Fundamentals of Financial Management, 3rd Edition by Pearson

Fundamentals of Financial Management, 3rd Edition by Pearson

by Vyuptakesh Sharan
Released May 2024
Publisher(s): Pearson India
ISBN: 9788131776032

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Book description

About The Author –
Vyuptakesh Sharan, Former Professor and Dean, Faculty of Commerce, Magadh University, is
currently a Professor Emeritus at Chandragupt Institute of Management Patna (CIMP) which is an
autonomous institution of Government of Bihar. Previously he was Emeritus Fellow at School of
International Studies, Jawaharlal Nehru University, New Delhi, UGC Visiting Professor at the MIB
Programme, Department of Commerce, Delhi School of Economics, University of Delhi and AICTE
Visiting Professor at Global Business Operations Post-Graduate Programme, Sri Ram College of
Commerce, University of Delhi.

Professor Sharan teaches international business and international À nance. He has delivered
special lectures in a number of Indian universities and abroad. He has to his credit six reference
books and three text books mostly published by international publishers. He has also contributed
a large number of articles to national and international journals, and has chaired more than half a
dozen national seminars.

Book Contents –

Part I: Fundamental Concepts of Financial Management –

1. Nature and Goal of Financial Decisions,
2. Time Value of Money,
3. Concept of Risk and Return,
4. Valuation of the Firm,

Part II: Long-term Investment Decision –

5. Principles of Capital Budgeting,
6. Capital Budgeting in Practice,
7. Cost of Capital,

Part III: Working Capital Management –

8. Working Capital Policy,
9. Management of Cash and Near-Cash Assets,
10. Management of Accounts Receivable,
11. Inventory Management,
12. Sources of Short-term Finance,

Part IV: Long-term Financing and Dividend Decisions –

13. Capitalisation,
14. Capital Structure,
15. Corporate Securities,
16. Term Loans and Leases,
17. Dividend Theories and Policy,
Part V: Financial Analysis Planning and Forecasting –
18. Financial Statements
19. Financial Ratio Analysis
20. Break-even Analysis
21. Leverage
22. Financial Forecasting

Part VI: Special Topics in Financial Management –

23. Corporate Combinations,
24. Corporate Financial Distress,
25. International Financial Management,
Answers
Glossary
Mathematical Tables
Author Index
Subject Index

