Applied Corporate Finance, 3rd Edition
ISBN: 9780470384640 | 0470384646
Edition: 3rdFormat: Paperback
Publisher: Wiley
Pub. Date: 3/1/2010
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Readable and usable in style and valuable in approach, this text provides the practical and succinct advice that students and practitioners need, rather than a sole concentration on debate theory, assumptions, or models. Like no other text of its kind, the author applies corporate finance to real companies. The new Third Edition has four real-world core companies to study and follow. Perfected suited for MBA programsrs" corporate finance and equity valuation courses, all business decisions are classified into three groups: the investment, finan... MORE
| Preface | p. iv |
| Acknowledgments | p. ix |
| The Foundations | p. 1 |
| The Firm: Structural Set-up | p. 1 |
| First Principles | p. 2 |
| Corporate Financial Decisions, Firm Value, and Equity Value | p. 5 |
| A Real-World Focus | p. 6 |
| A Resource Guide | p. 7 |
| Some Fundamental Propositions About Corporate Finance | p. 7 |
| Conclusion | p. 8 | ... MORE
| The Objective in Decision Making | p. 9 |
| Choosing the Right Objective | p. 10 |
| The Classical Objective | p. 11 |
| Maximize Stock Prices: The Best-Case Scenario | p. 14 |
| Maximize Stock Prices: Real-World Conflicts of Interest | p. 14 |
| Alternatives to Stock Price Maximization | p. 37 |
| Maximize Stock Prices: Salvaging a Flawed Objective | p. 40 |
| A Postscript: The Limits of Corporate Finance | p. 53 |
| Conclusion | p. 54 |
| Live Case Study: Corporate Governance Analysis | p. 55 |
| Problems and Questions | p. 57 |
| The Basics of Risk | p. 58 |
| Motivation and Perspective in Analyzing Risk | p. 59 |
| Equity Risk and Expected Returns | p. 60 |
| The Risk in Borrowing: Default Risk and the Cost of Debt | p. 87 |
| Conclusion | p. 94 |
| Live Case Study: Stockholder Analysis | p. 95 |
| Problems and Questions | p. 96 |
| Risk Measurement and Hurdle Rates in Practice | p. 100 |
| Cost of Equity | p. 101 |
| From Cost of Equity to Cost of Capital | p. 155 |
| Conclusion | p. 174 |
| Live Case Study: Risk and Return: Analysis for the Firm | p. 175 |
| Problems and Questions | p. 177 |
| Measuring Return on Investments | p. 182 |
| What Is a Project? | p. 183 |
| Hurdle Rates for Firms Versus Hurdle Rates for Projects | p. 185 |
| Measuring Returns: The Choices | p. 191 |
| Investment Decision Rules | p. 214 |
| Probabilistic Approaches to Investment Analysis | p. 239 |
| Conclusion | p. 254 |
| Live Case Study: Estimating Earnings and Cash Flows | p. 256 |
| Problems and Questions | p. 257 |
| Project Interactions, Side Costs, and Side Benefits | p. 260 |
| Mutually Exclusive Projects | p. 261 |
| Side Costs from Projects | p. 282 |
| Side Benefits from Projects | p. 287 |
| Options Embedded in Projects | p. 293 |
| Measuring the Quality of Existing Investments | p. 307 |
| Conclusion | p. 321 |
| Live Case Study: Estimating Earnings and Cash Flows | p. 323 |
| Problems and Questions | p. 324 |
| Capital Structure: Overview of the Financing Decision | p. 328 |
| The Choices: Types of Financing | p. 329 |
| Financing Behavior | p. 340 |
| The Process of Raising Capital | p. 347 |
| The Tradeoff of Debt | p. 359 |
| No Optimal Capital Structure | p. 372 |
| There is an Optimal Capital Structure | p. 378 |
| How Firms Choose Their Capital Structures | p. 380 |
| Conclusion | p. 385 |
| Live Case Study: Analyzing a Firm's Current Financing Choices | p. 387 |
| Problems and Questions | p. 389 |
| Capital Structure: The Optimal Financial Mix | p. 393 |
| Operating Income Approach | p. 394 |
| Cost of Capital Approach | p. 398 |
| Adjusted Present Value Approach | p. 434 |
| Comparative Analysis | p. 441 |
| Selecting the Optimal Debt Ratio | p. 444 |
| Conclusion | p. 445 |
| Live Case Study: The Optimal Financing Mix | p. 447 |
| Problems and Questions | p. 448 |
| Capital Structure: The Financing Details | p. 455 |
| A Framework for Capital Structure Changes | p. 456 |
| Immediate, Gradual or no Change | p. 456 |
| Choosing the Right Financing Instruments | p. 475 |
| Conclusion | p. 498 |
| Live Case Study: Mechanics of Moving to the Optimal | p. 500 |
| Problems and Questions | p. 502 |
| Dividend Policy | p. 505 |
| Background on Dividend Policy | p. 506 |
| When are Dividends Irrelevant? | p. 519 |
| The "Dividends are Bad" School | p. 522 |
| The "Dividends are Good" School | p. 529 |
| Managerial Interests and Dividend Policy | p. 540 |
| Conclusion | p. 543 |
| Live Case Study: The Tradeoff on Dividend Policy | p. 544 |
| Problems and Questions | p. 545 |
| Analyzing Cash Returned to Stockholders | p. 546 |
| Cash Returned to Stockholders | p. 547 |
| A Cash Flow Approach to Analyzing Dividend Policy | p. 555 |
| A Comparable Firm Approach to Analyzing Dividend Policy | p. 581 |
| Managing Changes in Dividend Policy | p. 585 |
| Conclusion | p. 588 |
| Live Case Study: A Framework for Analyzing Dividends | p. 589 |
| Problems and Questions | p. 591 |
| Valuation: Principles and Practice | p. 595 |
| Discounted Cash Flow Valuation | p. 597 |
| Relative Valuation | p. 649 |
| Reconciling Different Valuations | p. 667 |
| Conclusion | p. 668 |
| Live Case Study: Valuation | p. 669 |
| Problems and Questions | p. 671 |
| Basic Statistics | p. 675 |
| Financial Statements | p. 682 |
| Time Value of Money | p. 694 |
| Option Pricing | p. 707 |
| Glossary | p. 718 |
| Index | p. 721 |
| Table of Contents provided by Ingram. All Rights Reserved. |
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