Principles of corporate finance:
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Boston [u.a.]
McGraw-Hill/Irwin
2008
|
| Edition: | 9. ed. |
| Series: | The McGraw-Hill/Irwin series in finance, insurance, and real estate : Financial management
|
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Item Description: | 8. Aufl. u.d.T.: Brealey, Richard A.: Corporate finance Includes bibliographical references and index |
| Physical Description: | Getr. Zählung graf. Darst. |
| ISBN: | 9780073405100 0073405108 |
Staff View
MARC
| LEADER | 00000nam a2200000zc 4500 | ||
|---|---|---|---|
| 001 | BV035047533 | ||
| 003 | DE-604 | ||
| 005 | 00000000000000.0 | ||
| 007 | t | ||
| 008 | 080910s2008 xxu|||| |||| 00||| eng d | ||
| 020 | |a 9780073405100 |9 978-0-07-340510-0 | ||
| 020 | |a 0073405108 |9 0-07-340510-8 | ||
| 035 | |a (OCoLC)159822486 | ||
| 035 | |a (DE-599)BVBBV035047533 | ||
| 040 | |a DE-604 |b ger |e aacr | ||
| 041 | 0 | |a eng | |
| 044 | |a xxu |c US | ||
| 049 | |a DE-573 |a DE-739 | ||
| 050 | 0 | |a HG4026 | |
| 082 | 0 | |a 658.15 |2 22 | |
| 084 | |a QP 700 |0 (DE-625)141926: |2 rvk | ||
| 084 | |a WIR 680f |2 stub | ||
| 100 | 1 | |a Brealey, Richard A. |d 1936- |e Verfasser |0 (DE-588)124289401 |4 aut | |
| 245 | 1 | 0 | |a Principles of corporate finance |c Richard A. Brealey ; Stewart C. Myers ; Franklin Allen |
| 246 | 1 | 3 | |a Corporate finance |
| 250 | |a 9. ed. | ||
| 264 | 1 | |a Boston [u.a.] |b McGraw-Hill/Irwin |c 2008 | |
| 300 | |a Getr. Zählung |b graf. Darst. | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 490 | 0 | |a The McGraw-Hill/Irwin series in finance, insurance, and real estate : Financial management | |
| 500 | |a 8. Aufl. u.d.T.: Brealey, Richard A.: Corporate finance | ||
| 500 | |a Includes bibliographical references and index | ||
| 650 | 7 | |a Finanzas corporativas |2 lemb | |
| 650 | 4 | |a Corporations |x Finance | |
| 650 | 0 | 7 | |a Finanzplanung |0 (DE-588)4017200-4 |2 gnd |9 rswk-swf |
| 650 | 0 | 7 | |a Unternehmen |0 (DE-588)4061963-1 |2 gnd |9 rswk-swf |
| 650 | 0 | 7 | |a Corporate Finance |0 (DE-588)4269795-5 |2 gnd |9 rswk-swf |
| 650 | 0 | 7 | |a Finanzierung |0 (DE-588)4017182-6 |2 gnd |9 rswk-swf |
| 650 | 0 | 7 | |a Finanzmanagement |0 (DE-588)4139075-1 |2 gnd |9 rswk-swf |
| 655 | 7 | |8 1\p |0 (DE-588)4151278-9 |a Einführung |2 gnd-content | |
| 655 | 7 | |8 2\p |0 (DE-588)4123623-3 |a Lehrbuch |2 gnd-content | |
| 689 | 0 | 0 | |a Unternehmen |0 (DE-588)4061963-1 |D s |
| 689 | 0 | 1 | |a Finanzierung |0 (DE-588)4017182-6 |D s |
| 689 | 0 | 2 | |a Corporate Finance |0 (DE-588)4269795-5 |D s |
| 689 | 0 | |8 3\p |5 DE-604 | |
| 689 | 1 | 0 | |a Unternehmen |0 (DE-588)4061963-1 |D s |
| 689 | 1 | 1 | |a Finanzplanung |0 (DE-588)4017200-4 |D s |
| 689 | 1 | |8 4\p |5 DE-604 | |
| 689 | 2 | 0 | |a Finanzierung |0 (DE-588)4017182-6 |D s |
| 689 | 2 | 1 | |a Finanzmanagement |0 (DE-588)4139075-1 |D s |
| 689 | 2 | |8 5\p |5 DE-604 | |
| 700 | 1 | |a Myers, Stewart C. |d 1940- |e Verfasser |0 (DE-588)129325023 |4 aut | |
| 700 | 1 | |a Allen, Franklin |e Verfasser |4 aut | |
| 856 | 4 | 2 | |m GBV Datenaustausch |q application/pdf |u http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016716264&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |3 Inhaltsverzeichnis |
| 999 | |a oai:aleph.bib-bvb.de:BVB01-016716264 | ||
| 883 | 1 | |8 1\p |a cgwrk |d 20201028 |q DE-101 |u https://d-nb.info/provenance/plan#cgwrk | |
| 883 | 1 | |8 2\p |a cgwrk |d 20201028 |q DE-101 |u https://d-nb.info/provenance/plan#cgwrk | |
| 883 | 1 | |8 3\p |a cgwrk |d 20201028 |q DE-101 |u https://d-nb.info/provenance/plan#cgwrk | |
| 883 | 1 | |8 4\p |a cgwrk |d 20201028 |q DE-101 |u https://d-nb.info/provenance/plan#cgwrk | |
| 883 | 1 | |8 5\p |a cgwrk |d 20201028 |q DE-101 |u https://d-nb.info/provenance/plan#cgwrk | |
Record in the Search Index
| _version_ | 1804137985232338944 |
|---|---|
| adam_text | PRINCIPLEOO/ CORPORATE FINANCE N I N T H E D I T I O N RICHARD A.