Table of contents

  1. Cover
  2. Preface to the Third Edition
  3. Preface
  4. Contents (1/2)
  5. Contents (2/2)
  6. About the Author
  7. Part I: Fundamental Concepts of Financial Management
    1. Chapter 1: Nature and Goal of Financial Decisions
      1. 1.1 Nature of Financial Decisions
        1. 1.1.1 Long-term Investment Decision
        2. 1.1.2 Working Capital Decision
        3. 1.1.3 Financing Decision
        4. 1.1.4 Dividend Decision
      2. 1.2 Factors Influencing Financial Decisions
        1. 1.2.1 Microeconomic Factors
        2. 1.2.2 Macroeconomic Factors
      3. 1.3 Objective of Corporate Financial Decisions
        1. 1.3.1 Profit Maximisation
        2. 1.3.2 Objective of Wealth Maximisation
        3. 1.3.3 Appraisal of the Objective of Maximisation of Corporate Wealth
        4. 1.3.4 The Agency Problem
      4. Summary
      5. Points to Remember
      6. Descriptive Questions
      7. Objective–type Questions
      8. Study Topic: Managing Agency Problem
      9. References
      10. Select Further Readings
    2. Chapter 2: Time Value of Money
      1. 2.1 The Concept
      2. 2.2 Computation of Future Value
        1. 2.2.1 Future Value of a Single Amount
        2. 2.2.2 Future Value of a Series of Payments
        3. 2.2.3 Future Value in Case of Annuities
        4. 2.2.4 Frequency of Compounding
      3. 2.3 Computation of Present Value of Cash Flows
        1. 2.3.1 Present Value of a Single Amount
        2. 2.3.2 Present Value of a Series of Future Values
        3. 2.3.3 Present Value in Case of Annuity
        4. 2.3.4 Special Cases of Annuity
        5. 2.3.5 Present Value of a Cash Flow with Growth Element
      4. Summary
      5. Points to Remember
      6. Descriptive Questions
      7. Objective–type Questions
      8. Numerical Problems
      9. Solved Numerical Problems
      10. Select Further Readings
    3. Chapter 3: Concept of Risk and Return
      1. 3.1 Basic Concepts of Returns
        1. 3.1.2 Average Return: Simple and Weighted Average
        2. 3.1.3 Arithmetic and Geometric Mean
        3. 3.1.4 The Concept of Probability
        4. 3.1.5 Expected Return from a Single Investment
        5. 3.1.6 Expected Returns from International Investment
        6. 3.1.7 Portfolio Return
      2. 3.2 Concept and Measurement of Risk
        1. 3.2.1 Sources of Risk
        2. 3.2.2 Risk in Case of a Single Investment
      3. 3.3 Portfolio Risk
      4. 3.4 The Capital-Asset-Pricing Model (CAPM)
        1. 3.4.1 Systematic Risk versus Unsystematic Risk
        2. 3.4.2 Measurement of Systematic Risk and Determinants of Beta
        3. 3.4.3 Beta and the Required Rate of Investment
        4. 3.4.4 Security Market Line
        5. 3.4.5 Appraisal of CAPM
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. References
      12. Select Further Readings
    4. Chapter 4: Valuation of the Firm
      1. 4.1 Various Concepts of Value
        1. 4.1.1 Intrinsic Value
        2. 4.1.2 Market Value
        3. 4.1.3 Book Value
        4. 4.1.4 Liquidation Value
        5. 4.1.5 Going-concern Value
        6. 4.1.6 Replacement Value
      2. 4.2 Valuation of Bonds or Debentures
        1. 4.2.1 Valuation of Bonds with Fixed Maturity
        2. 4.2.2 Perpetual Bonds
      3. 4.3 Factors Influencing Bond Valuation (1/2)
      4. 4.3 Factors Influencing Bond Valuation (2/2)
        1. 4.3.1 Discount Rate versus Coupon Rate
        2. 4.3.2 Maturity and Value of Bonds
        3. 4.3.3 Yield to Maturity
        4. 4.3.4 Duration and the Bond Price
        5. 4.3.5 Riskiness and the Value of Bond
      5. 4.4 Valuation of Preference Shares
      6. 4.5 Valuation of Ordinary Shares
        1. 4.5.1 Single-period Analysis
        2. 4.5.2 Multi-period Analysis
        3. 4.5.3 P/E Ratio Approach to Equity Valuation
      7. Summary
      8. Points to Remember
      9. Descriptive Questions
      10. Objective–type Questions
