Description
Introducing Corporate Finance 2nd edition is a text written for one semester introductory finance and corporate finance courses at both the undergraduate and postgraduate level. This text focuses on offering a true introduction to corporate finance, with extensive explanations and case studies that apply real-world finance scenarios to corporate finance theory. The fundamental concepts and theories of corporate finance are effectively contextualised through the use of Australian company financial data, strategically placed pedagogical elements to reinforce learning and an accessible writing style. PART 1: FOUNDATIONS OF CORPORATE FINANCE Chapter 1: Introducing the firm and its goals Chapter preview Goals of firms Roles of financial managers The principal – agent problem Ethics in business Challenges facing modern firms How being a person affects decision making Executive summary Chapter 2: Business structures and Taxation Chapter preview Forms of business organisation Features of Australian income taxation arrangements Dividend imputation Executive summary Chapter 3: Business and the financial markets Chapter preview The roles of the financial markets Financing business operations Types of financial institutions Classifying the markets Debt and equity Forms of debt Equity instruments Regulators and regulation Executive summary Chapter 4: Financial mathematics Chapter preview Cash flows, interest and the time value money Simple interest An application of simple interest: pricing commercial bills Compound interest Future and present value of several equal sums Present and future value of unequal amounts Solving time value problems executive summary Chapter 5: Understanding risk and return Chapter preview What is return? Calculating returns What is risk? The relationship between risk and return Reducing risk The capital asset pricing model Executive summary PART 2: INVESTMENT CHOICES Chapter 6: Valuation of bonds and shares Chapter preview Price and value How are security prices set? Principles of security valuation Valuing bonds Valuing preference shares Valuing ordinary shares Price – earning ratio Executive summary Chapter 7: Cost of capital Chapter preview The cost of capital concept Estimating the component costs Under-utilisation of imputation credits The weighted-average cost of capital Capital structure Evaluation changes in capital structure Executive summary Chapter 8: Planning investments – discounted cash flow techniques Chapter preview Investment and the business of the firm Investments and firm value Estimating cash flows Net present value Internal rate of return Executive summary Chapter 9: Planning investments – some real-world companies Chapter preview Analysing a set of projects Incorporating risk into the analysis Taxation and investment planning Non-discounted methods of project evaluation Non-financial factors in project choices Executive summary PART 3: FINANCING THE FIRM Chapter 10: Short-term finance – working capital Chapter preview Working capital Ana appropriate level of net working capital Sources and costs of informal short-term finance Sources and costs off normal short-term finance Executive summary Chapter 11: Managing current assets Chapter preview The dual meaning of ‘cash’ The motives for holding cash Managing cash Using electronic funds transfer (EFT) Debtors or accounts receivable Managing inventories Executive summary Chapter 12: Long-term external finance Chapter preview Intermediated finance The lease or buy decision Debt finance from the Australian market Hybrid finance from the Australian market International sources of funding Equity finance securities Raising equity finance Executive summary Chapter 13: Dividend policy and internal financing Chapter preview Fundamental dividend concepts Dividend irrelevance theory Dividend relevance theories Alternatives to cash dividends Optimal dividend policy Executive summary Chapter 14: Forecasting to evaluate financial decisions Chapter preview Overview of Australian corporate financial statements Planning an forecasting Cash budgeting Pro-forma financial statements Developing the pro-forma financial statements Whit is financial ratio analysis? Key ratios and financial statements Executive summary PART 4: SPECIAL TOPICS IN CORPORATE FINANCE Chapter 15: Risk management Chapter preview Managing risk Types of traders in the markets Futures markets The FRA market The swaps markets Company-issued options Rules for hedgers using derivatives Executive summary Chapter 16: Capital restructuring – takeovers and divestments Chapter preview Takeovers The takeover procedure Why acquire another company? The value of a takeover From public to private ownership From private to public ownership Selling part of the company Executive summary Chapter 17: International corporate finance Chapter preview The foreign exchange market Determinants of the foreign exchange rate Exchange rate risk International capital budgeting Executive summary CASE STUDIES Financial advisory service Next Net Solar Sail Ltd Hygienic Solutions and the EnviroMist Spring Chickens Financial advisory service II Greenfish Ltd Rebellion Flour Ltd Financial advisory service III Financial advisory service IV Romantic Roses Speedy Concrete Financial advisory service V Palmer Hardware Ltd First Blush Ltd
