tax Rates -- Average versus Marginal Tax Rates -- 2.4. Networking Capital -- 2.5. Financial Cash Flow -- 2.6. Accounting Statement of Cash Flows -- Cash Flow from Operating Activities -- Cash Flow from Investing Activities -- Cash Flow from Financing Activities -- 2.7. Cash Flow Management -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: Cash Flows at Warf Computers, Inc. -- ch. 3 Financial Statements Analysis and Financial Models -- 3.1. Financial Statements Analysis -- Standardizing Statements -- Common-Size Balance Sheets -- Common-Size Income Statements -- 3.2. Ratio Analysis -- Short-Term Solvency or Liquidity Measures -- Long-Term Solvency Measures -- Asset Management or Turnover Measures -- Profitability Measures -- Market Value Measures -- 3.3. DuPont Identity -- Closer Look at ROE -- Problems with Financial Statement Analysis -- 3.4. Financial Models -- Simple Financial Planning Model -- Percentage of Sales Approach -- 3.5. External Financing and Growth -- EFN and Growth -- Financial Policy and Growth -- Note about Sustainable Growth Rate Calculations -- 3.6. Some Caveats Regarding Financial Planning Models -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: Ratios and Financial Planning at East Coast Yachts -- pt. II Valuation and Capital Budgeting -- ch. 4 Discounted Cash Flow Valuation -- 4.1. Valuation: The One-Period Case -- 4.2. Multiperiod Case -- Future Value and Compounding -- Power of Compounding; A Digression -- Present Value and Discounting -- Finding the Number of Periods -- Algebraic Formula -- 4.3. Compounding Periods -- Distinction between Stated Annual Interest Rate and Effective Annual Pate -- Compounding over Many Years -- Continuous Compounding -- 4.4. Simplifications -- Perpetuity -- Growing Perpetuity -- Annuity -- Growing Annuity -- 4.5. Loan Amortization -- 4.6. What Is a Firm Worth? -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: The MBA Decision -- Appendix 4A Net Present Value: First Principles of Finance -- Appendix 4B Using Financial Calculators -- ch. 5 Net Present Value and Other Investment Rules -- 5.1. Why Use Net Present Value? -- 5.2. Payback Period Method -- Defining the Rule -- Problems with the Payback Method -- Managerial Perspective -- Summary of Payback -- 5.3. Discounted Payback Period Method -- 5.4. Internal Rate of Return -- 5.5. Problems with the IRR Approach -- Definition of Independent and Mutually Exclusive Projects -- Two General Problems Affecting Both Independent and Mutually Exclusive Projects -- Problems Specific to Mutually Exclusive Projects -- Redeeming Qualities of IRR -- Test -- 5.6. Profitability Index -- Calculation of Profitability Index -- 5.7. Practice of Capital Budgeting -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: Bullock Gold Mining -- ch. 6 Making Capital Investment Decisions -- 6.1. Incremental Cash Flows: The Key to Capital Budgeting -- Cash Flows -- Not Accounting Income -- Sunk Costs -- Opportunity Costs -- Side Effects -- Allocated Costs -- 6.2. Baldwin Company: An Example -- Analysis of the Project -- Which Set of Books? -- Note about Networking Capital -- Note about Depreciation -- Interest Expense -- 6.3. Inflation and Capital Budgeting -- Interest Rates and Inflation -- Cash Flow and Inflation -- Discounting; Nominal or Real? -- 6.4. Alternative Definitions of Operating Cash Flow -- Top-Down Approach -- Bottom-Up Approach -- Tax Shield Approach -- Conclusion -- 6.5. Some Special Cases of Discounted Cash Flow Analysis -- Evaluating Cost-Cutting Proposals -- Setting the Bid Price -- Investments of Unequal Lives: The Equivalent Annual Cost Method -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Cases: Bethesda Mining Company -- Goodweek Tires, Inc. -- ch. 7 Risk Analysis, Real Options, and Capital Budgeting -- 7.1. Sensitivity Analysis, Scenario Analysis, and Break-Even Analysis -- Sensitivity Analysis and Scenario Analysis -- Break-Even Analysis -- 7.2. Monte Carlo Simulation -- Step 1 