      11. Numerical Problems
      12. Solved Numerical Problems
      13. Reference
      14. Select Further Reading
      15. Appendix A
      16. Appendix B
  8. Part II: Long-term Investment Decision
    1. Chapter 5: Principles of Capital Budgeting
      1. 5.1 Nature of Capital Budgeting
        1. 5.1.1 Meaning and Significance
        2. 5.1.2 Types of Proposals
        3. 5.1.3 Steps in Capital Budgeting Process
      2. 5.2 The Concept of Cash Flows
        1. 5.2.1 Nature and Timing of Cash Flows
        2. 5.2.2 Factors Considered for Cash Flow Computation
        3. 5.2.3 Process of Computation
      3. 5.3 Project Evaluation Criteria (1/2)
      4. 5.3 Project Evaluation Criteria (2/2)
        1. 5.3.1 NPV Rule
        2. 5.3.2 Profitability Index
        3. 5.3.3 Profitability Ratio Versus NPV
        4. 5.3.4 IRR Rule
        5. 5.3.5 NPV versus IRR
        6. 5.3.6 Modified IRR (MIRR)
        7. 5.3.7 Pay-back Period
        8. 5.3.8 Accounting Rate of Return
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. Reference
      12. Select Further Readings
    2. Chapter 6: Capital Budgeting in Practice
      1. 6.1 Capital Rationing
        1. 6.1.1 Conditions of Capital Rationing
        2. 6.1.2 Capital Rationing and the Choice for a Proposal
      2. 6.2 Capital Budgeting Under Inflationary Conditions
      3. 6.3 Decision Concerning Mutually Exclusive Proposalswith Unequal Lives
        1. 6.3.1 Annualised NPV Method
        2. 6.3.2 Replacement Chain Method
      4. 6.4 The Conditions of Risk
        1. 6.4.1 Inclusion of Risk Factor in Cash Flow
        2. 6.4.2 Risk Analysis Based on Portfolio Approach
        3. 6.4.3 Sensitivity Analysis
        4. 6.4.4 Scenario Analysis
        5. 6.4.5 Monte Carlo Simulation
      5. 6.5 Managerial Options and the Cash Flow
        1. 6.5.1 The Decision-tree Approach
      6. 6.6 International Capital Budgeting
        1. 6.6.1 Parent’s Perspective and the Cash flow
        2. 6.6.2 Parent–Subsidiary Perspective
      7. Summary
      8. Points to Remember
      9. Descriptive Questions
      10. Objective–type Questions
      11. Numerical Problems
      12. Solved Numerical Problems
      13. References
      14. Select Further Readings
    3. Chapter 7: Cost of Capital
      1. 7.1 Significance of Cost of Capital
      2. 7.2 Computation of the Cost of Capital
        1. 7.2.1 Cost of Debt
        2. 7.2.2 Cost of Preference Share Capital
        3. 7.2.3 Cost of Equity Shares
        4. 7.2.4 Cost of Retained Earnings
      3. 7.3 Weighted Average Cost of Capital
        1. 7.3.1 The Measurement
        2. 7.3.2 The Influencing Factors
      4. 7.4 Marginal Cost of Capital
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. Reference
      12. Select Further Readings
  9. Part III: Working Capital Management
    1. Chapter 8: Working Capital Policy
      1. 8.1 Concept of Working Capital
        1. 8.1.1 Gross and Net Working Capital
        2. 8.1.2 Permanent and Variable Working Capital
      2. 8.2 Size of Current Assets
        1. 8.2.1 Assessment of the Size: The Concept of Operating Cycle
        2. 8.2.2 Ratio between Current Assets and Fixed Assets: Liquidity versus Profitability
        3. 8.2.3 Other Factors Influencing the Size of Current Assets
      3. 8.3 Financing of Current Assets
      4. Summary
      5. Points to Remember
      6. Descriptive Questions
      7. Objective–type Questions
      8. Numerical Problems
      9. Solved Numerical Problems
      10. Reference
      11. Select Further Readings
    2. Chapter 9: Management of Cashand Near-Cash Assets
      1. 9.1 Cash Planning
        1. 9.1.1 Motives behind Holding Cash
        2. 9.1.2 Ascertaining Cash Requirements
      2. 9.2 Managing Cash Inflows and Outflows
        1. 9.2.1 The Concept of Float
        2. 9.2.2 Instruments of Cash Collection
        3. 9.2.3 Ways to Accelerate Cash Collections
