FUNDAMENTALS OF CORPORATE FINANCEPDF电子书下载

Part One Introduction 1

1 The Firm and the Financial Manager 1

2 The Financial Environment 26

3 Accounting and Finance 44

Part Two Value 66

4 The Time Value of Money 66

5 Valuing Bonds 114

6 Valuing Stocks 140

7 Net Present Value and Other Investment Criteria 178

8 Using Discounted Cash-Flow Analysis to Make Investment Decisions 210

9 Project Analysis 238

Part Three Risk 266

10 Introduction to Risk，Return，and the Opportunity Cost of Capital 266

11 Risk，Return，and Capital Budgeting 292

12 The Cost of Capital 318

Part Four Financing 344

13 An Overview of Corporate Financing 344

14 How Corporations Issue Securities 366

Part Five Debt and Dividend Policy 392

15 Debt Policy 392

16 Dividend Policy 424

Part Six Financial Planning 448

17 Financial Statement Analysis 448

18 Financial Planning 480

19 Working Capital Management and Short Term Planning 506

Part Seven Short-Term Financial Decisions 538

20 Cash and Inventory Management 538

21 Credit Management and Bankruptcy 562

Part Eight Special Topics 585

22 Mergers，Acquisitions，and Corporate Control 585

23 International Financial Management 614

24 Options 640

25 Risk Management 664

Part Nine Conclusion 686

26 What We Do and Do Not Know about Finance 686

Appendix A：Present Value Tables 699

Appendix B：Solutions to Selected End-of-Chapter Problems 709

Glossary 722

Global Index 727

Index 729

Part One Introduction 1

Chapter 1 The Firm and the Financial Manager 2

1.1 Organizing a Business 4

Sole Proprietorships 4

Partnerships 4

Corporations 4

Hybrid Forms of Business Organization 5

1.2 The Role of the Financial Manager 6

The Capital Budgeting Decision 7

The Financing Decision 8

1.3 Who Is the Financial Manager？ 8

Careers in Finance 9

1.4 Goals of the Corporation 12

Shareholders Want Managers to Maximize Market Value 12

Ethics and Management Objectives 13

Do Managers Really Maximize Value？ 16

1.5 Topics Covered in This Book 18

Snippets of History 21

1.6 Summary 21

Quiz 22

Practice Problems 23

Solutions to Self-Test Questions 24

Chapter 2 The Financial Environment 26

2.1 The Flow of Savings to Corporations 28

The Stock Market 29

Other Financial Markets 30

Financial Intermediaries 31

Financial Institutions 33

Total Financing of U.S.Corporations 35

2.2 Functions of Financial Markets and Intermediclries 36

Transporting Cash across Time 36

Liquidity 36

The Payment Mechanism 37

Reducing Risk 37

Information Provided by Financial Markets 37

The Opportunity Cost of Capital 39

2.3 Summary 40

Quiz 41

Practice Problems 41

Solutions to Self-Test Questions 42

Chapter 3 Accounting and Finance 44

3.1 The Balance Sheet 46

Book Values and Market Values 48

3.2 The Income Statement 50

Profits versus Cash Flow 51

3.3 The Statement of Cash Flows 53

3.4 Accounting Practice and Accounting Malpractice 55

3.5 Taxes 57

Corporate Tax 57

Personal Tax 58

3.6 Summary 59

Quiz 60

Practice Problems 60

Challenge Problems 63

S＆P Problems 63

Solutions to Self-Test Questions 64

Part Two Value 66

Chapter 4 The Time Value of Money 66

4.1 Future Values and Compound Interest 68

4.2 Present Values 71

Finding the Interest Rate 76

4.3 Multiple Cash Flows 80

Future Value of Multiple Cash Flows 80

Present Value of Multiple Cash Flows 81

4.4 Level Cash Flows：Perpetuities and Annuities 82

How to Value Perpetuities 83

How to Value Annuities 84

Annuities Due 89

Future Value of an Annuity 90

4.5 Inflation and the Time Value of Money 93

Real versus Nominal Cash Flows 93

Inflation and Interest Rates 96

Valuing Real Cash Payments 98

Real or Nominal？ 99

4.6 Effective Annual Interest Rates 100

4.7 Summary 102

Quiz 103

Practice Problems 104

Challenge Problems 108

S＆P Problems 109

Solutions to Self-Test Questions 109

Minicase 112

Chapter 5 Valuing Bonds 114

5.1 Bond Characteristics 116

Reading the Financial Pages 116

5.2 Bond Prices and Yields 118

How Bond Prices Vary with Interest Rates 119

Yield to Maturity versus Current Yield 120

Rate of Return 124

