British English

Financial Times Handbook of Corporate Finance, The ,2nd edition::9780273759966

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Published by FT Publishing International (August 27, 2013) © 2014

Glen Arnold
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    ISBN-13: 9780273759966

    Financial Times Handbook of Corporate Finance, The ,2nd edition

    Published 2014

    Language: British English

    The Financial Times Handbook of Corporate Finance is the authoritative introduction to the principles and practices of corporate finance and the financial markets. Whether you are an experienced manager or finance officer, or you’re new to financial decision making, this handbook identifies all those things that you really need to know:

     

    ·        An explanation of value-based management

    ·        Mergers and the problem of merger failures

    ·        Investment appraisal techniques

    ·        How to enhance shareholder value

    ·        How the finance and money markets really work

    ·        Controlling foreign exchange rate losses

    ·        How to value a company

     

    The second edition of this bestselling companion to finance has been thoroughly updated to ensure that your decisions continue to be informed by sound business principles. New sections include corporate governance, the impact of taxation on investment strategies, using excess return as a new value metric, up-to-date statistics which reflect the latest returns on shares, bonds and merger activities and a jargon-busting glossary to help you understand words, phrases and concepts.

    Corporate finance touches every aspect of your business, from deciding which capital expenditure projects are worth backing, through to the immediate and daily challenge of share holder value, raising finance or managing risk.

     

    The Financial Times Handbook  of Corporate Finance will help you and your business back the right choices, make the right decisions and deliver improved financial performance. It covers the following areas:

     

    ·        Evaluating your firm’s objectives

    ·        Assessment techniques for investment

    ·        Traditional finance appraisal techniques

    ·        Investment decision-making in companies

    ·        Shareholder value

    ·        Value through strategy

    ·        The cost of capital

    ·        Mergers: failures and success

    ·        Merger processes

    ·        How to value companies

    ·        Pay outs to shareholders

    ·        Debt finance

    ·        Raising equity capital

    ·        Managing risk

    ·        Options

    ·        Futures, forwards and swaps

    ·        Exchange rate risk

    Table of Contents

    CONTENTS

    Introduction

    ·         Some of the financial issues covered

    ·         The scope of corporate finance

     

    Chapter 1. What is the firm’s objective?

    • A common purpose
    • The assumed objective of finance
    • Why should we aim for shareholder wealth?
    • What is shareholder wealth?
    • Profit maximisation is not the same as shareholder wealth maximisation
    • Getting manager’s objectives aligned with shareholder’s objectives
    • What happens if control over directors is weak?
    • Conclusion

     

     

    PART 1 – IINVESTING IN PROJECTS? 

     

    Chapter 2. State-of-the-art project assessment techniques

    • How do you know whether an investment generates value for shareholders?
    • State-of-the-art technique 1: net present value
    • State-of-the-art technique 2: internal rate of return
    • Choosing between NPV and IRR
    • Appendix 2.1 Mathematical tools for finance

     

    Chapter 3. Traditional appraisal techniques 

    • What appraisal techniques businesses actually use
    • Payback
    • Accounting rate of return
    • Internal rate of return: reason for continued popularity

     

    Chapter 4. Investment decision-making in companies 

    • The managerial art of investment selection
    • More tricky issues in real world project appraisal
    • The stages of investment decision making

     

    Chapter 5. Allowing for risk in project appraisal 

    • What is risk?
    • Adjusting for risk through the discount rate
    • Sensitivity analysis
    • Scenario analysis
    • Probability analysis
    • Problems with using probability analysis
    • Evidence of risk analysis in practice

     

    PART 2 SHAREHOLDER VALUE 

    Chapter 6. Value managed companies versus earnings managed companies

    • The pervasiveness of the value approach
    • Case studies: FT100 companies creating value and destroying value
    • Why shareholder value?
    • Three steps to value
    • Earnings-based management’s failings
    • ROCE has failings
    • Focusing on earnings is not the same as value
    • How a business creates value
    • The five actions to create value

     

    Chapter 7. Value through strategy

    • Value principles touch every corner of the business
    • Strategic business unit management
    • The firm’s objective
    • Strategic assessment
    • Strategic choice
    • Strategy implementation
    • What use is the head office?
    • Targets and motivation

     

    Chapter 8. Value creation within strategic business units

    ·         Using cash flow to measure value

    ·         Shareholder value analysis

    ·         Economic profit

    ·         Economic value added (EVA)

    ·         Cash flow return on investment

     

    Chapter 9. Entire firm value measurement 

    • Total shareholder return
    • Wealth added index
    • Market added value
    • Market to book ratio

     

    Chapter 10. What is the company’s cost of capital?

    • A word of warning
    • The required rate of return
    • Two sides of the same coin
    • The weighted average cost of capital
    • The cost of equity capital
    • The cost of retained earnings
    • Debt capital
    • The cost of preference share capital
    • Hybrid secu
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