BREALEY PROFESSOR OF FINANCE LONDON BUSINESS SCHOOL STEWART C. MYERS
ROBERT C. MERTON (1970) PROFESSOR OF FINANCE SLOAN SCHOOL OF MANAGEMENT
MASSACHUSETTS INSTITUTE OF TECHNOLOGY FRANKLIN ALLEN NIPPON LIFE
PROFESSOR OF FINANCE THE WHARTON SCHOOL UNIVERSITY OF PENNSYLVANIA
MCGRAW-HIII IRWIN BOSTON BURRRIDGE, IL DUBUQUE, IA NEW YORK SAN
FRANCISCO ST. LOUIS BANGKOK BOGOTA CARACAS KUALA LUMPUR LISBON LONDON
MADRID MEXICO CITY MILAN MONTREAL NEW DELHI SANTIAGO SEOUL SINGAPORE
SYDNEY TAIPEI TORONTO P A R T O N E VALUE ~1 C H A P T E R 1 FINANCE AND
THE FINANCIAL MANAGER 2 1.1 WHAT IS A CORPORATION? 3 1.2 THE ROLE OF THE
FINANCIAL MANAGER 4 1.3 WHO IS THE FINANCIAL MANAGER? 6 1.4 SEPARATION
OF OWNERSHIP AND MANAGEMENT 7 1.5 TOPICS COVERED IN THIS BOOK 9 SUMMARY
10 FURTHER READING 10 CONCEPT REVIEW QUESTIONS 11 QUIZ 11 C H A P T E R
2 PRESENT VALUES, THE OBJECTIVES OF THE FIRM, AND CORPORATE GOVERNANCE
13 2.1 INTRODUCTION TO PRESENT VALUE 14 CALAILATING FIITARE VALUE AND
PRESENT VALUE /NET PRESENT VALUEIRISK AND PRESENT VALUE / PRESENT VALUES
AND RATES OF RETURN /THE OPPORTUNITY COST OF CAPITAL / A SOURCE
OFCONFUSION 2.2 FOUNDATIONS OF THE NET PRESENT VALUE RULE 19 HOW CAPITAL
MARKETS RECONCILE PREFERENCES FOR CURRENT VS, FUTURE CONSUMPTION IA
FUNDAMENTAL RESULT /OTHER CORPORATE GOALS 2.3 CORPORATE GOALS AND
CORPORATE GOVERNANCE 23 SHOULD MANAGERS LOOK AFTER THE INTERESTS OF
SHAREHOLDERS? /SHOULD FIRNIS BE MANAGED FOR SHAREHOLDERS OR ALL
STAKEHOLDERS? / ENRON, WORLDCOM, AND SOX SUMMARY 29 FURTHER READING 31
CONCEPT REVIEW QUESTIONS 31 QUIZ 31 PRACTICE QUESTIONS 32 CHALLENGE
QUESTION 34 C H A P T E R 3 HOW TO CALCULATE PRESENT VALUES 35 3.1
VALUING LONG-LIVED ASSETS 35 VALUING CASH FLOWS IN SEVERAL PERIODS / WHY
THE DISCOUNT FACTOR DECLINES AS FUTURITY INCREASES * AND A DIGRESSION ON
MONEY MACHINES / CALAILATING PVS AND NPVS 3.2 LOOKING FOR
SHORTCUTS*PERPETUITIES AND ANNUITIES 40 HOW TO VALUE PERPETUITIES / HOW
TO VALUE ANNUITIES / PV ANNUITIES: AN EXAMPLE/PV ANNUITIES: ANOTHER
EXAMPLE / PV ANNUITIES DUE /CALAILATING ANNUAL PAYMENTS: AN EXAMPLE
/FUTURE VALUE OF AN ANNUITY: AN EXAMPLE 3.3 MORE SHORTCUTS*GROWING
PERPETUITIES AND ANNUITIES 46 GROWING PERPETUITIES / GROWING ANNUITIES
3.4 COMPOUND INTEREST AND PRESENT VALUES 48 A NOTE ON COMPOUNDING
INTERVALS /CONTINUOUS COMPOUNDING SUMMARY 53 WEB PROJECTS 54 CONCEPT
REVIEW QUESTIONS 54 QUIZ 54 PRACTICE QUESTIONS 55 CHALLENGE QUESTIONS 58
XVLLL CONTENTS C H A P T E R 4 VALUING BONDS 59 4.1 USING THE PRESENT
VALUE FORMULA TO VALUE BONDS 60 A SHORT TRIP TO GERMANY TO VALUE A
GOVERNMENT BOND I BACK TO THE UNITED STATES: SEMIANNUAL COUPONS AND BOND
PRICES 4.2 HOW BOND PRICES VARY WITH INTEREST RATES 63 DURATION AND BOND
VOLATILITY /A CAUTIONARY NOTE 4.3 THE TERM STRUCTURE OF INTEREST RATES
67 THE YIELD TO MATURITY AND THE TERM STRUCTURE / MEASURING THE TERM
STRUCTURE 4.4 EXPLAINING THE TERM STRUCTURE 69 THE EXPECTATIONS THEORY /
INTRODUCING RISK / INFLATION AND TERM STRUCTURE 4.5 REAL AND NOMINAL
RATES OF INTEREST 72 INDEXED BONDS AND THE REAL RATE OF INTEREST /
INFLATION AND NOMINAL INTEREST RATES / HOW WELL DOES FISHER S THEORY
EXPLAIN INTEREST RATES? SUMMARY 78 FURTHER READING 79 WEB PROJECT 79
CONCEPT REVIEW QUESTIONS 80 QUIZ 80 PRACTICE QUESTIONS 82 CHALLENGE
QUESTIONS 84 C H A P T E R 5 THE VALUE OF COMMON STOCKS 85 5.1 HOW
COMMON STOCKS ARE TRADED 86 5.2 HOW COMMON STOCKS ARE VALUED 88 TODAY S
PRICE IBUT WHAT DETERMINES NEXT YEAR S PRICE? 5.3 ESTIMATING THE COST OF
EQUITY CAPITAL 92 USING THE DCF MODEL TO SET GAS AND ELECTRICITY PRICES
/ DANGERS LURK IN CONSTANT-GROWTH PORMULAS 5.4 THE LINK BETWEEN STOCK
PRICE AND EARNINGS PER SHARE 98 CALCULATING THE PRESENT VALUE OFGROWTH
OPPORTUNITIES FOR FLEDGLING ELECTRONICS I EXAMPLES OFGROWTH
OPPORTUNITIES 5.5 VALUING A BUSINESS BY DISCOUNTED CASH FLOW 102 VALUING