Interest Rate Risk 127

The Yield Curve 128

Nominal and Real Rates of Interest 129

Default Risk 131

Variations in Corporate Bonds 133

5.3 Summary 135

Quiz 136

Practice Problems 136

Challenge Problem 138

S＆P Problems 138

Solutions to Self-Test Questions 138

Chapter 6 Valuing Stocks 140

6.1 Stocks and the Stock Market 142

Reading the Stock Market Listings 142

6.2 Book Values，Liquidation Values，and Market Values 144

6.3 Valuing Common Stocks 147

Today’s Price and Tomorrow’s Price 147

The Dividend Discount Model 149

6.4 Simplifying the Dividend Discount Model 152

The Dividend Discount Model with No Growth 152

The Constant-Growth Dividend Discount Model 152

Estimating Expected Rates of Return 154

Nonconstant Growth 155

6.5 Growth Stocks and Income Stocks 156

The Price-Earnings Ratio 158

Valuing Entire Businesses 159

6.6 There Are No Free Lunches on Wall Street 160

Method 1：Technical Analysis 161

Method 2：Fundamental Analysis 163

A Theory to Fit the Facts 165

Some Puzzles and Anomalies 165

6.7 Behavioral Finance and the Rise and Fall of the Dot.Coms 166

6.8 Summary 167

Quiz 168

Practice Problems 169

Challenge Problems 172

S＆P Problems 172

Solutions to Self-Test Questions 173

Minicase 175

Chapter 7 Net Present Value and Other Investment Criteria 178

7.1 Net Present Value 180

A Comment on Risk and Present Value 181

Valuing Long-Lived Projects 182

7.2 Other Investment Criteria 185

Payback 185

Internal Rate of Return 188

A Closer Look and the Rate of Return Rule 189

Calculating the Rate of Return for Long-Lived Projects 189

A Word of Caution 191

Some Pitfalls with the Internal Rate of Return Rule 191

7.3 Mutually Exclusive Projects 194

Investment Timing 195

Long- versus Short-Lived Equipment 196

Replacing an Old Machine 197

Mutually Exclusive Projects and the IRR Rule 198

7.4 Capital Rationing 200

Soft Rationing 200

Hard Rationing 200

Pitfalls of the Profitability Index 201

7.5 A Last Look 202

7.6 Summary 203

Quiz 204

Practice Problems 204

Challenge Problems 207

Solutions to Self-Test Questions 208

Chapter 8 Using Discounted Cash-Flow Analysis to Make Investment Decisions 210

8.1 Discount Cash Flows，Not Profits 212

8.2 Discount Incremental Cash Flows 214

Include All Indirect Effects 214

Forget Sunk Costs 215

Include Opportunity Costs 215

Recognize the Investment in Working Capital 216

Beware of Allocated Overhead Costs 216

8.3 Discount Nominal Cash Flows by the Nominal Cost of Capital 217

8.4 Separate Investment and Financing Decisions 219

8.5 Calculating Cash Flow 219

Capital Investment 219

Investment in Working Capital 219

Cash Flow from Operations 220

8.6 An Example：Blooper Industries 222

Calculating Blooper’s Project Cash Flows 223

Calculating the NPV of Blooper’s Project 224

Further Notes and Wrinkles Arising from Blooper’s Project 225

8.7 Summary 230

Quiz 230

Practice Problems 231

Challenge Problems 233

S＆P Problems 234

Solutions to Spreadsheet Model Questions 234

Solutions to Self-Test Questions 235

Minicase 237

Chapter 9 Project Analysis 238

9.1 How Firms Organize the Investment Process 240

Stage 1：The Capital Budget 240

Stage 2：Project Authorizations 240

Problems and Some Solutions 241

9.2 Some “What-If” Questions 242

Sensitivity Analysis 242

Scenario Analysis 245

9.3 Break-Even Analysis 246

Accounting Break-Even Analysis 246

Economic Value Added and Break-Even Analysis 247

Operating Leverage 251

9.4 Real Options and the Value of Flexibility 253

The Option to Expand 253

A Second Real Option：The Option to Abandon 254

A Third Real Option：The Timing Option 255

A Fourth Real Option：Flexible Production Facilities 256

9.5 Summary 256

Quiz 257

Practice Problems 257

Challenge Problems 260

S＆P Problems 260

Solutions to Self-Test Questions 260

Minicase 263

Part Three Risk 266

Chapter 10 Introduction to Risk，Return，and the Opportunity Cost of Capital 266

10.1 Rates of Return：A Review 268

10.2 A Century of Capital Market History 269

Market Indexes 269

The Historical Record 270