Specify the Basic Model -- Step 2 Specify a Distribution for Each Variable in the Model -- Step 3 Computer Draws One Outcome -- Step 4 Repeat the Procedure -- Step 5 Calculate NPV -- 7.3. Real Options -- Option to Expand -- Option to Abandon -- Timing Options -- 7.4. Decision Trees -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: Bunyan Lumber; LLC -- ch. 8 Interest Rates and Bond Valuation -- 8.1. Bonds and Bond Valuation -- Bond Features and Prices -- Bond Values and Yields -- Interest Rate Risk -- Finding the Yield to Maturity: More Trial and Error- -- Zero Coupon Bonds -- 8.2. Government and Corporate Bonds -- Government Bonds -- Corporate Bonds -- Bond Ratings -- 8.3. Bond Markets -- How Bonds Are Bought and Sold -- Bond Price Reporting -- Note on Bond Price Quotes -- 8.4. Inflation and Interest Rates -- Real versus Nominal Rates -- Inflation Risk and Inflation-Linked Bonds -- Fisher Effect -- 8.5. Determinants of Bond Yields -- Term Structure of Interest Rates -- Bond Yields and the Yield Curve: Putting It All Together -- Conclusion -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: Financing East Coast Yachts's Expansion Plans with a Bond Issue -- ch. 9 Stock Valuation -- 9.1. Present Value of Common Stocks -- Dividends versus Capital Gains -- Valuation of Different Types of Stocks -- 9.2. Estimates of Parameters in the Dividend Discount Model -- Where Does g Come From? -- Where Does R Come From? -- Healthy Sense of Skepticism -- Dividends or Earnings: Which to Discount? -- No-Dividend Firm -- 9.3. Growth Opportunities -- NPVGOs of Real-World Companies -- Growth in Earnings and Dividends versus Growth Opportunities -- 9.4. Comparables -- Price-to-Earnings Ratio -- Enterprise Value Ratios -- 9.5. Valuing the Entire Firm -- 9.6. Stock Markets -- Dealers and Brokers -- Organization of the NYSE -- NASDAQ Operations -- Stock Market Reporting -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: Stock Valuation at Ragan Engines -- pt. III Risk -- ch. 10 Risk and Return: Lessons from Market History -- 10.1. Returns -- Dollar Returns -- Percentage Returns -- 10.2. Holding Period Returns -- 10.3. Return Statistics -- 10.4. Average Stock Returns and Risk-Free Returns -- 10.5. Risk Statistics -- Variance -- Normal Distribution and Its Implications for Standard Deviation -- 10.6. More on Average Returns -- Arithmetic versus Geometric Averages -- Calculating Geometric Average Returns -- Arithmetic Average Return or Geometric Average Return? -- 10.7. U.S. Equity Risk Premium: Historical and International Perspectives -- 10.8. 2008: A Year of Financial Crisis -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: A Job at East Coast Yachts -- ch. 11 Return and Risk: The Capital Asset Pricing Model (CAPM) -- 11.1. Individual Securities -- 11.2. Expected Return, Variance, and Covariance -- Expected Return and Variance -- Covariance and Correlation -- 11.3. Return and Risk for Portfolios -- Expected Return on a Portfolio -- Variance and Standard Deviation of a Portfolio -- 11.4. Efficient Set for Two Assets -- 11.5. Efficient Set for Many Securities -- Variance and Standard Deviation in a Portfolio of Many Assets -- 11.6. Diversification -- Anticipated and Unanticipated Components of News -- Risk: Systematic and Unsystematic -- Essence of Diversification -- 11.7. Riskless Borrowing and Lending -- Optimal Portfolio -- 11.8. Market Equilibrium -- Definition of the Market Equilibrium Portfolio -- Definition of Risk When Investors Hold the Market Portfolio -- Formula for Beta -- Test -- 11.9. Relationship between Risk and Expected Return (CAPM) -- Expected Return on Market -- Expected Return on Individual Security -- Summary and Conclusions -- Concept Questions -- Questions and Problems -- Excel Master It! -- Mini Case: A Job at East Coast Yachts, Part 2 -- Appendix 11A Is Beta Dead?
Series:
The McGraw-Hill/Irwin series in finance, insurance and real estate
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