THE CONCATENATOR BUSINESS / VALUATION FORMAT ESTIMATING HORIZON VALUE IA
FURTHER REALITY CHECK SUMMARY 106 FURTHER READING 108 CONCEPT REVIEW
QUESTIONS 108 QUIZ 108 PRACTICE QUESTIONS 109 CHALLENGE QUESTIONS 112
MINI-CASE: REEBY SPORTS 113 C H A P T E R 6 WHY NET PRESENT VALUE LEADS
TO BETTER INVESTMENT DECISIONS THAN OTHER CRITERIA 115 6.1 A REVIEW OF
THE BASICS 116 NET PRESENT VALUE S COMPETITORS / THREE POINTS TO
REMEMBER ABOUT NPV / NPV DEPENDS ON CASH FLOW, NOT ON BOOK RETURNS 6.2
PAYBACK 120 THE PAYBACK RULE 6.3 INTERNAL (OR DISCOUNTED-CASH-FLOW) RATE
OF RETURN 121 CALCULATING THE IRR / THE IRR RULE / PITFALL 1*LENDING OR
BORROWING? / PITF ALL 2* MULTIPLE RATES OF RETURN / PITFALL 3 * MUTUALLY
EXCLUSIVE PROJECTS /PITFALL 4 * WHAT HAPPENS WHEN WE CAN T FINESSE THE
TERM STRUCTURE OF INTEREST RATES? /THE VERDICT ON IRR 6.4 CHOOSING
CAPITAL INVESTMENTS WHEN RESOURCES ARE LIMITED 131 AN EASY PROBLEM IN
CAPITAL RATIONING / USES OF CAPITAL RATIONING MODELS SUMMARY 134 FURTHER
READING 135 CONCEPT REVIEW QUESTIONS 136 QUIZ 136 PRACTICE QUESTIONS 137
CHALLENGE QUESTIONS 139 MINI-CASE: VEGETRON S CFO CALLS AGAIN 140 C H A
P T E R 7 MAKING INVESTMENT DECISIONS WITH THE NET PRESENT VALUE RULE
142 7.1 APPLYING THE NET PRESENT VALUE RULE 143 ONLY CASH FLOW IS
RELEVANT / ESTIMATE CASH FLOWS ON AN INCREMENTAL BASIS I TREAT INFLATION
CONSISTENTLY 7.2 EXAMPLE*IM&C S FERTILIZER PROJECT 147 SEPARATING
INVESTMENT AND FINANCING DECISIONS I INVESTMENTS IN WORKING CAPITAL / A
FURTHER NOTE ON DEPRECIATION IA FINAL COMMENT ON TAXES / PROJECT
ANALYSIS / CALCULATING NPV IN OTHER COUNTRIES AND GURRENDES 7.3
EQUIVALENT ANNUAL COSTS 155 INVESTING TO PRODUCE REFORMULATED GASOLINE
AT CALIFORNIA REFINERIES / CHOOSING BETWEEN LONG- AND SHORT-LIVED
EQUIPMENT / DECIDING WHEN TO REPLACE AN EXISTING MACHINE XIX CONTENTS
SUMMARY 160 CONCEPT REVIEW QUESTIONS 161 QUIZ 161 PRACTICE QUESTIONS 163
CHALLENGE QUESTIONS 167 MINI-CASE: NEW ECONOMY TRANSPORT (A) AND (B) 168
P A R T T W O RISK 171 C H A P T E R 8 INTRODUCTION TO RISK, RETURN, AND
THE OPPORTUNITY COST OF CAPITAL 172 8.1 OVER A CENTURY OF CAPITAL MARKET
HISTORY IN ONE EASY LESSON 172 ARITHMETIC AVERAGES AND COMPOUND ANNUAL
RETURNS / USING HISTORICAL EVIDENCE TO EVALUATE TODAY S COST OF CAPITAL
I DIVIDEND YIELDS AND THE RISK PREMIUM 8.2 MEASURING PORTFOLIO RISK 180
VARIANCE AND STANDARD DEVIATION /MEASURING VARIABILITY / HOW
DIVERSIFICATION REDUCES RISK 8.3 CALCULATING PORTFOLIO RISK 189 GENERAL
FORMIDA FOR COMPUTING PORTFOLIO RISK / LIMITS TO DIVERSIFICATION 8.4 HOW
INDIVIDUAL SECURITIES AFFECT PORTFOLIO RISK 193 MARKET RISK 7S MEASURED
BY BETA / WHY SECURITY BETAS DETERMINE PORTFOLIO RISK 8.5
DIVERSIFICATION AND VALUE ADDITIVITY 197 SUMMARY 198 FURTHER READING 199
CONCEPT REVIEW QUESTIONS 199 QUIZ 200 PRACTICE QUESTIONS 201 CHALLENGE
QUESTIONS 204 C H A P T E R 9 RISK AND RETURN 206 9.1 HARRY MARKOWITZ
AND THE BIRTH OF PORTFOLIO THEORY 206 COMBINING STOCKS INTO PORTFOLIOS /
WE INTRODUCE BORROIVING AND LENDING 9.2 THE RELATIONSHIP BETWEEN RISK
AND RETURN 213 SOME ESTIMATES OFEXPECTED RETURNS / REVIEW OF THE CAPITAL
ASSET PRICING MODEL / WLMT IFA STOCK DID NOT HIE ON THE SECURITY MARKET
LINE? 9.3 VALIDITY AND ROLE OF THE CAPITAL ASSET PRICING MODEL 217 TESTS
OF THE CAPITAL ASSET PRICING MODEL / ASSUMPTIONS BEHIND THE CAPITAL
ASSET PRICING MODEL 9.4 SOME ALTERNATIVE THEORIES 222 CONSUMPTION BETAS
VERSUS MARKET BETAS /ARBITRAGE PRICING THEORY / A COMPARISON OFTHE
CAPITAL ASSET PRICING MODEL AND ARBITRAGE PRICING THEORY / THE
THREE-FACTOR MODEL SUMMARY 227 FURTHER READING 228 CONCEPT REVIEW
QUESTIONS 229 QUIZ 229 PRACTICE QUESTIONS 231 CHALLENGE QUESTIONS 235
MINI-CASE: JOHN AND MARSHA ON PORTFOLIO SELECTION 236 C H A P T E R 10
CAPITAL BUDGETING AND RISK 238 10.1 COMPANY AND PROJECT COSTS OF CAPITAL