Using Historical Evidence to Estimate Today’s Cost of Capital 272

10.3 Measuring Risk 274

Variance and Standard Deviation 275

A Note on Calculating Variance 277

Measuring the Variation in Stock Returns 277

10.4 Risk and Diversification 279

Diversification 279

Asset versus Portfolio Risk 280

Market Risk versus Unique Risk 283

10.5 Thinking about Risk 284

Message 1：Some Risks Look Big and Dangerousbut Really Are Diversifiable 285

Message 2：Market Risks Are Macro Risks 286

Message 3：Risk Can Be Measured 287

10.6 Summary 287

Quiz 288

Practice Problems 289

S＆P Problems 290

Solutions to Self-Test Questions 291

Chapter 11 Risk，Return，and Capital Budgeting 292

11.1 Measuring Market Risk 294

Measuring Beta 294

Betas for Amazon.com and ExxonMobil 296

Portfolio Betas 298

11.2 Risk and Return 300

Why the CAPM Works 302

The Security Market Line 303

How Well Does the CAPM Work？ 304

Using the CAPM to Estimate Expected Returns 306

11.3 Capital Budgeting and Project Risk 308

Company versus Project Risk 308

Determinants of Project Risk 309

Don’t Add Fudge Factors to Discount Rates 310

11.4 Summary 311

Quiz 311

Practice Problems 312

Challenge Problem 316

S＆P Problems 317

Solutions to Self-Test Questions 317

Chapter 12 The Cost of Capital 318

12.1 Geothermal’s Cost of Capital 320

12.2 The Weighted-Average Cost of Capital 321

Calculating Company Cost of Capital as a Weighted Average 322

Market versus Book Weights 324

Taxes and the Weighted-Average Cost of Capital 325

What If There Are Three （or More） Sources of Financing？ 325

Wrapping Up Geothermal 326

Checking Our Logic 327

12.3 Measuring Capital Structure 328

12.4 Calculating Required Rates of Return 330

The Expected Return on Bonds 330

The Expected Return on Common Stock 330

The Expected Return on Preferred Stock 331

12.5 Calculating the Weighted-Average Cost of Capital 332

Real Company WACCs 332

12.6 Interpreting the Weighted-Average Cost of Capital 333

When You Can and Can’t Use WACC 333

Some Common Mistakes 333

How Changing Capital Structure Affects Expected Returns 334

What Happens When the Corporate Tax Rate Is Not Zero 335

12.7 Flotation Costs and the Cost of Capital 335

12.8 Summary 336

Quiz 337

Practice Problems 337

Challenge Problems 339

S＆P Problems 339

Solutions to Self-Test Questions 340

Minicase 341

Part Four Financing 344

Chapter 13 An Overview of Corporate Financing 344

13.1 Creating Value with Financing Decisions 346

13.2 Common Stock 347

Ownership of the Corporation 348

Voting Procedures 349

Classes of Stock 350

Corporate Governance in the United States and Elsewhere 350

13.3 Preferred Stock 351

13.4 Corporate Debt 352

Debt Comes in Many Forms 353

Innovation in the Debt Market 357

13.5 Convertible Securities 358

13.6 Patterns of Corporate Financing 359

Do Firms Rely Too Heavily on Internal Funds？ 359

External Sources of Capital 360

13.7 Summary 362

Quiz 362

Practice Problems 363

S＆P Problems 364

Solutions to Self-Test Questions 364

Chapter 14 How Corporations Issue Securities 366

14.1 Venture Capital 368

14.2 The Initial Public Offering 370

Arranging a Public Issue 370

14.3 The Underwriters 375

14.4 General Cash Offers by Public Companies 376

General Cash Offers and Shelf Registration 377

Costs of the General Cash Offer 378

Market Reaction to Stock Issues 378

14.5 The Private Placement 379

14.6 Summary 380

Quiz 381

Practice Problems 381

Challenge Problem 383

S＆P Problems 383

Solutions to Self-Test Questions 384

Minicase 385

Appendix：Hotch Pot’s New-Issue Prospectus 386

Part Five Debt and Dividend Policy 392

Chapter 15 Debt Policy 392

15.1 How Borrowing Affects Value in a Tax-Free Economy 394

MM’s Argument 395

How Borrowing Affects Earnings per Share 396

How Borrowing Affects Risk and Return 398

Debt and the Cost of Equity 400

15.2 Capital Structure and Corporate Taxes 403

Debt and Taxes at River Cruises 403

How Interest Tax Shields Contribute to the Value of Stockholders’ Equity 404

Corporate Taxes and the Weighted-Average Cost of Capital 405

