000			10221nam a2200109Ia 4500
999			_c1591 _d1591
020			_a978-8131708903
100			_aARNOLD GLEN
245		0	_aCORPORATE FINANCIAL MANAGEMENT
260			_bPEARSON
650			_a The financial world Learning outcomes The objective of the firm Case study 1.1 Cadbury Schweppes 1.2 Infosys Technologies Limited Ownership and control What happens if control over directors is weak? Primitive and modern economies The role of the financial manager The flow of funds and financial intermediation Growth in the financial services sector The financial system Indian financial system Concluding comments Key points and concepts Appendix 1.1 Financial statements and analysis Balance sheet Income or profit and loss account statement Cash flow statement Financial analysis References and further reading Websites The investment decision Project appraisal: net present value and internal rate of return Value creation and corporate investment Net present value and internal rate of return Modified internal rate of return Concluding comments Key points and concepts Appendix 2.1 Mathematical tools for finance Case study 2.1 Jacques Chirac's attempt to help Eurotunnel Mathematical tools exercises Project appraisal: cash flow and applications Case study 3.1 Airbus's Superjumbo Quality of information Are profit calculations useful for estimating project viability? The replacement decision Replacement cycles When to introduce a new machine Drawbacks of the annual equivalent annuity method Timing of projects The make or buy decision Fluctuating output The decision-making process for investment appraisal Learning outcomes Introduction Case study 4.1 Bentley output to rise on £600m investment Evidence on the employment of appraisal techniques Payback Accounting rate of return Internal rate of return: reasons for continued popularity The 'science' and the 'art' of investment appraisal The investment process Questions and problems Assignment Project appraisal: capital rationing, taxation and inflation Learning outcomes Introduction Capital rationing Taxation and investment appraisal Inflation Case study 5.1 Eurotunnel's inflation allowance Concluding comments Key points and concepts References and further reading Self-review questions Questions and problems Assignments Chapter notes Risk and return Risk and project appraisal Learning outcomes Case study 6.1 Two risky ventures . Introduction What is risk? Adjusting for risk through the discount rate Sensitivity analysis Scenario analysis Probability analysis The risk of insolvency Problems of using probability analysis Evidence of risk analysis in practice Real options Case study 6.2 RJB Mining: risky coalfields Concluding comments Key points and concepts References and further reading Self-review . Portfolio theory Learning outcomes Introduction Holding period returns Expected return and standard deviation for shares Combinations of investments Portfolio expected return and standard deviation. Dominance and the efficient frontier Indifference curves Choosing the optimal portfolio The boundaries of diversification Extension to a large number of securities Evidence on the benefits of diversification The capital market line A practical application of portfolio theory Problems with portfolio theory The capital asset pricing model and multi-factor models Learning outcomes Introduction A short history of shares, bonds and bills The capital asset pricing model Factor models The arbitrage pricing theory The three-factor model An alternative approach to the risk-return relationship Project appraisal and systematic risk Sceptics' views — alternative perspectives on risk Sources of finance Stock markets Learning outcomes Case study 9.1 Using the stock market both to create wealth and to treat disease Introduction Stock exchanges around the world European stock exchanges Globalisation of financial flows Why do companies list their shares on more than one exchange? The importance of a well-run stock exchange The London stock exchange The UK equity markets available to companies Tasks for stock exchanges Trading systems The ownership of UK quoted shares Regulation Understanding the figures in the financial pages Taxation and corporate finance Indian finanical markets Raising equity capital Learning outcomes Case study 10.1 To float or not to float?... Introduction What is equity capital? Preference shares Some unusual types of shares Floating on the Official List Methods of issue Timetable for a new offer How does an AIM flotation differ from one on the Official List? The costs of new issues Rights issues Case study 10.2 Cookson: a very troubled rights issue Other equity issues Scrip issues Warrants Equity finance for unquoted firms Case study 10.3 Expertise that animates an idea Disillusionment and dissatisfaction with quotation Long-term debt finance Learning outcomes Introduction Some fundamental features of debt finance Short-term asset management Investment of temporary surplus funds Concluding comments Key points and concepts References and further reading Websites Self-review questions