Principles of corporate finance
- 8th Rep
- New Delhi Tata McGraw-Hill Company Ltd.. 2004
- 1070p
Contents: Preface; Part One: Value; 1 Introduction to Corporate Finance; 1-1 Corporate Investment and Financing Decisions; Investment Decisions; Financing Decisions; What Is a Corporation; The Role of the Financial Manager; 1-2 The Financial Goal of the Corporation; Shareholders Want Managers to Maximize Market Value; A Fundamental Result; The Investment Trade-off; Should Managers Look After the Interests of Their Shareholders; Agency Problems and Corporate Governance; 1-3 Preview of Coming Attractions; Summary; Problem Sets Appendix: Why Maximizing Shareholder Value Makes Sense; 2 How to Calculate Present Values; 2-1 Future Values and Present Values; Calculating Future Values; Calculating Present Values; Valuing an Investment Opportunity; Net Present Value; Risk and Present Value; Present Values and Rates of Return; Calculating Present Values When There Are Multiple Cash Flows; The Opportunity Cost of Capital; 2-2 Looking for Shortcuts-Perpetuities and Annuities; How to Value Perpetuities; How to Value Annuities; Valuing Annuities Due; Calculating Annual Payments Future Value of an Annuity; 2-3 More Shortcuts-Growing Perpetuities and Annuities; Growing Perpetuities; Growing Annuities; 2-4 How Interest Is Paid and Quoted; Continuous Compounding; Summary; Problem Sets; Finance on the Web; 3 Valuing Bonds; 3-1 Using the Present Value Formula to Value Bonds; A Short Trip to Paris to Value a Government Bond; Back to the United States: Semiannual Coupons and Bond Prices; 3-2 How Bond Prices Vary with Interest Rates; Duration and Volatility; 3-3 The Term Structure of Interest Rates Spot Rates, Bond Prices, and the Law of One Price; Measuring the Term Structure; Why the Discount Factor Declines as Futurity Increases-and a Digression on Money Machines; 3-4 Explaining the Term Structure; Expectations Theory of the Term Structure; Introducing Risk; Inflation and Term Structure; 3-5 Real and Nominal Rates of Interest; Indexed Bonds and the Real Rate of Interest; What Determines the Real Rate of Interest; Inflation and Nominal Interest Rates; 3-6 The Risk of Default; Corporate Bonds and Default Risk; Sovereign Bonds and Default Risk; Summary Further Reading; Problem Sets; Finance on the Web; 4 The Value of Common Stocks; 4-1 How Common Stocks Are Traded; Trading Results for GE; 4-2 How Common Stocks Are Valued; Valuation by Comparables; Stock Prices and Dividends; 4-3 Estimating the Cost of Equity Capital; Using the DCF Model to Set Gas and Electricity Prices; Dangers Lurk in Constant-Growth Formulas; 4-4 The Link Between Stock Price and Earnings per Share; Calculating the Present Value of Growth Opportunities for Fledgling Electronics; 4-5 Valuing a Business by Discounted Cash Flow