The Implications of Corporate Taxes for Capital Structure 406

15.3 Costs of Financial Distress 407

Bankruptcy Costs 408

Financial Distress without Bankruptcy 409

Costs of Distress Vary with Type of Asset 411

15.4 Explaining Financing Choices 412

The Trade-off Theory 412

A Pecking Order Theory 413

The Two Faces of Financial Slack 414

15.5 Summary 416

Quiz 417

Practice Problems 418

Challenge Problems 420

S＆P Problems 421

Solutions to Self-Test Questions 421

Minicase 423

Chapter 16 Dividend Policy 424

16.1 How Dividends Are Paid 426

Cash Dividends 426

Some Legal Limitations on Dividends 427

Stock Dividends and Stock Splits 427

16.2 Share Repurchase 428

The Role of Share Repurchases 429

Repurchases and Share Valuation 430

16.3 How Do Companies Decide on Dividend Payments？ 431

16.4 Why Dividend Policy Should Not Matter 432

Dividend Policy Is Irrelevant in Competitive Markets 433

The Assumptions behind Dividend Irrelevance 435

16.5 Why Dividends May Increase Firm Value 436

Market Imperfections 436

Dividends as Signals 437

16.6 Why Dividends May Reduce Firm Value 439

Why Pay Any Dividends at All？ 439

Taxation of Dividends and Capital Gains under Current Tax Law 440

16.7 Summary 441

Quiz 442

Practice Problems 443

Challenge Problem 445

S＆P Problems 445

Solutions to Self-Test Questions 445

Part Six Financial Planning 448

Chapter 17 Financial Statement Analysis 448

17.1 Financial Ratios 450

Leverage Ratios 452

Liquidity Ratios 454

Efficiency Ratios 456

Profitability Ratios 457

17.2 The Du Pont System 459

Other Financial Ratios 461

17.3 Using Financial Ratios 461

Accounting Principles and Financial Ratios 461

Choosing a Benchmark 463

17.4 Measuring Company Performance 466

17.5 The Role of Financial Ratios 469

17.6 Summary 470

Quiz 471

Practice Problems 472

Challenge Problem 474

S＆P Problems 475

Solutions to Self-Test Questions 475

Minicase 477

Chapter18 Financial Planning 480

18.1 What Is Financial Planning 482

Financial Planning Focuses on the Big Picture 482

Why Build Financial Plans？ 482

18.2 Financial Planning Models 484

Components of a Financial Planning Model 484

An Example of a Planning Model 485

An Improved Model 487

18.3 Planners Beware 491

Pitfalls in Model Design 491

The Assumption in Percentage of Sales Models 491

The Role of Financial Planning Models 493

18.4 External Financing and Growth 493

18.5 Summary 497

Quiz 498

Practice Problems 499

Challenge Problems 502

S＆P Problems 503

Solutions to Self-Test Questions 503

Minicase 504

Chapter19 Working Capital Management and Short-Term Planning 506

19.1 Working Capital 508

The Components of Working Capital 508

Working Capital and the Cash Conversion Cycle 509

The Working Capital Trade-off 512

19.2 Links between Long-Term and Short-Term Financing 513

19.3 Tracing Changes in Cash and Working Capital 515

19.4 Cash Budgeting 517

Forecast Sources of Cash 517

Forecast Uses of Cash 518

The Cash Balance 519

19.5 A Short-Term Financing Plan 520

Options for Short-Term Financing 520

Evaluating the Plan 522

19.6 Sources of Short-Term Financing 523

Bank Loans 523

Commercial Paper 524

Secured Loans 524

19.7 The Cost of Bank Loans 526

Simple Interest （APR） 526

Discount Interest 526

Interest with Compensating Balances 527

19.8 Summary 528

Quiz 529

Practice Problems 530

Challenge Problem 532

S＆P Problems 532

Solutions to Self-Test Questions 532

Minicase 535

Part Seven Short-term Financial Decisions 538

Chapter 20 Cash and Inventory Management 538

20.1 Cash Collection，Disbursement，and Float 540

Float 540

Valuing Float 541

20.2 Managing Float 542

Speeding Up Collections 543

Controlling Disbursements 545

Electronic Funds Transfer 547

20.3 Inventories and Cash Balances 548

Managing Inventories 548

Just-in-Time Inventory Management 551

Managing Inventories of Cash 551

Uncertain Cash Flows 553

Cash Management in the Largest Corporations 554

Investing Idle Cash：The Money Market 555

20.4 Summary 556

Quiz 557

Practice Problems 558

Challenge Problem 560