        4. 9.2.4 Controlling Disbursements
      3. 9.3 Investment of Surplus Cash in Near-Cash Assets
        1. 9.3.1 Determination of Ratio between Cash and Near-Cash Assets
        2. 9.3.2 Optimal Cash Balance under Conditions of Certainty: Baumol Model
        3. 9.3.3 Optimal Cash Balance under Uncertainty: The Miller-Orr Model
        4. 9.3.4 Selection of Near-Cash Assets
      4. 9.4 Cash Management in International Firms
        1. 9.4.1 Intra-firm Transfer of Funds in Presence of Exchange Control
        2. 9.4.2 Investment of Surplus Cash
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. References
      12. Select Further Readings
    3. Chapter 10: Management of Accounts Receivable
      1. 10.1 Benefits and Costs of Accounts Receivable
        1. 10.1.1 Benefits
        2. 10.1.2 Costs
      2. 10.2 Credit Policy
        1. 10.2.1 Optimising the Term of Credit
        2. 10.2.2 Changes in Credit Standard
        3. 10.2.3 Discount Policy
      3. 10.3 Selection of Customers
        1. 10.3.1 Collecting Necessary Information
        2. 10.3.2 Analysis of the Information
        3. 10.3.3 Fixation of the Credit Limit
      4. 10.4 Monitoring and Control of Credit
        1. 10.4.1 Monitoring at the Customer’s Level
        2. 10.4.2 Monitoring at the Aggregate Level
        3. 10.4.3 Factoring
        4. 10.4.4 Forfaiting
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective-type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. References
      12. Select Further Readings
    4. Chapter 11: Inventory Management
      1. 11.1 Benefits and Cost of Maintaining Inventory
        1. 11.1.1 Benefits
        2. 11.1.2 Costs
      2. 11.2 Goal of Inventory Management (1/2)
      3. 11.2 Goal of Inventory Management (2/2)
        1. 11.2.1 Classification of Inventories
        2. 11.2.2 Economic Order Quantity (EOQ)
        3. 11.2.3 Determination of Re-order Point
        4. 11.2.4 Safety Level of Stock
      4. 11.3 Just-in-time Inventory System
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. Reference
      12. Select Further Readings
    5. Chapter 12: Sources of Short-term Finance
      1. 12.1 Trade Credit
        1. 12.1.1 Nature of Trade Credit
        2. 12.1.2 Benefits and Costs of Trade Credit
        3. 12.1.3 Stretching of Accounts Payable
      2. 12.2 Bank Finance
        1. 12.2.1 Nature of Bank Finance
        2. 12.2.2 Effective Interest Rate
        3. 12.2.3 Bank Financing Norms in India
      3. 12.3 Other Sources of Short-term Funds
        1. 12.3.1 Commercial Papers
        2. 12.3.2 Public Deposits
        3. 12.3.3 Intercorporate Deposits
      4. Summary
      5. Points to Remember
      6. Descriptive Questions
      7. Objective–type Questions
      8. Numerical Problems
      9. Solved Numerical Problems
      10. Select Further Readings
  10. Part IV: Long-term Financing and Dividend Decisions
    1. Chapter 13: Capitalisation
      1. 13.1 Significance and Bases of Capitalisation
        1. 13.1.1 Meaning of Capitalisation
        2. 13.1.2 Bases of Capitalisation
      2. 13.2 Over–capitalisation
        1. 13.2.1 Meaning of Over-capitalisation
        2. 13.2.2 Causes of Over-capitalisation
        3. 13.2.3 Effects of Over-capitalisation
      3. 13.3 Under-capitalisation
        1. 13.3.1 Meaning and Causes of Under-capitalisation
        2. 13.3.2 Impact of Under-capitalisation
      4. 13.4 Way to Optimum Capitalisation (1/2)
      5. 13.4 Way to Optimum Capitalisation (2/2)
        1. 13.4.1 Re-organisation of Capital
        2. 13.4.2 Maintenance of Desired Earnings
        3. Summary
        4. Points to Remember
        5. Descriptive Questions
        6. Objective–type Questions
        7. Numerical Problems
        8. Solved Numerical Problems
        9. Select Further Reading
    2. Chapter 14: Capital Structure
      1. 14.1 The Basic Issue
      2. 14.2 The Irrelevance Approach
        1. 14.2.1 The Arbitrage Process
