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Preface | |
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Acknowledgments | |
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What is Finance? | |
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Capital Markets & Capital Market Theory | |
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Financial Management | |
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Investment management | |
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Organization of this book | |
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The Bottom Line | |
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Questions | |
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The Financial System | |
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Financial Instruments, Markets, and Intermediaries | |
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The financial system | |
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The Role of Financial Markets | |
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The role of financial intermediaries | |
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Types of financial markets | |
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The Bottom Line | |
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Questions | |
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The Financial System's Cast of Characters | |
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Domestic nonfinancial sectors | |
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Nonfinancial businesses | |
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Domestic financial sectors | |
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The foreign sector | |
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The Bottom Line | |
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Questions | |
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Financial Management | |
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Financial Statements | |
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Accounting principles: What are they? | |
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The basic financial statements | |
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How are the statements related? | |
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Why bother about the footnotes? | |
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Accounting flexibility | |
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U.S. accounting v. outside of the U.S | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Business Finance | |
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Forms of business enterprise | |
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The objective of financial management | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Financial Strategy and Financial Planning | |
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Strategy and value | |
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The budgeting process | |
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Budgeting | |
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Performance evaluation | |
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Strategy and value creation | |
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The Bottom Line | |
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Questions | |
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Dividend and Dividend Policies | |
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Dividends | |
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Stock distributions | |
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Dividend policy | |
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Stock repurchases | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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The Corporate Financing Decision | |
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Debt v. equity | |
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Financial leverage and risk | |
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Financial distress | |
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The cost of capital | |
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Optimal capital structure: Theory and practice | |
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The Bottom Line | |
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Solutions to Try It! Problems | |
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Questions | |
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Investment Management | |
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Setting investment objectives | |
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Establishing an investment policy | |
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Constructing and monitoring a portfolio | |
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Measuring and evaluating performance | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Valuation and Analysis Tools | |
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Time Value of Money | |
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Why the time value of money? | |
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Calculating the future value | |
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Calculating a present value | |
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Determining the unknown interest rate | |
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The time value of a series of cash flows | |
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Annuities | |
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Loan amortization | |
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Interest rates and yields | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Financial Ratio Analysis | |
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Classifying financial ratios | |
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Liquidity | |
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Profitability ratios | |
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Activity ratios | |
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Financial leverage | |
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Return on investment | |
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The Du Pont system | |
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Common-size analysis | |
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Using financial ratio analysis | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Cash Flow Analysis | |
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Difficulties with measuring Cash Flow | |
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Free cash flow | |
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Usefulness of cash flows analysis | |
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Ratio analysis | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Capital Budgeting | |
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Investment decisions and owners' wealth | |
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The capital budgeting process | |
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Determining cash flows from investments | |
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Capital budgeting techniques | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Investments | |
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The World of Derivatives | |
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Futures and forward contracts | |
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Options | |
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Swaps | |
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The Bottom Line | |
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Appendix: Black-Scholes option pricing model | |
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Solutions to Try it! Problems | |
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Questions | |
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Financial Risk Management | |
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The definition of risk | |
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Enterprise risk management | |
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Managing risks | |
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The Bottom Line | |
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Questions | |
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The Theory of Portfolio Selection | |
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Some basic concepts | |
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Estimating a portfolio's expected return | |
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Measuring portfolio risk | |
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Portfolio diversification | |
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Choosing a portfolio of risky assets | |
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Behavioral finance and portfolio theory | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Asset Pricing Theory: The Capital Asset Pricing Model | |
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Characteristics of an asset pricing model | |
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Overview of the capital asset pricing model | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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The Structure of Interest Rates | |
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The base interest rate | |
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The term structure of interest rates | |
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Term structure of interest rates theories | |
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Swap rate yield curve | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Valuing Common Stock | |
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Discounted cash flow models | |
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Relative valuation methods | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Valuing Bonds | |
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Valuing a bond | |
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Conventional yield measures | |
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Valuing bonds that have embedded options | |
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The Bottom Line | |
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Solutions to Try it! Problems | |
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Questions | |
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Appendix: Solutions to End of Chapter Questions and Problems | |
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Glossary | |
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About the Authors | |
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Index | |