239 PERFECT PIICH AND THE COST OF CAPITAL / DEBT AND THE COMPANY COST OF
CAPITAL 10.2 MEASURING THE COST OF EQUITY 242 ESTIMATING BETA / THE
EXPECTED RETURN ON UNION PACIFIC CORPORATION S COMMON STOCK 10.3
SETTING DISCOUNT RATES WHEN YOU DON T HAVE A BETA 246 AVOID FUDGE
FACTORS IN DISCOUNT RATES / WHAT DETERMINES ASSET BETAS? 10.4 CERTAINTY
EQUIVALENTS*ANOTHER WAY TO ADJUST FOR RISK 250 VALUATION BY CERTAINTY
EQUIVALENTS / WHEN TO USE A SINGLE RISK-ADJUSTED DISCOUNT RATE FOR
LONG-LIVED ASSETS / A COMMON MISTAKE / WHEN YOU CANNOT USE A SINGLE
RISK-ADJUSTED DISCOUNT RATE FOR LONG- LIVED ASSETS 10.5 DISCOUNT RATES
FOR INTERNATIONAL PROJECTS 255 FOREIGN INVESTMENTS ARE NOT ALWAYS
RISKIER /FOREIGN INVESTMENT IN THE UNITED STATES /DO SOME COUNTRIES HAVE
A TOWER COST OF CAPITAL? SUMMARY 258 FURTHER READING 259 CONCEPT REVIEW
QUESTIONS 259 QUIZ 260 PRACTICE QUESTIONS 260 CHALLENGE QUESTIONS 264
MINI-CASE: THE JONES FAMILY, INCORPORATED 264 XX CONTENTS P A R T T H R
E E BEST PRACTICES IN CAPITAL BUDGETING 267 C H A P T E R 11 PROJECT
ANALYSIS 268 11.1 THE CAPITAL INVESTMENT PROCESS 269 PROJECT
AUTHORIZATIONS * AND THE PROBLEM OFBIASED FORECASTS / POSTAUDITS 11.2
SENSITIVITY ANALYSIS 271 VALUE OF INFORMATION / LIMITS TO SENSITIVITY
ANALYSIS / SCENARIO ANALYSIS / BREAK-EVEN ANALYSIS / OPERATING LEVERAGE
AND BREAK-EVEN POINTS 11.3 MONTE CARLO SIMULATION 278 SIMULATING THE
ELECTRIC SCOOTER PROJECT / SIMULATION OF PHARMACEUTICAL RESEARCH AND
DEVELOPMENT 11.4 REAL OPTIONS AND DECISION TREES 283 THE OPTION TO
EXPAND / THE OPTION TO ABANDON / PRODUCTION OPTIONS / TIMING OPTIONS
/MORE ON DECISION TREES /AN EXAMPLE: MAGNA CHARTER /PRO AND CON DECISION
TREES /DECISION TREES AND MONTE CARLO SIMULATION SUMMARY 294 FURTHER
READING 295 CONCEPT REVIEW QUESTIONS 295 QUIZ 295 PRACTICE QUESTIONS 296
CHALLENGE QUESTIONS 299 MINI-CASE: WALDO COUNTY 299 C H A P T E R 12
INVESTMENT, STRATEGY, AND ECONOMIC RENTS 302 12.1 LOOK FIRST TO MARKET
VALUES 303 THE CADILLAC AND THE MOVIE STAR / EXAMPLE: INVESTING IN A NEW
DEPARTMENT STORE / ANOTHER EXAMPLE: OPENING A GOLD MINE 12.2 ECONOMIC
RENTS AND COMPETITIVE ADVANTAGE 308 HOW ONE COMPANY AVOIDED A $100
MILLION MISTAKE 12.3 EXAMPLE: MARVIN ENTERPRISES DECIDES TO EXPLOIT A
NEW TECHNOLOGY 311 FORECASTING PRICES OFGARGLE BLASTERS /THE VALUE OF
MARVIN S NEIV EXPANSION /ALTERNATIVE EXPANSION PLANS / THE VALUE OF
MARVIN STOCK / THE LESSONS OF MARVIN ENTERPRISES SUMMARY 319 FURTHER
READING 319 CONCEPT REVIEW QUESTIONS 320 QUIZ 320 PRACTICE QUESTIONS 321
CHALLENGE QUESTIONS 323 MINI-CASE: ECSY-COLA 325 C H A P T E R 13 AGENCY
PROBLEMS, MANAGEMENT COMPENSATION, AND THE MEASUREMENT OF PERFORMANCE
327 13.1 INCENTIVES AND COMPENSATION 328 AGENCY PROBLEMS IN CAPITAL
BUDGETING /MONITORING / MANAGEMENT COMPENSATION 13.2 MEASURING AND
REWARDING PERFORMANCE: RESIDUAL INCOME AND EVA 333 PROS AND CONS OFEVA
13.3 BIASES IN ACCOUNTING MEASURES OF PERFORMANCE 337 EXAMPLE: MEASURING
THE PROFITABILITY OF THE NODHEAD SUPERMARKET / MEASURING ECONOMIC
PROFITABILITY / DO THE BIASES WASH OUT IN THE LONG RUN? / WHAT CAN WE DO
ABOUT BIASES IN ACCOUNTING PROFITABILITY MEASURES? /EARNINGS AND
EARNINGS TARGETS SUMMARY 345 FURTHER READING 346 CONCEPT REVIEW
QUESTIONS 347 QUIZ 347 PRACTICE QUESTIONS 348 CHALLENGE QUESTIONS 350 P
A R T F O U R FINANCING DECISIONS AND MARKET EFFICIENCY 351 C H A P T E
R 14 EFFICIENT MARKETS AND BEHAVIORAL FINANCE 352 14.1 WE ALWAYS COME
BACK TO NPV 353 DIFFERENCES BETWEEN INVESTMENT AND FINANCING DECISIONS
14.2 WHAT IS AN EFFICIENT MARKET? 355 A STARTLING DISCOVERY: PRICE
CHANGES ARE RANDOM / THREE FORMS OF MARKET EFFICIENCY / EFFICIENT
MARKETS: THE EVIDENCE 14.3 THE EVIDENCE AGAINST MARKET EFFICIENCY 363 DO
INVESTORS RESPOND SLOIVLY TO NEW INFORMATION? /ARE STOCK PRICES
DETERMINED BY FUNDAMENTALS? /THE DOT.COM BOOM AND RELATIVE EFFICIENCY
