Chapter 1: Introduction of Corporate Finance
Introduction of corporate finance
Investments projects and firms
Chapter 2: The Time Value of Money and Net Present Value
The time value of money and net present value
Basic scenario perfect markets certainty constant interest rates
Returns net returns and rates of return
The time value of money future value and compounding
Present values discounting and capital budgeting
Chapter 3: Stock and Bond Valuation: Annuities and Perpetuities
Stock and bond valuation annuities and perpetuities
Projects with different lives and rental equivalents
Perpetuity and annuity derivations
Comparing different multiyear contracts
Chapter 4: A First Encounter with Capital Budgeting Rules
A first encounter with capital budgeting rules
The internal rate of return irr
The payback capital budgeting rule
How do chief financial officers CFOS decide
Chapter 5: Time-Varying Rates of Return and the Yield Curve
Working with time varying rates of return
Study of treasury bills and yield curve in time varying interest rates
Why is the slope of yield curve upward
Corporate insights about time varying costs of capital obtained from the yield curve
Extracting forward interest rates
Shorting and locking in forward interest rate
Institutional knowledge about compounding and price quotes
Chapter 6: Uncertainty, Default, and Risk
Interest rates and credit risk default risk
Uncertainty in capital budgeting
Splitting uncertain project payoffs into debt and equity
Chapter 7: A First Look at Investments
Risk and return risk aversion in a perfect market
Cash bonds and stocks 1970 to 2007
Market institutions related to equity an overview
Chapter 8: Investor Choice Risk and Reward
Investor choice risk and reward
Portfolios diversification and investor preferences
How to measure risk contribution
Expected rates of return and market betas for weighted portfolios and firms
Spreadsheet calculations for risk and reward
An investors specific trade off between risk and reward
A shortcut formula for the risk of a portfolio
Graphing the mean variance efficient frontier
Chapter 9: The Capital Asset Pricing Model
The capital asset pricing model
What you already know and what you want to know
The capital asset pricing model capm a cookbook recipe approach
The capm cost of capital in the present value formula
Empirical evidence is the capm the right model
Application certainty equivalence
Chapter 10: Market Imperfections
Causes and consequences of imperfect markets
Opinions disagreements and insider information
Market depth and transaction costs
Deconstructing quoted rates of return liquidity and tax premiums
Multiple effects how to work novel problems
Chapter 11: Perfect and Efficient Markets, and Classical and Behavioral Finance
Perfect and efficient markets and classical and behavioral finance
The fundamentals based classification and behavioral finance
Chapter 12: Capital Budgeting Applications and Pitfalls
Capital budgeting applications and pitfalls
Promised expected typical or most likely
Badly blended costs of capital
The economics of project interactions
Evaluating projects incrementally
Decision trees one set of parameters
Projects with different parameters
Appendix valuing some more real options
Chapter 13: from Financial Statements to Economic Cash Flows
From financial statements to economic cash flows
A bottom up example long term accruals depreciation
Bottom up example deferred taxes
Bottom up example short term accruals and working capital
Extracting economic cash flow from pepsico financials
Summary in from financial statements to economic cash flows
Chapter 14: Valuation from Comparables and Some Financial Ratios
Valuation comparables financial ratios
Capital structure payout policy
Comparables and net present value
The price or earnings p or e ratio
Problems with price or earnings ratios
Chapter 15: Corporate Claims
Tracking ibms capital structure from 2001 to 2003
Chapter 16: Capital Structure and Capital Budgeting In a Perfect Market
Capital structure and capital budgeting in a perfect market
Conceptual basics maximization of equity value or firm value
Modigliani and miller the informal way
Modigliani and miller the formal way
The weighted average cost of capital wacc
The big picture how to think of debt and equity
Non financial and operational liabilities and the marginal cost of capital
Chapter 17: the Weighted Cost of Capital and Adjusted Present Value in an Imperfect Market with Taxes
The weighted cost of capital and adjusted present value in an imperfect market with taxes
Relative taxation of debt and equity
Firm value under different capital structures
Formulaic valuation methods apv and wacc
A sample application of tax adjusted valuation techniques
The tax subsidy on pepsicos financial statement
The discount factor on tax obligations and tax shelters
Chapter 18: What Matters?
The role of personal income taxes and clientele effects
Operating policy behavior in bad times financial distress
Operating policy agency issues and behaviour in good times
Inside information and adverse selection
Transaction costs and behavioural issues
Static capital structure summary
The effect of leverage on costs of capital and quoted bond yields
Valuation formulas with many market imperfections
Chapter 19: Equity Payouts
Dividends and share repurchases
Chapter 20: for Value, Financial Structure and Corporate Strategy Analysis
For value financial structure and corporate strategy analysis
The length of the detailed projection period
Alternative assumptions and sensitivity and scenario analyses
Proposing capital structure change
Caution the emperors new clothes
Chapter 21: Capital Structure Dynamics
Capital structure dynamics firm scale
Theories of capital structure levels changes and issuing activity
Capital market pressures toward the optimal capital structure
Working capital management and financial flexibility
Debt and debt hybrid offerings
Raising funds through other claims and means
The capital market response to issue and dividend announcements
Chapter 22: Capital Structure Patterns In the United States
Capital structure patterns in the united states
Empirical capital structure patterns
What are the underlying rationales for capital structure changes
Chapter 23: Investment Banking and Mergers and Acquisitions
Investment banking and mergers and acquisitions
Underwriting services from the firms perspective
Mergers and acquisitions m and a from the firms perspective
Chapter 24: Corporate Governance
Separation of ownership and control
The role of social institutions
Debt the right of creditors to force default
Equity the right of shareholders to vote
The design and effectiveness of corporate governance systems
Chapter 25: International Finance
Investments in foreign financial markets
Capital budgeting with foreign cash flows
Chapter 26: Options and Risk Management
A call and put options on stock
