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| Preface | |
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| Acknowledgments | |
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| The Foundations | |
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| The Firm: Structural Set-up | |
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| First Principles | |
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| Corporate Financial Decisions, Firm Value, and Equity Value | |
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| A Real-World Focus | |
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| A Resource Guide | |
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| Some Fundamental Propositions About Corporate Finance | |
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| Conclusion | |
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| The Objective in Decision Making | |
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| Choosing the Right Objective | |
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| The Classical Objective | |
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| Maximize Stock Prices: The Best-Case Scenario | |
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| Maximize Stock Prices: Real-World Conflicts of Interest | |
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| Alternatives to Stock Price Maximization | |
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| Maximize Stock Prices: Salvaging a Flawed Objective | |
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| A Postscript: The Limits of Corporate Finance | |
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| Conclusion | |
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| Live Case Study: Corporate Governance Analysis | |
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| Problems and Questions | |
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| The Basics of Risk | |
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| Motivation and Perspective in Analyzing Risk | |
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| Equity Risk and Expected Returns | |
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| The Risk in Borrowing: Default Risk and the Cost of Debt | |
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| Conclusion | |
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| Live Case Study: Stockholder Analysis | |
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| Problems and Questions | |
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| Risk Measurement and Hurdle Rates in Practice | |
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| Cost of Equity | |
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| From Cost of Equity to Cost of Capital | |
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| Conclusion | |
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| Live Case Study: Risk and Return: Analysis for the Firm | |
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| Problems and Questions | |
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| Measuring Return on Investments | |
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| What Is a Project? | |
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| Hurdle Rates for Firms Versus Hurdle Rates for Projects | |
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| Measuring Returns: The Choices | |
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| Investment Decision Rules | |
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| Probabilistic Approaches to Investment Analysis | |
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| Conclusion | |
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| Live Case Study: Estimating Earnings and Cash Flows | |
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| Problems and Questions | |
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| Project Interactions, Side Costs, and Side Benefits | |
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| Mutually Exclusive Projects | |
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| Side Costs from Projects | |
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| Side Benefits from Projects | |
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| Options Embedded in Projects | |
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| Measuring the Quality of Existing Investments | |
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| Conclusion | |
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| Live Case Study: Estimating Earnings and Cash Flows | |
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| Problems and Questions | |
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| Capital Structure: Overview of the Financing Decision | |
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| The Choices: Types of Financing | |
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| Financing Behavior | |
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| The Process of Raising Capital | |
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| The Tradeoff of Debt | |
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| No Optimal Capital Structure | |
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| There is an Optimal Capital Structure | |
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| How Firms Choose Their Capital Structures | |
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| Conclusion | |
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| Live Case Study: Analyzing a Firm's Current Financing Choices | |
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| Problems and Questions | |
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| Capital Structure: The Optimal Financial Mix | |
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| Operating Income Approach | |
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| Cost of Capital Approach | |
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| Adjusted Present Value Approach | |
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| Comparative Analysis | |
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| Selecting the Optimal Debt Ratio | |
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| Conclusion | |
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| Live Case Study: The Optimal Financing Mix | |
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| Problems and Questions | |
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| Capital Structure: The Financing Details | |
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| A Framework for Capital Structure Changes | |
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| Immediate, Gradual or no Change | |
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| Choosing the Right Financing Instruments | |
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| Conclusion | |
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| Live Case Study: Mechanics of Moving to the Optimal | |
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| Problems and Questions | |
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| Dividend Policy | |
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| Background on Dividend Policy | |
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| When are Dividends Irrelevant? | |
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| The "Dividends are Bad" School | |
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| The "Dividends are Good" School | |
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| Managerial Interests and Dividend Policy | |
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| Conclusion | |
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| Live Case Study: The Tradeoff on Dividend Policy | |
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| Problems and Questions | |
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| Analyzing Cash Returned to Stockholders | |
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| Cash Returned to Stockholders | |
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| A Cash Flow Approach to Analyzing Dividend Policy | |
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| A Comparable Firm Approach to Analyzing Dividend Policy | |
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| Managing Changes in Dividend Policy | |
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| Conclusion | |
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| Live Case Study: A Framework for Analyzing Dividends | |
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| Problems and Questions | |
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| Valuation: Principles and Practice | |
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| Discounted Cash Flow Valuation | |
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| Relative Valuation | |
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| Reconciling Different Valuations | |
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| Conclusion | |
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| Live Case Study: Valuation | |
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| Problems and Questions | |
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| Basic Statistics | |
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| Financial Statements | |
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| Time Value of Money | |
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| Option Pricing | |
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| Glossary | |
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| Index | |