Corporate Finance, International Student Version (Paperback)  | Released: 2015

This book by Robert Parrino, David Kidwell and Thomas Bates develops the fundamental concepts underlying corporate finance in an intuitive manner while maintaining a strong emphasis on developing computational skills. The authors believe that students who understand the intuition underlying the basic concepts of finance are better able to develop the critical judgments necessary to apply financial tools in real decision-making situations. The Third Edition offers a level of rigor that is appropriate for both business and finance majors and presents the content in a manner that all students find accessible and engaging. ·The Financial Manager and the Firm ·The Financial Environment and the Level of Interest Rates ·Financial Statements, Cash Flows and Taxes ·Analysing Financial Statements ·The Time Value of Money ·Discounted Cash Flows and Valuation ·Risk and Return ·Bond Valuation and the Structure of Interest Rates ·Share Valuation ·The Fundamentals of Capital Budgeting ·Cash Flows and Capital Budgeting ·Evaluating Project Economics and Capital Rationing ·The Cost of Capital ·Working Capital Management ·How Firms Raise Capital ·Capital Structure Policy ·Dividends, Share Repurchases and Payout Policy ·Business Formation, Growth and Valuation ·Financial Planning and Forecasting ·Corporate Risk Management ·International Financial Management Table of Contents: 1 The Financial Manager and the Firm 1.1 The Role of the Financial Manager 1.2 Forms of Business Organisation 1.3 Managing the Financial Function 1.4 The Goal of the Firm 1.5 Agency Conflicts: Separation of Ownership and Control 1.6 The Importance of Ethics in Business 2 The Financial Environment and the Level of Interest Rates 2.1 The Financial System 2.2 Direct Financing 2.3 Types of Financial Markets 2.4 Market Efficiency 2.5 The Stock Market 2.6 Financial Institutions and Indirect Financing 2.7 The Determinants of Interest Rate Levels 3 Financial Statements, Cash Flows and Taxes 3.1 Financial Statements and Accounting Principles 3.2 The Statement of Financial Position (Balance Sheet) 3.3 Market Value versus Book Value 3.4 The Income Statement and the Statement of Retained Earnings 3.5 Cash Flows 3.6 Tying the Financial Statements Together 3.7 International Accounting Issues 3.8 Corporate Income Tax 4 Analysing Financial Statements 4.1 Background for Financial Statement Analysis 4.2 Common-Size Financial Statements 4.3 Financial Statement Analysis 4.4 The DuPont System: A Diagnostic Tool 4.5 Selecting a Benchmark 4.6 Using Financial Ratios 5 The Time Value of Money 5.1 The Time Value of Money 5.2 Future Value and Compounding 5.3 Present Value and Discounting 5.4 Additional Concepts and Applications 6 Discounted Cash Flows and Valuation 6.1 Multiple Cash Flows 6.2 Level Cash Flows: Annuities and Perpetuities 6.3 Cash Flows That Grow at a Constant Rate 6.4 The Effective Annual Interest Rate 7 Risk and Return 7.1 Risk and Return 7.2 Quantitative Measures of Return 7.3 The Variance and Standard Deviation as Measures of Risk 7.4 Risk and Diversification 7.5 Systematic Risk 7.6 Compensation for Bearing Systematic Risk 7.7 The Capital Asset Pricing Model 8 Bond Valuation and the Structure of Interest Rates 8.1 Corporate Bonds 8.2 Bond Valuation 8.3 Bond Yields 8.4 Interest Rate Risk 8.5 The Structure of Interest Rates 9 Share Valuation 9.1 The Market for Shares 9.2 Valuing Ordinary Shares 9.3 Share Valuation: Some Simplifying Assumptions 9.4 Valuing Preference Shares 10 The Fundamentals of Capital Budgeting 10.1 An Introduction to Capital Budgeting 10.2 Net Present Value 10.3 The Payback Period 10.4 The Accounting Rate of Return 10.5 Internal Rate of Return 10.6 Capital Budgeting in Practice 11 Cash Flows and Capital Budgeting 11.1 Calculating Project Cash Flows 11.2 Estimating Cash Flows in Practice 11.3 Forecasting Free Cash Flows 11.4 Special Cases 12 Evaluating Project Economics and Capital Rationing 12.1 Variable Costs, Fixed Costs and Project Risk 12.2 Calculating Operating Leverage 12.3 Break-Even Analysis 12.4 Risk Analysis 12.5 Investment Decisions with Capital Rationing 13 The Cost of Capital 13.1 The Firm's Overall Cost of Capital 13.2 The Cost of Debt 13.3 The Cost of Equity 13.4 Using the WACC in Practice 14 Working Capital Management 14.1 Working Capital Basics 14.2 The Operating and Cash Conversion Cycles 14.3 Working Capital Investment Strategies 14.4 Accounts Receivable 14.5 Inventory Management 14.6 Cash Management and Budgeting 14.7 Financing Working Capital 15 How Firms Raise Capital 15.1 Bootstrapping 15.2 Venture Capital 15.3 Initial Public Offering 15.4 IPO Pricing and Cost 15.5 Seasoned Offerings by a Public Company 15.6 Private Markets and Bank Loans 16 Capital Structure Policy 16.1 Capital Structure and Firm Value 16.2 The Benefits and Costs of Using Debt 16.3 Two Theories of Capital Structure 16.4 Practical Considerations in Choosing a Capital Structure 17 Dividends, Share Repurchases and Payout Policy 17.1 Dividends 17.2 Share Repurchases 17.3 Dividends and Firm Value 17.4 Share Dividends and Share Splits 17.5 Setting a Dividend Policy 18 Business Formation, Growth and Valuation 18.1 Starting a Business 18.2 The Role of the Business Plan 18.3 Valuing a Business 18.4 Important Issues in Valuation 19 Financial Planning and Forecasting 19.1 Financial Planning 19.2 Financial Planning Models 19.3 A Better Financial Planning Model 19.4 Beyond the Basic Planning Models 19.5 Managing and Financing Growth 20 Corporate Risk Management 20.1 Why Companies Manage Corporate Risks 20.2 Managing Operational, Business and Financial Risks 20.3 Forwards and Futures 20.4 Swaps 20.5 Financial Options 20.6 Option Valuation 20.7 Real Options 20.8 Agency Costs 21 International Financial Management 21.1 Introduction to International Finance Management 21.2 Foreign Exchange Markets 21.3 Country Risk 21.4 Cost of Capital for International Projects 21.5 International Capital Budgeting 21.6 Islamic Finance Company Index Appendix A: Present Value and Future Value Tables Appendix B: Solutions to Selected Questions and Problems