Lecture Notes In Introduction To Corporate Finance

Lecture Notes In Introduction To Corporate Finance

by Ivan E Brick

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Overview

Lecture Notes In Introduction To Corporate Finance by Ivan E Brick

LECTURE NOTES

Product Details

ISBN-13: 9789813149892
Publisher: World Scientific Publishing Company, Incorporated
Publication date: 04/19/2017
Series: World Scientific Lecture Notes In Finance Series , #1
Pages: 264
Sales rank: 532,526
Product dimensions: 5.90(w) x 9.00(h) x 0.50(d)

Table of Contents

About the Author ix

Chapter 1 Introduction 1

What is Finance? 1

What do Investors Want? 2

What are the Concerns of Corporate Management? 8

What is the Objective of the Firm? 13

Why Maximize the Value of the Stock? 15

Efficient Markets 17

Remaining Misgivings Concerning Value Maximization 18

Chapter 2 Time Value of Money 21

The Time Value of Money 21

Finding the Present Value of Future Cash Flows 21

Using Excel to Calculate Present Value 24

Lump Sum Example 25

Using a Financial Calculator to Calculate Present, Value 27

Lump Sum Example 27

The Present Value of An Annuity 29

Internal Rate of Return-Yield to Maturity 43

Valuing Perpetuities 49

Future Value 54

More Advanced Problems 60

Solution to More Advanced Problems 62

Chapter 3 Risk and Return 69

Introduction 69

Expected Return 71

Risk 73

The Mean-Standard Deviation Framework 74

Introduction to Portfolio Finance 77

Risk and Return, Problems 89

Chapter 4 The Capital Asset Pricing Model 97

Introduction 97

What is the Objective of this Chapter? 98

Assumptions 99

The Capital Asset Pricing Model 105

Back to the Interview 106

Some Observations: Efficient Markets 109

Advanced Topics-Calculating Beta 110

CAPM Problems 115

Answers to the Problem Set 116

Chapter 5 Capital Budgeting and Company Valuation 119

What is Capital Budgeting? 119

What is Net Present Value? 120

Internal Rate of Return 122

What Could Go Wrong? 124

Will NPV and IRR Always Give the Same Answer? 124

Does NPV Always Work? - Capital Rationing 126

Does NPV Always Work? - Unequal Lives 128

How Do We Find the Cost of Funds? 132

Capital Asset Pricing Model 137

More Complicated ATWACOC 138

How Do We Define Cash Flows? 143

Incremental Cash Flows 146

Case Study-Firm Valuation 150

Solution for Case Study 150

Capital Budgeting Appendix 153

Do the Various Capital Budgeting Approaches Yield Identical NPVs? 155

Capital Budgeting Problems 161

More Advanced Capital Budgeting Problem 164

Solution to Problem Set 165

Chapter 6 The Financing Decision 169

What is the Financing Decision? 169

Operating versus Financial Leverage 173

Question: What Happens to EPS as Leverage Changes? 176

What Are the Factors that Determine the Optimal Financing Mix? 177

Cost of Capital and Leverage 186

Financing Decision Problems 192

Solution to the Financing Decision Problem Set 193

Advanced Financing Decision Problems 196

Solution to the Advanced Financing Decision Problem Set 198

Chapter 7 Leasing versus Buying or is it Leasing versus Borrowing? 203

Introduction 203

Leasing for Corporations 205

True Lease or Installment Sale 210

Why is there Leasing? 217

Subsidized Loans 218

Bond Refunding 220

Multiple Choice Questions 223

Advanced Problems 227

Solution to the Advanced Problems 228

Chapter 8 Mergers and Acquisitions 233

The Board Meeting 233

Types of Mergers 234

Issues Concerning GEM's Acquisition Policy 238

Evaluation of Mergers 239

GEM's Acquisition Policy Revisited 242

Merger Problem 244

Solution to the Problem 245

Epilogue 247

Concluding Remarks and Appreciation 247

Index 251

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