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Table of Contents

    • About the Authors
    • Dedication
    • Preface 
    • Acknowledgments
    • 1Introduction to Finance
      • 1.1The Financial System
      • 1.2Money and Capital Markets
      • 1.3Primary and Secondary Markets
      • 1.4Corporate Governance
      • 1.5Six Important Ideas in Finance
    • 2Financial Statements and Ratio Analysis

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      • 2.1The Financial Statements

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      • 2.2The Goals of Financial Analysis

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      • 2.3Financial Statement and Ratio Analysis

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      • 2.4Common-Sized Financial Statements

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      • 2.5DuPont Ratio Analysis

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      • 2.6Putting the Ratios to Work

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    • 3Introduction to the Time Value of Money

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      • 3.1Interest and Timelines

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      • 3.2Future Value of a Sum

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      • 3.3The Effective Interest Rate

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      • 3.4Solving for Rate and Time Periods

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      • 3.5Present Value of a Sum

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    • 4Annuities and Loans

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      • 4.1Future Value of Streams of Payments

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      • 4.2Present Value of Streams of Payments

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      • 4.3Help with Advanced Time Value Problems

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      • 4.4Balloon Loans

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      • 4.5Amortized Loans

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    • 5Introduction to Risk and Return

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      • 5.1The Risk–Return Relationship

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      • 5.2Computing the Return on a Single Asset

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      • 5.3Evaluating the Risk of Holding a Single Asset

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      • 5.4Computing the Expected Return for a Portfolio of Assets

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      • 5.5Evaluating the Risk of a Portfolio of Assets

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    • 6Portfolio Theory

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      • 6.1Diversification

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      • 6.2The Market Portfolio

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      • 6.3Systematic Risk

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      • 6.4Portfolios with the Risk-Free Asset

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      • 6.5Risk and Return in Equilibrium

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    • 7Interest Rates and Bonds

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      • 7.1Zero Coupon Bond Features and Markets

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      • 7.2Zero Coupon Bond Yields and Pricing

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      • 7.3Determinants of the Shape of the Yield Curve

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      • 7.4Coupon Bond Features and Markets

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      • 7.5Coupon Bond Yields and Pricing

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      • 7.6Coupon Bond Price Properties

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      • 7.7Appendix: Forward Rates, Expectations, and Maturity Preference

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    • 8Stock Valuation and Market Efficiency

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      • 8.1Features of Stocks and Stock Markets

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      • 8.2Valuation of Preferred Stock

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      • 8.3The Valuation of Common Stock Using the Dividend Discount Model

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      • 8.4Stock Repurchases and the Total Payout Model

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      • 8.5Price Earnings Valuation Method

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      • 8.6The Efficient Markets Hypothesis

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    • 9Capital Budgeting: Introduction and Techniques

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      • 9.1Why Do Capital Budgeting?

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      • 9.2Steps in the Capital Budgeting Process

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      • 9.3Overview of Techniques for Analyzing Projects

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      • 9.4Net Present Value and Profitability Index

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      • 9.5Internal Rate of Return and MIRR

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    • 10Capital Budgeting: Estimating Cash Flows

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      • 10.1Free Cash Flow

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      • 10.2Expansion Projects: Basic

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      • 10.3Replacement Projects: Basic

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      • 10.4Capital Budget Refinements

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      • 10.5Appendix 1: Expansion Projects Using CCA

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      • 10.6Appendix 2: Replacement Projects Using CCA

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    • 11Cost of Capital

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      • 11.1Why Compute the Cost of Capital

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      • 11.2After-Tax Cost of Debt

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      • 11.3Cost of Preferred Stock

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      • 11.4Cost of Common Stock

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      • 11.5Computing a Weighted Average Cost of Capital

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      • 11.6Divisional Cost of Capital

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    • 12Capital Structure

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      • 12.1Measures of Leverage

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      • 12.2The Effects of Leverage

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      • 12.3Capital Structure with No Taxes

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      • 12.4Capital Structure with Taxes

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      • 12.5The Static Trade-off Theory

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    • 13Dividends, Repurchases, and Splits

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      • 13.1Distributions

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      • 13.2Dividends

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      • 13.3Stock Repurchases

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      • 13.4Stock Dividends and Splits

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    • 14Financial Planning and Forecasting

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      • 14.1Sales Forecasting

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      • 14.2Cash Budgeting

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      • 14.3Financial Statements Forecasting

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      • 14.4Additional Funds Needed and Growth

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    • 15The Management of Working Capital

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      • 15.1The Operating Period and Cash Conversion Cycle

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      • 15.2How to Manage Inventory

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      • 15.3How to Manage Accounts Receivable

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      • 15.4How to Manage Cash

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      • 15.5Short-Term Financing Alternatives

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    • 16International Finance

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      • 16.1Basics of Exchange Rates

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      • 16.2How Exchange Rates are Established

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      • 16.3Interest Rate Parity

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      • 16.4International Finance Risk

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      • 16.5Foreign Investments

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    • 17Corporate Valuation

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      • 17.1Advanced Financial Statements Forecasting

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      • 17.2Free Cash Flow

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      • 17.3Discounted Free Cash Flow Valuation

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      • 17.4Discounted Cash Flow to Equity

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    • 18Futures and Options

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      • 18.1Forward Contracts

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      • 18.2Futures Contracts

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      • 18.3Hedging with Futures Contracts

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      • 18.4Option Contracts

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      • 18.5Option Payoffs and Profits

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      • 18.6Option Pricing

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    • 19Advanced Capital Structure

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      • 19.1Leverage and a Fixed D/V Ratio

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      • 19.2Leverage and Systematic Risk

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      • 19.3Summary of Capital Structure Theory

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      • 19.4Other Effects of Leverage

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    • 20Mergers and Acquisitions

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      • 20.1The Basic Terminology of Mergers and Acquisitions

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      • 20.2The Economic Gains to Mergers

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      • 20.3Evaluating Acquisitions

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      • 20.4Defence Tactics

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