        2. 14.2.2 Leverage and the Cost of Capital
        3. 14.2.3 Value of the Firm
      3. 14.3 Relevance of Capital Structure (1/2)
      4. 14.3 Relevance of Capital Structure (2/2)
        1. 14.3.1 Financial Leverage and EPS
        2. 14.3.2 Financial Leverage and Cost of Capital
        3. 14.3.3 Value of Leveraged and Unleveraged Firm in Presence of Taxes
        4. 14.3.4 Views of Modigliani and Miller in Presence of Taxes
      5. 14.4 Determination of Optimal Capital Structure
        1. 14.4.1 The Lowest WACC
        2. 14.4.2 Corporate Income Tax and Personal Income Tax
        3. 14.4.3 Bankruptcy and Agency Costs
        4. 14.4.4 The Pecking Order Hypothesis: A Critique ofan Optimal Leverage
        5. 14.4.5 Process of Attaining Optimal Capital Structure
      6. 14.5 Features of a Sound Capital Structure
      7. Summary
      8. Points to Remember
      9. Descriptive Questions
      10. Objective–type Questions
      11. Numerical Problems
      12. Solved Numerical Problems
      13. References
      14. Select Further Readings
    3. Chapter 15: Corporate Securities
      1. 15.1 Equity Shares
        1. 15.1.1 Features of the Equity Shares
        2. 15.1.2 How do Companies Issue New Shares?
        3. 15.1.3 Pre-emptive Rights of Equity Shareholders
      2. 15.2 Preference Shares
        1. 15.2.1 Features of Preference Shares
      3. 15.3 Debentures
        1. 15.3.1 Significance of Debentures
        2. 15.3.2 Features of Debentures
        3. 15.3.3 Economic Size of the Issue of Debentures
        4. 15.3.4 Retirement of Debt
      4. 15.4 Warrants
        1. 15.4.1 Features of Warrants
        2. 15.4.2 Valuation of a Warrant
        3. 15.4.3 Usefulness of Warrants
      5. 15.5 International Securities
        1. 15.5.1 International Equities
        2. 15.5.2 International Bonds
      6. Summary
      7. Points to Remember
      8. Descriptive Questions
      9. Objective–type Questions
      10. Numerical Problems
      11. Solved Numerical Problems
      12. Select Further Readings
    4. Chapter 16: Term Loans and Leases
      1. 16.1 Term Loans
        1. 16.1.1 Basic Characteristics
        2. 16.1.2 Amortisation Schedule
        3. 16.1.3 Advantages of Term Loans
      2. 16.2 Nature and forms of Lease
        1. 16.2.1 Operating Lease
        2. 16.2.2 Financial Lease
        3. 16.2.3 Straight and Modified Lease
      3. 16.3 Lease Versus Purchase Decision
        1. 16.3.1 Net Present Value Approach
        2. 16.3.2 Net Advantage of Leasing (NAL) Approach
        3. 16.3.3 Internal Rate of Return (IRR) Method
        4. 16.3.4 The Lessor’s Viewpoint
      4. 16.4 Advantages and Disadvantages of Leasing
        1. 16.4.1 Advantages
        2. 16.4.2 Disadvantages
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. Select Further Readings
    5. Chapter 17: Dividend Theories and Policy
      1. 17.1 Theories of Dividend
        1. 17.1.1 Dividend Irrelevance—Miller-Modigliani (M-M) Approach
        2. 17.1.2 Miller-Modigliani Hypothesis in Imperfect Market
        3. 17.1.3 Residual Theory of Dividends
        4. 17.1.4 “Smoothened” Residual Theory of Dividend
        5. 17.1.5 Walter’s Model of Dividend Policy
        6. 17.1.6 Dividend Relevance—Gordon’s Dividend Capitalisation Model
        7. 17.1.7 Dividend Preference Theory—Ezra Solomon’s Approach
      2. 17.2 Factors Influencing the Dividend Policy
        1. 17.2.1 Expectations of the Shareholders
        2. 17.2.2 Financial Requirements of the Firm
        3. 17.2.3 Legal and Financial Constraints
        4. 17.2.4 General Economic Conditions
      3. 17.3 Stability of Dividend Payments
        1. 17.3.1 Meaning of Stable Dividend
        2. 17.3.2 Significance of Stable Dividend
      4. 17.4 Bonus Shares
        1. 17.4.1 Impact of the Bonus Issue
        2. 17.4.2 Merits and Demerits
        3. 17.4.3 Bonus Share Issue in India
