book

Fundamentals of Corporate Finance

Name: Fundamentals of Corporate Finance
Author: Robert Parrino
ISBN: 9781118218105

by Robert Parrino

October 2013

Beginner

656 pages

29h 50m

English

Wiley

Audiobook available

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Cover Page
Title Page
Copyright
Dedication
About the Authors
Preface
Organization and Coverage
Proven Pedagogical Framework
Instructor and Student Resources
Brief Contents

Contents
Chapter 1: The Financial Manager and the Firm
1.1 THE ROLE OF THE FINANCIAL MANAGER1.2 FORMS OF BUSINESS ORGANIZATION1.3 MANAGING THE FINANCIAL FUNCTION1.4 THE GOAL OF THE FIRM1.5 AGENCY CONFLICTS: SEPARATION OF OWNERSHIP AND CONTROL1.6 THE IMPORTANCE OF ETHICS IN BUSINESSSUMMARY OF Learning ObjectivesSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 2: The Financial System and the Level of Interest Rates
2.1 THE FINANCIAL SYSTEM2.2 DIRECT FINANCING2.3 TYPES OF FINANCIAL MARKETS2.4 MARKET EFFICIENCY2.5 FINANCIAL INSTITUTIONS AND INDIRECT FINANCING2.6 THE DETERMINANTS OF INTEREST RATE LEVELSSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 3: Financial Statements, Cash Flows, and Taxes
3.1 FINANCIAL STATEMENTS AND ACCOUNTING PRINCIPLES3.2 THE BALANCE SHEET3.3 MARKET VALUE VERSUS BOOK VALUE3.4 THE INCOME STATEMENT AND THE STATEMENT OF RETAINED EARNINGS3.5 THE STATEMENT OF CASH FLOWS3.6 TYING TOGETHER THE FINANCIAL STATEMENTS3.7 CASH FLOWS TO INVESTORS3.8 FEDERAL INCOME TAXSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 4: Analyzing Financial Statements
4.1 BACKGROUND FOR FINANCIAL STATEMENT ANALYSIS4.2 COMMON-SIZE FINANCIAL STATEMENTS4.3 FINANCIAL RATIOS AND FIRM PERFORMANCE4.4 THE DUPONT SYSTEM: A DIAGNOSTIC TOOL4.5 SELECTING A BENCHMARK4.6 USING FINANCIAL RATIOSSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsETHICS CASE
Chapter 5: The Time Value of Money, Discounted Cash Flows, and Valuation
5.1 THE TIME VALUE OF MONEY5.2 FUTURE VALUE AND COMPOUNDING5.3 PRESENT VALUE AND DISCOUNTING5.4 MULTIPLE CASH FLOWS5.5 LEVEL CASH FLOWS: ANNUITIES AND PERPETUITIES5.6 CASH FLOWS THAT GROW AT A CONSTANT RATE5.7 THE EFFECTIVE ANNUAL INTEREST RATESUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsETHICS CASE
Chapter 6: Risk and Return
6.1 RISK AND RETURN6.2 QUANTITATIVE MEASURES OF RETURN6.3 VARIANCE AND STANDARD DEVIATION AS MEASURES OF RISK6.4 RISK AND DIVERSIFICATION6.5 SYSTEMATIC RISK6.6 COMPENSATION FOR BEARING SYSTEMATIC RISK6.7 THE CAPITAL ASSET PRICING MODELSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 7: Bond Valuation and the Structure of Interest Rates
7.1 CORPORATE BONDS7.2 BOND VALUATION7.3 BOND YIELDS7.4 INTEREST RATE RISK7.5 THE STRUCTURE OF INTEREST RATESSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsETHICS CASE
Chapter 8: Stock Valuation
8.1 THE MARKET FOR STOCKS8.2 COMMON STOCK VALUATION8.3 STOCK VALUATION: SOME SIMPLIFYING ASSUMPTIONS8.4 VALUING PREFERRED STOCKSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsETHICS CASE
Chapter 9: The Fundamentals of Capital Budgeting
9.1 AN INTRODUCTION TO CAPITAL BUDGETING9.2 NET PRESENT VALUE9.3 THE PAYBACK PERIOD9.4 THE ACCOUNTING RATE OF RETURN9.5 INTERNAL RATE OF RETURN9.6 INVESTMENT DECISIONS WITH CAPITAL RATIONING9.7 CAPITAL BUDGETING IN PRACTICESUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 10: Cash Flows and Capital Budgeting
10.1 CALCULATING PROJECT CASH FLOWS10.2 ESTIMATING CASH FLOWS IN PRACTICE10.3 FORECASTING FREE CASH FLOWS10.4 EVALUATING PROJECTS WITH DIFFERENT LIVESSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsETHICS CASE
Chapter 11: The Cost of Capital