14.4 BEHAVIORAL FINANCE 369 LIMITS TO ARBITRAGE / BEHAVIORAL FINANCE AND
MARKET EFFICIENCY XXI CONTENTS 14.5 THE SIX LESSONS OF MARKET EFFICIENCY
372 LESSON 1: MARKETS HAVE NO MEMORY / LESSON 2: TRUST MARKET PRICES /
LESSON 3: READ THE ENTRAILS /LESSON 4: LIIERE ARE NO FINANCIAL ILLUSIONS
/ LESSON 5: THE DO-IT- YOURSELF ALTERNATIVE / LESSON 6: SEEN ONE STOCK,
SEEN THEM ALL / WHAT IF MARKETS ARE NOT EFFICIENT? IMPLICATIONS FOR THE
FINANCIAL MANAGER SUMMARY 378 FURTHER READING 379 CONCEPT REVIEW
QUESTIONS 380 QUIZ 380 PRACTICE QUESTIONS 381 CHALLENGE QUESTIONS 383 C
H A P T E R 15 AN OVERVIEW OF CORPORATE FINANCING 385 15.1 PATTERNS OF
CORPORATE FINANCING 386 DO FIRMS RELY TOO MUCH ON INTERNAL FUNDS? /HOW
MUCH DO FIRMS BORROW? 15.2 COMMON STOCK 390 OWNERSHIP OFTHE CORPORATION
/ VOTING PROCEDURES AND THE VALUE OF VOTES / EQUITY IN DISGUISE /
PREFERRED STOCK 15.3 DEBT 396 DEBT COMES IN MANY FORMS / A DEBT BY ANY
OTHER NAME / VARIETY S THE VERY SPIEE OFLIFE 15.4 FINANCIAL MARKETS AND
INSTITUTIONS 400 FINANCIAL INSTITUTIONS SUMMARY 402 FURTHER READING 403
WEB PROJECTS 404 CONCEPT REVIEW QUESTIONS 404 QUIZ 404 PRACTICE
QUESTIONS 405 CHALLENGE QUESTION 406 C H A P T E R 16 HOW CORPORATIONS
ISSUE SECURITIES 407 16.1 VENTURE CAPITAL 408 THE VENTURE CAPITAL MARKET
16.2 THE INITIAL PUBLIC OFFERING 412 ARRANGING AN INITIAL PUBLIC
OFFERING / THE SAELE OF MARVIN STOCK /THE UNDERWRITERS /COSTS OFA NEW
ISSUE / UNDERPRICING OFIPOS / HOT NEW-ISSUE PERIODS 16.3 OTHER NEW-ISSUE
PROCEDURES 422 TYPES OFAUCTION 16.4 SECURITY SALES BY PUBLIC COMPANIES
424 GENERAL CASH OFFERS / INTERNATIONAL SECURITY ISSUES / THE COSTS OFA
GENERAL CASH OFFER /MARKET REACTION TO STOCK ISSUES / RIGHTS ISSUES 16.5
PRIVATE PLACEMENTS AND PUBLIC ISSUES 430 SUMMARY 430 FURTHER READING 431
WEB PROJECT 432 CONCEPT REVIEW QUESTIONS 432 QUIZ 432 PRACTICE QUESTIONS
434 CHALLENGE QUESTIONS 435 APPENDIX: MARVIN S NEW-ISSUE PROSPECTUS 436
P A R T F I V E PAYOUT POLICY AND CAPITAL STRUCTURE 441 C H A P T E R 17
PAYOUT POLICY 442 17.1 THE CHOICE OF PAYOUT POLICY 443 17.2 HOW FIRMS
PAY DIVIDENDS AND REPURCHASE STOCK 444 HOW FIRMS REPURCHASE STOCK 17.3
HOW DO COMPANIES DECIDE ON THE PAYOUT? 446 17.4 THE INFORMATION IN
DIVIDENDS AND STOCK REPURCHASES 447 THE INFORMATION CONTENT OFSHARE
REPURCHASE 17.5 THE PAYOUT CONTROVERSY 450 DIVIDEND POLICY IS IRRELEVANT
IN PERFECT CAPITAL MARKETS / DIVIDEND IRRELEVANCE * AN ILLUSTRATION /
CALCULATING SHARE PRICE / STOCK REPURCHASE / STOCK REPURCHASE AND
VALUATION 17.6 THE RIGHTISTS 455 PAYOUT POLICY, INVESTMENT POLICY, AND
MANAGEMENT INCENTIVES 17.7 TAXES AND THE RADICAL LEFT 457 WHY PAY ANY
DIVIDENDS AT ALL? / EMPIRICAL EVIDENCE ON DIVIDENDS AND TAXES /THE
TAXATION OF DIVIDENDS AND CAPITAL GAINS 17.8 THE MIDDLE-OF-THE-ROADERS
461 ALTERNATIVE TAX SYSTEMS SUMMARY 464 FURTHER READING 465 CONCEPT
REVIEW QUESTIONS 466 QUIZ 466 PRACTICE QUESTIONS 467 CHALLENGE QUESTIONS
470 XXN CONTENTS C H A P T E R 18 DOES DEBT POLICY MATTER? 472 18.1 THE
EFFECT OF FINANCIAL LEVERAGE IN A COMPETITIVE TAX-FREE ECONOMY 473 ENTER
MODIGLIANI AND MILLER / THE LAW OF CONSERVATION OFVALUE I AN EXAMPLE OF
PROPOSITION 1 18.2 FINANCIAL RISK AND EXPECTED RETURNS 479 PROPOSITION 2
/ HOIV CHANGING CAPITAL STRUCTURE AFFECTS BETA 18.3 THE WEIGHTED-AVERAGE
COST OF CAPITAL 483 TWO WARNINGS /RATES OF RETURN ON LEVERED EQUITY *
THE TRADITIONAL POSITION / TODAY S UNSATISFIED CLIENTEIES ARE PROBABLY
INTERESTED IN EXOTIC SECURITIES /IMPERFECTIONS AND OPPORTUNITIES 18.4 A
FINAL WORD ON THE AFTER-TAX WEIGHTED-AVERAGE COST OF CAPITAL 488 UNION
PACIFIC S WACC SUMMARY 489 FURTHER READING 490 CONCEPT REVIEW QUESTIONS
491 QUIZ 491 PRACTICE QUESTIONS 493 CHALLENGE QUESTIONS 495 C H A P T E
R 19 HOW MUCH SHOULD A FIRM BORROW? 496 19.1 CORPORATE TAXES 497 HOW DO
INTEREST TAX SHIELDS CONTRIBUTE TO THE VALUE OF STOCKHOLDERS EQUITY?