      5. 17.5 Share Split and Reverse Split
        1. 17.5.1 Share Split
        2. 17.5.2 Reverse Split
      6. 17.6 Repurchase of Shares
        1. 17.6.1 Modes of Share Repurchase
        2. 17.6.2 Purpose of the Share Buy–back
        3. 17.6.3 Advantages and Disadvantages of Share Buy-back
        4. 17.6.4 Share Buy–back in India
      7. Summary
      8. Points to Remember
      9. Descriptive Questions
      10. Objective–type Questions
      11. Numerical Problems
      12. Solved Numerical Problems
      13. References
      14. Select Further Readings
  11. Part V: Financial Analysis Planning and Forecasting
    1. Chapter 18: Financial Statements
      1. 18.1 Income Statement
        1. 18.1.1 Managerial Format
        2. 18.1.2 Marginal-Analysis Format
      2. 18.2 Balance Sheet
        1. 18.2.1 Assets
        2. 18.2.2 Liabilities
        3. 18.2.3 Limitations of the Balance Sheet
        4. 18.2.4 Complementarity between Income Statement and Balance Sheet
        5. 18.2.5 Comparative Financial Statements
      3. 18.3 Funds-Flow Statement
        1. 18.3.1 Sources of Funds
        2. 18.3.2 Uses of Funds
        3. 18.3.3 Preparation of a Funds-flow Statement
      4. 18.4 Cash-Flow Statement
        1. 18.4.1 Sources and Uses of Cash
        2. 18.4.2 Preparation of Cash-flow Statement
      5. Summary
      6. Points to Remember
      7. Descriptive Questions
      8. Objective–type Questions
      9. Numerical Problems
      10. Solved Numerical Problems
      11. Select Further Reading
    2. Chapter 19: Financial Ratio Analysis
      1. 19.1 Significance of Ratio Analysis
      2. 19.2 Types of Financial Ratios
        1. 19.2.1 Liquidity Ratios
        2. 19.2.2 Profitability Ratios
        3. 19.2.3 Ownership Ratios
      3. 19.3 Application of Ratios
        1. 19.3.1 Financial Statements
        2. 19.3.2 Computation of the Ratios
      4. 19.4 Uses of Ratio Analysis
      5. 19.5 Limitations of Financial Ratio Analysis
      6. Summary
      7. Points to Remember
      8. Descriptive Questions
      9. Objective–type Questions
      10. Numerical Problems
      11. Solved Numerical Problems
      12. Reference
      13. Select Further Readings
    3. Chapter 20: Break-even Analysis
      1. 20.1 Significance of Break-even Analysis
      2. 20.2 Determination of Break-even Point
        1. 20.2.1 Graphical Presentation
        2. 20.2.2 Computation of BEP Sales
      3. 20.3 Break-even Point and Profit Planning
        1. 20.3.1 Increase in Sales Volume
        2. 20.3.2 Increase in Sale Price
        3. 20.3.3 Varying Costs and Level of Profits
      4. 20.4 Sales-mix and Break-even Analysis
      5. 20.5 Uses of Break-even Analysis
      6. 20.6 Limitations of Break-even Analysis
      7. Summary
      8. Points to Remember
      9. Descriptive Questions
      10. Objective–type Questions
      11. Numerical Problems
      12. Solved Numerical Problems
      13. Select Further Readings
    4. Chapter 21: Leverage
      1. 21.1 Return-on-Investment Leverage
      2. 21.2 Marginal-Analysis Leverage
        1. 21.2.1 Operating Leverage
        2. 21.2.2 Fixed-charge Leverage
        3. 21.2.3 Combined Leverage
      3. 21.3 Financial Leverage
        1. 21.3.1 Financial Leverage with Preference Shares
      4. Summary
      5. Points to Remember
      6. Descriptive Questions
      7. Objective–type Questions
      8. Numerical Problems
      9. Solved Numerical Problems
      10. Select Further Readings
    5. Chapter 22: Financial Forecasting
      1. 22.1 Forecast of Single Financial Variable
        1. 22.1.1 The Financial Variables
        2. 22.1.2 Techniques of Forecast
      2. 22.2 Complete Forecast of Financial Position
        1. 22.2.1 Cash-flow Approach
        2. 22.2.2 Balance-sheet Approach
      3. Summary
      4. Points to Remember
      5. Descriptive Questions
      6. Objective–type Questions
      7. Numerical Problems