11.1 THE FIRM'S OVERALL COST OF CAPITAL11.2 THE COST OF DEBT11.3 THE COST OF EQUITY11.4 USING THE WACC IN PRACTICESUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 12: Working Capital Management
12.1 WORKING CAPITAL BASICS12.2 THE OPERATING AND CASH CONVERSION CYCLES12.3 WORKING CAPITAL MANAGEMENT STRATEGIES12.4 ACCOUNTS RECEIVABLE12.5 INVENTORY MANAGEMENT12.6 CASH MANAGEMENT AND BUDGETING12.7 FINANCING WORKING CAPITALSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 13: How Firms Raise Capital
13.1 BOOTSTRAPPING13.2 VENTURE CAPITAL13.3 INITIAL PUBLIC OFFERING13.4 IPO PRICING AND COST13.5 GENERAL CASH OFFER BY A PUBLIC COMPANY13.6 PRIVATE MARKETS AND BANK LOANSSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsETHICS CASE
Chapter 14: Capital Structure Policy
14.1 CAPITAL STRUCTURE AND FIRM VALUE14.2 THE BENEFITS AND COSTS OF USING DEBT14.3 TWO THEORIES OF CAPITAL STRUCTURE14.4 PRACTICAL CONSIDERATIONS IN CHOOSING A CAPITAL STRUCTURESUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test ProblemsAppendix: LeasingSUMMARY OF Learning ObjectiveCritical Thinking QuestionQuestions and Problems
Chapter 15: Dividends, Stock Repurchases, and Payout Policy
15.1 DIVIDENDS15.2 STOCK REPURCHASES15.3 DIVIDENDS AND FIRM VALUE15.4 STOCK DIVIDENDS AND STOCK SPLITS15.5 SETTING A DIVIDEND PAYOUTSUMMARY OF Learning ObjectivesSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 16: Financial Planning and Managing Growth
16.1 FINANCIAL PLANNING16.2 FINANCIAL PLANNING MODELS16.3 A BETTER FINANCIAL PLANNING MODEL16.4 BEYOND THE BASIC PLANNING MODELS16.5 MANAGING AND FINANCING GROWTHSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Chapter 17: International Financial Management
17.1 INTRODUCTION TO INTERNATIONAL FINANCIAL MANAGEMENT17.2 FOREIGN EXCHANGE MARKETS17.3 INTERNATIONAL CAPITAL BUDGETING17.4 GLOBAL MONEY AND CAPITAL MARKETS17.5 INTERNATIONAL BANKINGSUMMARY OF Learning ObjectivesSUMMARY OF Key EquationsSelf-Study ProblemsSolutions to Self-Study ProblemsCritical Thinking QuestionsQuestions and ProblemsSample Test Problems
Appendix A: Future Value and Present Value Tables
Appendix B: Solutions to Selected Questions and Problems
Glossary
Subject Index
Company Index

Content preview from Fundamentals of Corporate Finance

14 Capital Structure Policy

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Learning Objectives

Describe the two Modigliani and Miller propositions, the key assumptions underlying them, and their relevance to capital structure decisions. Use Proposition 2 to calculate the return on equity.

Discuss the benefits and costs of using debt financing and calculate the value of the income tax benefit associated with debt.

Describe the trade-off and pecking order theories of capital structure choice and explain what the empirical evidence tells us about these theories.

Discuss some of the practical considerations that managers are concerned with when they choose a firm's capital structure.

At the end of 2012 the average firm in the U.S. computer industry had debt obligations that represented less than 10 percent of the market value of its total capital. Some of the best-known computer industry firms, such as Apple, CISCO, Dell, Google, Intel, Microsoft, Oracle, and Qualcomm, actually had more cash than debt. In other words, these companies ...

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Fundamentals of Corporate Finance

by Robert Parrino

14

Capital Structure Policy

Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
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