/RECASTING MERCK S CAPITAL STRUCTURE I MM AND TAXES 19.2 CORPORATE AND
PERSONAL TAXES 501 19.3 COSTS OF FINANCIAL DISTRESS 503 BANKRUPTCY COSTS
/ EVIDENCE ON BANKRUPTCY COSTS / DIRECT VERSUS INDIRECT COSTS OF
BANKRUPTCY / TINANCIAL DISTRESS WITHOUT BANKRUPTCY /DEBT AND INCENTIVES
/ RISK SHIFTING: THE FIRST GAME /REFUSING TO CONTRIBUTE EQUITY CAPITAL:
THE SECOND GAME /AND THREE MORE GAMES, BRIEFLY I WHAT THE GAMES COST /
COSTS OF DISTRESS VARY IVITH TYPE OF ASSET /THE TRADE-OFF THEORY OF
CAPITAL STRUCTURE 19.4 THE PECKING ORDER OF FINANCING CHOICES 517 DEBT
AND EQUITY ISSUES IVITH ASYMMETRIE INFORMATION / IMPLICATIONS OFTHE
PECKING ORDER / THE TRADE-OFF THEORY VS. THE PECKING-ORDER THEORY * SOME
RECENT TESTS / THE BRIGHT SIDE AND THE DARK SIDE OF FINANCIAL SLACK
SUMMARY 522 FURTHER READING 524 CONCEPT REVIEW QUESTIONS 524 QUIZ 524
PRACTICE QUESTIONS 525 CHALLENGE QUESTIONS 528 C H A P T E R 20
FINANCING AND VALUATION 529 20.1 THE AFTER-TAX WEIGHTED-AVERAGE COST OF
CAPITAL 530 EXAMPLE: SANGRIA CORPORATION / REVIEW OF ASSUMPTIONS 20.2
VALUING BUSINESSES 533 VALUING RIO CORPORATION / ESTIMATING HORIZON
VALUE / WACC VS. THE FLOW-TO-EQUITY METHOD 20.3 USING WACC IN PRACTICE
538 SOME TRICKS OFTHE TRADE / MISTAKES PEOPLE MAKE IN USING THE
WEIGHTED-AVERAGE FORMULA / ADJUSTING WACC WHEN DEBT RATIOS OR BUSINESS
RISKS DIFFER / UNLEVERING AND RELEVERING BETAS / THE IMPORTANCE OF
RCBALANCING / THE MODIGLIANI-MILLER FORMULA, PLUS SOME FINAL ADVICE 20.4
ADJUSTED PRESENT VALUE 546 APVFOR THE PERPETUAL CRUSHER / OTHER
FINANCING SIDE EFFECTS /APVFOR BUSINESSES /APVFOR INTERNATIONAL
INVESTMENTS 20.5 YOUR QUESTIONS ANSWERED 550 SUMMARY 552 FURTHER READING
554 CONCEPT REVIEW QUESTIONS 554 QUIZ 554 PRACTICE QUESTIONS 555
CHALLENGE QUESTIONS 559 APPENDIX: DISCOUNTING SAFE, NOMINAL CASH FLOWS
559 P A R T S I X OPTIONS 563 C H A P T E R 21 UNDERSTANDING OPTIONS 564
21.1 CALLS, PUTS, AND SHARES 565 CALL OPTIONS AND POSITION DIAGRAMS /
PUT OPTIONS / SELLING CALLS, PITTS, AND SHARES / POSITION DIAGRAMS ARE
NOT PROFIT DIAGRAMS 21.2 FINANCIAL ALCHEMY WITH OPTIONS 569 SPOTTING THE
OPTION 21.3 WHAT DETERMINES OPTION VALUES? 576 RISK AND OPTION VALUES
SUMMARY 582 FURTHER READING 582 CONCEPT REVIEW QUESTIONS 582 XXIII
CONTENTS QUIZ 583 PRACTICE QUESTIONS 584 CHALLENGE QUESTIONS 586 C H A P
T E R 22 VALUING OPTIONS 588 22.1 A SIMPLE OPTION-VALUATION MODEL 589
WHY DISCOUNTED CASH FLOW WON T WORK FOR OPTIONS / CONSTRUCTING OPTION
EQUIVALENTS FRONT COMMON STOCKS AND BORROWING / VALUING THE GENENTECH
PUT OPTION 22.2 THE BINOMIAL METHOD FOR VALUING OPTIONS 593 EXAMPLE: THE
TWO-STAGE BINOMIAL METHOD / THE GENERAL BINOMIAL METHOD / THE BINOMIAL
METHOD AND DECISION TREES 22.3 THE BLACK-SCHOLES FORMULA 599 USING THE
BLACK-SCHOLES FORMULA /THE BLACK-SCHOLES FORMULA AND THE BINOMIAL METHOD
22.4 BLACK-SCHOLES IN ACTION 603 EXECUTIVE STOCK OPTIONS / WARRANTS /
PORTFOLIO INSURANCE / CALCULATING IMPLIED VOLATILITIES 22.5 OPTION
VALUES AT A GLANCE 606 22.6 THE OPTION MENAGERIE 608 SUMMARY 608 FURTHER
READING 609 CONCEPT REVIEW QUESTIONS 609 QUIZ 609 PRACTICE QUESTIONS 610
CHALLENGE QUESTIONS 613 MINI-CASE: BRUCE HONIBALL S INVENTION 613
APPENDIX: HOW DILUTION AFFECTS OPTION VALUE 615 C H A P T E R 23 REAL
OPTIONS 619 23.1 THE VALUE OF FOLLOW-ON INVESTMENT OPPORTUNITIES 620
QUESTIONS AND ANSIVERS ABOUT BLITZEN ? MARK II/OTHER EXPANSION OPTIONS
23.2 THE TIMING OPTION 624 VALUING THE MALTED HERRING OPTION / OPTIMAL
TIMING FOR REAL ESTATE DEVELOPMENT 23.3 THE ABANDONMENT OPTION 627 THE
ZIRCON SUBDUCTOR PROJECT / ABANDONMENT VALUE AND PROJECT LIFE /
TEMPORARY ABANDONMENT 23.4 FLEXIBLE PRODUCTION 632 23.5 AIRCRAFT
PURCHASE OPTIONS 634 23.6 A CONCEPTUAL PROBLEM? 636 PRACTICAL CHALLENGES
SUMMARY 638 FURTHER READING 638 CONCEPT REVIEW QUESTIONS 639 QUIZ 639
PRACTICE QUESTIONS 640 CHALLENGE QUESTIONS 642 P A R T S E V E N
DEBTFINANCING 645 C H A P T E R 24 CREDIT RISK AND THE VALUE OF
CORPORATE DEBT 646 24.1 YIELDS ON CORPORATE DEBT 647 WHAT DETERMINES THE
YIELD SPREAD? 24.2 THE OPTION TO DEFAULT 651 VALUING THE DEFAULT OPTION