      8. Solved Numerical Problems
      9. Select Further Readings
  12. Part VI: Special Topics in Financial Management
    1. Chapter 23: Corporate Combinations
      1. 23.1 Forms of Corporate Combinations
        1. 23.1.1 Classification by Corporate Structure
        2. 23.1.2 Classification by Financial Relationship
        3. 23.1.3 Classification Based on Technique
      2. 23.2 Motivations Behind Combination
      3. 23.3 Gains and Costs of M&AS
      4. 23.4 Determination of Consideration Value
      5. 23.5 Modes of Merger Financing
        1. 23.5.1 Cash Payment
        2. 23.5.2 Exchange of Equity Shares
        3. 23.5.3 Preference Shares and Debentures
        4. 23.5.4 Deferred Payment Plan
      6. 23.6 Mergers and Take-over Regulations in India
      7. 23.7 Accounting Procedures for Combinations
        1. 23.7.1 Acquisition
        2. 23.7.2 Holding Companies
      8. 23.8 Pure Divestitures, Spin-offs and Equity Carve-outs
        1. 23.8.1 Pure Divestitures
        2. 23.8.2 Spin-offs
        3. 23.8.3 Equity Carve-outs
      9. Summary
      10. Points to Remember
      11. Descriptive Questions
      12. Objective–type Questions
      13. Numerical Problems
      14. Solved Numerical Problems
      15. Reference
      16. Select Further Readings
    2. Chapter 24: Corporate Financial Distress
      1. 24.1 Concept of Financial Distress
        1. 24.1.1 Economic Failure
        2. 24.1.2 Financial Failure
      2. 24.2 Symptoms of Financial Distress
      3. 24.3 Management of Corporate Failure (1/2)
      4. 24.3 Management of Corporate Failure (2/2)
        1. 24.3.1 Determinants of the Mode of Handling Failure
        2. 24.3.2 Contingency Planning
        3. 24.3.3 Voluntary Settlements
        4. 24.3.4 Reorganisation
        5. 24.3.5 Liquidation
      5. 24.4 Management of Financial Distress in India
      6. Summary
      7. Points to Remember
      8. Descriptive Questions
      9. Objective–type Questions
      10. Numerical Problems
      11. Solved Numerical Problems
      12. References
      13. Select Further Readings
    3. Chapter 25: International Financial Management
      1. 25.1 Exchange Rate Regime
        1. 25.1.1 Pegged versus Floating Exchange Rate Regime
        2. 25.1.2 Independent and Managed Floating
      2. 25.2 Exchange Rate Quotation
        1. 25.2.1 Direct and Indirect Quote
        2. 25.2.2 Buying and Selling Rate
        3. 25.2.3 Forward Rates
        4. 25.2.4 Cross Rates
      3. 25.3 Determination of Exchange Rate in Spot Market
        1. 25.3.1 The Process of Determination
        2. 25.3.2 Factors Influencing Exchange Rate
      4. 25.4 Exchange Rate Determination in Forward Market
        1. 25.4.1 Interest Rate Parity Theory
        2. 25.4.2 Covered Interest Arbitrage
      5. 25.5 Foreign Exchange Market (1/4)
      6. 25.5 Foreign Exchange Market (2/4)
      7. 25.5 Foreign Exchange Market (3/4)
      8. 25.5 Foreign Exchange Market (4/4)
        1. 25.5.1 Distinctive Features
        2. 25.5.2 Major Participants
        3. 25.5.3 Currency Arbitrage in Spot Market
        4. 25.5.4 Arbitrage, Hedging and Speculation in Forward Market
        5. 25.6 Market for Derivatives
          1. 25.6.1 Market for Currency Futures
          2. 25.6.2 Market for Currency Options
        6. Summary
        7. Points to Remember
        8. Descriptive Questions
        9. Objective–type Questions
        10. Numerical Problems
        11. Solved Numerical Problems
        12. References
        13. Select Further Readings
  13. Answers (1/2)
  14. Answers (2/2)
  15. Glossary (1/2)
  16. Glossary (2/2)
  17. Mathematical Tables (1/2)
  18. Mathematical Tables (2/2)
  19. Author Index
  20. Subject Index

Product information

  • Title: Fundamentals of Financial Management, 3rd Edition by Pearson
  • Author(s): Vyuptakesh Sharan
  • Release date: May 2024
  • Publisher(s): Pearson India
  • ISBN: 9788131776032