Questions and problems Assignments Chapter notes Stock market efficiency Learning outcomes Introduction What is meant by efficiency? Random walks The three levels of efficiency Weak-form tests Semi-strong form tests Strong-form tests Behavioural finance Misconceptions about the efficient market hypothesis Implications of the EMH for investors Implications of the EMH for companies Concluding comments Key points and concepts References and further reading Self-review questions Questions and problems Assignment Chapter notes Corporate value 5 Value-based management Learning outcomes Introduction Value creation and value destruction Earnings-based management How a business creates value Measuring value creation: external metrics Concluding comments Key points and concepts References and further reading Self-review questions Questions and problems Assignments Chapter notes. Bonds Bank borrowing Syndicated loans Credit rating Mezzanine debt and high-yield (junk) bonds Case study 11.1 The junk bond wizard: Michael Milken Convertible bonds Valuing bonds International sources of debt finance Project finance Sale and leaseback Securitisation The term structure of interest rates Concluding comments Key points and concepts References and further reading Websites Self-review questions Questions and problems Assignments Chapter notes Short-term and medium-term finance Learning outcomes Introduction Bank sources Trade credit Trade debtor management Factoring Hire purchase Leasing Bills of exchange Acceptance credits (bank bills or banker's acceptance) Concluding comments Key points and concepts References and further reading Websites Self-review questions Questions and problems Assignments Chapter notes Treasury and working capital management Learning outcomes Introduction The main areas of treasury and working capital management Case study 13.1 Cadbury Schweppes' treasury risk management Financing Risk management Working capital management. Managing a value-based company and the cost of capital Learning outcomes Introduction An overview of the application of value principles Case study 16.1 Strategy, planning and budgeting at Lloyds TSB Measuring value creation: internal metrics Case study 16.2 The use of economic profit is becoming more widespread The cost of capital Empirical evidence of corporate branches Implementation issues Fundamental beta Some thoughts on the cost of capital Concluding comments Key points and concepts References and further reading Self-review questions Questions and problems Assignments Chapter notes Valuing shares Learning .outcomes Introduction Case study 17.1 Amazon.com and Orange Valuation using net asset value (NAV) Valuation using income-flow methods The dividend valuation models The price-earnings ratio (PER) model Valuation using cash flow Valuation using owner earnings Valuing unquoted shares Unusual companies Managerial control and valuation Allowing for real option values Concluding comments Key points and concepts References and further reading Self-review questions Questions and problems Assignments Chapter notes Capital structure Learning outcomes Introduction Case study 18.1 The balance between debt and ordinary share capital What do we mean be 'gearing'? The effect of gearing The value of the firm and the cost of capital Does the cost of capital (WACC) decrease with higher debt levels? Niodigliani and Miller's argument in a world with no taxes The capital structure decision in a world with tax Additional considerations Some further thoughts on debt finance Concluding comments Key points and concepts Appendix 18.1 Asset beta Appendix 18.2 Adjusted present value (APV) References and further reading Self-review questions Questions and problems Assignments Chapter notes Dividend policy Learning outcomes Introduction Defining the problem Miller and Modigliani's dividend irrelevancy proposition Dividends as a residual Clientele effects Taxation Dividends as conveyors of information Resolution of uncertainty Owner control (agency theory) Scrip dividends Share buy-backs and special dividends A round-up of the arguments Concluding comments Key points and concepts References and further reading Self-review questions Questions and problems Assignments Chapter notes Mergers Learning outcomes Introduction The merger decision Definitions and semantics Merger statistics Merger motives Case study 20.1 Economies of scale in oil Financing mergers The merger process The impact of mergers. Managing mergers Concluding comments Key points and concepts References and further reading Websites Self-review questions Questions and problems Assignment Chapter notes Managing risk Derivatives Learning outcomes Introduction A long history Options Forwards Futures Forward rate agreements (FRAs) A comparison of options, futures, forwards and FRAs Caps Swaps Derivatives users Concluding comments Key points and concepts Appendix 21.1 Option pricing Appendix 21.2 The relationship between FRAs and swaps References and further reading Websites Self-review questions Questions and
942			_cBK