/ VALUING GOVERNMENT LOAN GUARANTEES 24.3 BOND RATINGS AND THE
PROBABILITY OF DEFAULT 656 24.4 PREDICTING THE PROBABILITY OF DEFAULT
658 CREDIT SCORING /MARKET-BASED RISK MODELS 24.5 VALUE AT RISK 663
SUMMARY 664 FURTHER READING 665 CONCEPT REVIEW QUESTIONS 665 QUIZ 665
PRACTICE QUESTIONS 666 CHALLENGE QUESTIONS 666 C H A P T E R 25 THE MANY
DIFFERENT KINDS OF DEBT 667 25.1 DOMESTIC BONDS, FOREIGN BONDS, AND
EUROBONDS 668 25.2 THE BOND CONTRACT 669 INDENTURE, OR TRUST DEED /THE
BOND TERMS 25.3 SECURITY AND SENIORITY 671 ASSET-BACKED SECURITIES 25.4
REPAYMENT PROVISIONS 674 SINKING FUNDS / CALL PROVISIONS 25.5 DEBT
COVENANTS 676 25.6 CONVERTIBLE BONDS AND WARRANTS 678 THE VALUE OF A
CONVERTIBLE AT MATURITY /FORCING CONVERSION / WHY DO COMPANIES ISSUE
CONVERTIBLES? / VALUING CONVERTIBLE BONDS / A VARIATION ON CONVERTIBLE
BONDS: MANDATORY CONVERTIBLES /ANOTHER VARIATION ON CONVERTIBLE BONDS:
THE BOND-WARRANT PACKAGE XXIV CONTENTS 25.7 PRIVATE PLACEMENTS AND
PROJECT FINANCE 684 PROJECT FINANCE / PROJECT FINANCE * SOME COMMON
FEATURES / THE POLE OF PROJECT FINANCE 25.8 INNOVATION IN THE BOND
MARKET 688 SUMMARY 691 FURTHER READING 692 CONCEPT REVIEW QUESTIONS 692
QUIZ 692 PRACTICE QUESTIONS 694 CHALLENGE QUESTIONS 696 MINI-CASE: THE
SHOCKING DEMISE OF MR. THORNDIKE 697 C H A P T E R 26 LEASING 698 26.1
WHAT IS A LEASE? 698 26.2 WHY LEASE? 699 SENSIBLE REASONSFOR LEASING /
SOME DUBIOUS REASONS FOR LEASING 26.3 OPERATING LEASES 703 EXAMPLE OFAN
OPERATING LEASE / LEASE OR BUY? 26.4 VALUING FINANCIAL LEASES 706
EXAMPLE OFA FINANCIAL LEASE /WHO REALLY OWNS THE LEASED ASSET? /LEASING
AND THE INTERNAL REVENUE SERVICE / A FIRST PASS AT VALUING A LEASE
CONTRACT / THE STORY SO FAR 26.5 WHEN DO FINANCIAL LEASES PAY? 712
LEASING AROUND THE WORLD 26.6 LEVERAGED LEASES 713 SUMMARY 714 FURTHER
READING 715 CONCEPT REVIEW QUESTIONS 716 QUIZ 716 PRACTICE QUESTIONS 717
CHALLENGE QUESTIONS 719 P A R T E I G H T RISK MANAGEMENT T2A C H A P T
E R 27 MANAGING RISK 722 27.1 WHY MANAGE RISK? 722 REDUCING THE RISK
OFCASH SHORTFALLS OR FINANCIAL DISTRESS / AGENCY COSTS MAY BE MITIGATED
BY RISK MANAGEMENT / THE EVIDENCE ON RISK MANAGEMENT 27.2 INSURANCE 726
HOW BP CHANGED ITS INSURANCE STRATEGY 27.3 FORWARD AND FUTURES CONTRACTS
729 A SIMPLE FORWARD CONTRACT /FUTURES EXCHANGES / THE MECHANICS OF
FUTURES TRADING / TRADING AND PRICING FINANCIAL FUTURES CONTRACTS / SPOT
AND FUTURES PRICES * COMMODITIES / MORE ABOUT FORWARD CONTRACTS
/HOMEMADE FORWARD RATE CONTRACTS TIA SWAPS 736 INTEREST RATE SWAPS
/CURRENCY SWAPS / SWAPS 27.5 HOW TO SET UP A HEDGE 741 USING THEORY TO
SET UP THE HEDGE: AN EXAMPLE I OPTIONS, DELTAS, AND BETAS 27.6 IS
DERIVATIVE A FOUR-LETTER WORD? 744 SUMMARY 747 FURTHER READING 748
CONCEPT REVIEW QUESTIONS 748 QUIZ 749 PRACTICE QUESTIONS 750 CHALLENGE
QUESTIONS 754 C H A P T E R 28 MANAGING INTERNATIONAL RISKS 755 28.1 THE
FOREIGN EXCHANGE MARKET 755 28.2 SOME BASIC RELATIONSHIPS 757 INTEREST
RATES AND EXCHANGE RATES / THE FORWARD PREMIUM AND CHANGES IN SPOT RATES
/ CHANGES IN THE EXCHANGE RATE AND INFLATION RATES / INTEREST RATES AND
INFLATION RATES /IS LIFE REALLY THAT SIMPLE? 28.3 HEDGING CURRENCY RISK
767 TRANSACTION EXPOSURE AND ECONOMIC EXPOSURE / CURRENCY SPECULATION
28.4 EXCHANGE RISK AND INTERNATIONAL INVESTMENT DECISIONS 771 MORE ABOUT
THE COST OF CAPITAL 28.5 POLITICAL RISK 774 SUMMARY 776 FURTHER READING
777 WEB PROJECT 778 CONCEPT REVIEW QUESTIONS 778 QUIZ 778 PRACTICE
QUESTIONS 780 CHALLENGE QUESTIONS 782 MINI-CASE: EXACTA, S.A. 782
CONTENTS A R T N 1 N E FINANCIAL PLANNING AND THE MANAGEMENT OF WORKING
CAPITAL 785 C H A P T E R 29 FINANCIAL ANALYSIS AND PLANNING 786 29.1
29.2 29.3 29.4 29.5 29.6 FINANCIAL STATEMENTS 787 EXECUTIVE PAPER S
FINANCIAL STATEMENTS 787 THE BALANCE SHEET / THE INCOME STATEMENT
/SOURCES AND USES OF FUNDS MEASURING EXECUTIVE PAPER S FINANCIAL
CONDITION 792 HOW MUCH HAS EXECUTIVE PAPER BORROIVED? /HOW LIQUID IS
EXECUTIVE PAPER? /HOIV PRODUCTIVELY IS EXECUTIVE PAPER USING ITS ASSETS?