S＆P Problems 560

Solutions to Self-Test Questions 560

Chapter 21 Credit Management and Bankruptcy 562

21.1 Terms of Sale 564

21.2 Credit Agreements 566

21.3 Credit Analysis 566

Financial Ratio Analysis 567

Numerical Credit Scoring 567

When to Stop Looking for Clues 568

21.4 The Credit Decision 569

Credit Decisions with Repeat Orders 571

Some General Principles 572

21.5 Collection Policy 573

21.6 Bankruptcy 574

Bankruptcy Procedures 574

The Choice between Liquidation and Reorganization 576

21.7 Summary 578

Quiz 579

Practice Problems 580

Challenge Problems 581

S＆P Problems 582

Solutions to Self-Test Questions 582

Minicase 584

Part Eight Special Topics 585

Chapter 22 Mergers，Acquisitions，and Corporate Control 585

22.1 The Market for Corporate Control 588

Method 1：Proxy Contests 589

Method 2：Mergers and Acquisitions 589

Method 3：Leveraged Buyouts 590

Method 4：Divestitures and Spin-offs 590

22.2 Sensible Motives for Mergers 591

Economies of Scale 592

Economies of Vertical Integration 593

Combining Complementary Resources 593

Mergers as a Use for Surplus Funds 594

22.3 Dubious Reasons for Mergers 594

Diversification 594

The Bootstrap Game 595

22.4 Evaluating Mergers 596

Mergers Financed by Cash 596

Mergers Financed by Stock 598

A Warning 600

Another Warning 600

22.5 Merger Tactics 600

22.6 Leveraged Buyouts 602

Barbarians at the Gate？ 603

22.7 The Benefits and Costs of Mergers 605

22.8 Summary 607

Quiz 608

Practice Problems 608

Challenge Problems 609

S＆P Problems 610

Solutions to Self-Test Questions 610

Minicase 612

Chapter 23 International Financial Management 614

23.1 Foreign Exchange Markets 616

23.2 Some Basic Relationships 618

Exchange Rates and Inflation 619

Inflation and Interest Rates 622

Interest Rates and Exchange Rates 624

The Forward Rate and the Expected Spot Rate 625

Some Implications 626

23.3 Hedging Exchange Rate Risk 627

23.4 International Capital Budgeting 628

Net Present Value Analysis 628

The Cost of Capital for Foreign Investment 630

Avoiding Fudge Factors 631

23.5 Summary 632

Quiz 633

Practice Problems 633

Challenge Problem 635

S＆P Problems 635

Solutions to Self-Test Questions 635

Minicase 638

Chapter24 Options 640

24.1 Calls and Puts 642

Selling Calls and Puts 644

Financial Alchemy with Options 646

24.2 What Determines Option Values？ 647

Upper and Lower Limits on Option Values 648

The Determinants of Option Value 649

Option-Valuation Models 651

24.3 Spotting the Option 653

Options on Real Assets 654

Options on Financial Assets 655

24.4 Summary 657

Quiz 658

Practice Problems 659

Challenge Problems 661

S＆P Problems 661

Solutions to Self-Test Questions 662

Chapter25 Risk Management 664

25.1 Why Hedge？ 666

25.2 Reducing Risk with Options 666

25.3 Futures Contracts 668

The Mechanics of Futures Trading 670

Commodity and Financial Futures 672

25.4 Forward Contracts 673

25.5 Swaps 674

25.6 Innovation in the Derivatives Market 677

25.7 Is “Derivative” a Four-Letter Word？ 677

25.8 Summary 679

Quiz 679

Practice Problems 680

Challenge Problem 681

S＆P Problems 681

Solutions to Self-Test Questions 681

Part Nine Conclusion 686

Chapter 26 What We Do and Do Not Know about Finance 686

26.1 What We Do Know：The Six Most Important Ideas in Finance 688

Net Present Value 688

Risk and Return 688

Efficient Capital Markets 689

MM’s Irrelevance Propositions 689

Option Theory 689

Agency Theory 690

26.2 What We Do Not Know：Seven Unsolved Problems in Finance 690

What Determines Project Risk and Present Value？ 690

Risk and Return—Have We Missed Something？ 690

Are There Important Exceptions to the Efficient-Market Theory？ 691

How Can We Explain Capital Structure？ 692

How Can We Resolve the Dividend Controversy？ 692

How Can We Explain Merger Waves？ 692

What Is the Value of Liquidity？ 692

26.3 A Final Word 693

Quiz 694

Answers to Quiz 697

Appendix A：Present Value Tables 699

Appendix B：Solutions to Selected End-of-Chapter Problems 709

Glossary 722

Global Index 727

Index 729