/HOW PROFITABLE IS EXECUTIVE PAPER? /HOW HIGHLY IS EXECUTIVE PAPER
VALUED BY INVESTORS? /THE DUPONT SYSTEM /INDUSTRY COMPARISONS FINANCIAL
PLANNING 804 FINANCIAL PLANNING MODELS 804 PITFALLS IN MODEL DESIGN /
THERE IS NO FINANCE IN FINANCIAL PLANNING MODELS GROWTH AND EXTERNAL
FINANCING 807 SUMMARY 808 FURTHER READING 809 WEB PROJECTS 810 CONCEPT
REVIEW QUESTIONS 810 QUIZ 810 PRACTICE QUESTIONS 813 CHALLENGE QUESTIONS
813 WEB PROJECTS 844 CONCEPT REVIEW QUESTIONS 845 QUIZ 845 PRACTICE
QUESTIONS 847 CHALLENGE QUESTIONS 849 C H A P T E R 31 SHORT-TERM
FINANCIAL PLANNING 851 31.1 LINKS BETWEEN LONG-TERM AND SHORT-TERM
FINANCING DECISIONS 852 31.2 TRACING CHANGES IN CASH AND WORKING CAPITAL
855 TRACING CHANGES IN NET WORKING CAPITAL / PROFITS AND CASH FLOW 31.3
CASH BUDGETING 859 PREPARING THE CASH BUDGET: INF LOW / PREPARING THE
CASH BUDGET: OUTFLOW 31.4 THE SHORT-TERM FINANCING PLAN 862 OPTIONSFOR
SHORT-TERM FINANCING/ DYNAMIC S FINANCING PLAN / EVALUATING THE PLAN IA
NOTE ON SHORT- TERM FINANCIAL PLANNING MODELS 31.5 SOURCES OF SHORT-TERM
BORROWING 865 BANK LOANS / COMMERCIAL PAPER /MEDLUM-TERM NOTES SUMMARY
872 FURTHER READING 874 WEB PROJECT 874 CONCEPT REVIEW QUESTIONS 874
QUIZ 875 PRACTICE QUESTIONS 876 CHALLENGE QUESTIONS 879 C H A P T E R 30
WORKING CAPITAL MANAGEMENT 819 P A R T T E N 30.1 30.2 30.3 30.4
INVENTORIES 820 CREDIT MANAGEMENT 823 TERMS OFSALE / THE PROMISE TO PAY
I CREDIT ANALYSIS / THE CREDIT DECISION / COLLECTION POLICY CASH 830 HOW
PURCHASES ARE PAID FOR / ELECTRONIC FUNDS TRANSFER / SPEEDING UP CHECK
COLLECTIONS /INTERNATIONAL CASH MANAGEMENT / PAYINGFOR BANK SERVICES
MARKETABLE SECURITIES 836 CALCULATING THE YIELD ON MONEY-MARKET
INVESTMENTS / YIELDS ON MONEY-MARKET INVESTMENTS / THE INTERNATIONAL
MONEY MARKET / MONEY-MARKET INSTRUMENTS SUMMARY 842 FURTHER READING 844
MERGERS, CORPORATE CONTROL, AND GOVERNANCE 881 C H A P T E R 32 MERGERS
882 32.1 SENSIBLE MOTIVES FOR MERGERS 882 ECONOMIES OF SCALE / ECONOMIES
OFVERTICAL INTEGRATION / COMPLEMENTARY RESOURCES / SURPLUS FUNDS /
ELIMINATING INEFFICIENCIES /INDUSTRY CONSOLIDATION 32.2 SOME DUBIOUS
REASONS FOR MERGERS 888 DIVERSIFIKATION /INCREASING EARNINGS PER SHARE:
THE BOOTSTRAP GAME / POWER FINANCING COSTS CONTENTS 32.3 ESTIMATING
MERGER GAINS AND COSTS 891 RIGHT AND WRONG WAYS TO ESTIMATE THE BENEFITS
OF MERGERS /MORE ON ESTIMATING COSTS * WHAT IFTHE TARGET S STOCK PRICE
ANTICIPATES THE MERGER? / ESTIMATING COST WHEN THE MERGER IS FINANCED BY
STOCK /ASYMMETRIE INFORMATION 32.4 THE MECHANICS OF A MERGER 896
MERGERS, ANTITRUST EAW, AND POPULAER OPPOSITION / THE FORM OF ACAUISITION
/ MERGER ACCOUNTING I SOME TAX CONSIDERATIONS 32.5 PROXY FIGHTS,
TAKEOVERS, AND THE MARKET FOR CORPORATE CONTROL 900 PROXY CONTESTS /
TAKEOVERS / ORACLE BIDSFOR PEOPLESOFT / TAKEOVER DEFENSES / WHO GAINS
MOST IN MERGERS? 32.6 MERGERS AND THE ECONOMY 907 MERGER WAVES /DO
MERGERS GENERATE NET BENEFITS? SUMMARY 909 FURTHER READING 909 CONCEPT
REVIEW QUESTIONS 910 QUIZ 910 PRACTICE QUESTIONS 911 CHALLENGE QUESTIONS
913 APPENDIX: CONGLOMERATE MERGERS AND VALUE ADDITIVITY 913 C H A P T E
R 33 CORPORATE RESTRUCTURING 916 33.1 LEVERAGED BUYOUTS 917 R/R NABISCO
/BARBARIANS AT THE GATE? /LEVERAGED RESTRUCTURINGS /LBOS AND LEVERAGED
RESTRUCTURINGS 33.2 FUSION AND FISSION IN CORPORATE FINANCE 921
SPIN-OFFS I CARVE-OUTS / ASSET SALES / PRIVATIZATION 33.3 PRIVATE EQUITY
927 PRIVATE-EQUITY PARTNERSHIPS /ARE PRIVATE-EQUITY FUNDS TODAY S
CONGLOMERATES? 33.4 BANKRUPTCY 933 IS CHAPTER 11 EFFICIENT? / WORKOUTS
/ALTERNATIVE BANKRUPTCY PROCEDURES SUMMARY 938 FURTHER READING 939
CONCEPT REVIEW QUESTIONS 940 QUIZ 940 PRACTICE QUESTIONS 941 C H A P T E
R 34 GOVERNANCE AND CORPORATE CONTROL AROUND THE WORLD 943 34.1
FINANCIAL MARKETS AND INSTITUTIONS 944 INVESTOR PROTECTION AND THE
DEVELOPMENT OF FINANCIAL MARKETS 34.2 OWNERSHIP, CONTROL, AND GOVERNANCE
948 OWNERSHIP AND CONTROL IN JAPAN / OWNERSHIP AND CONTROL IN GERMANY /
EUROPEAN BOARDS OFDIRECTORS / OWNERSHIP AND CONTROL IN OTHER COUNTRIES /
CONGLOMERATES REVISITED 34.3 DO THESE DIFFERENCES MATTER? 957 RISK AND
SHORT-TERMISM / GROIVTH INDUSTRIES AND DECLINING INDUSTRIES /
TRANSPARENCY AND GOVERNANCE SUMMARY 961 FURTHER READING 963 CONCEPT
REVIEW QUESTIONS 963 QUIZ 963 PRACTICE QUESTIONS 964 P A R T E L E V E N
CONCLUSION 966 C H A P T E R 35 CONCLUSION: WHAT WE DO AND DO NOT KNOW
ABOUT FINANCE 966 35.1 WHAT WE DO KNOW: THE SEVEN MOST IMPORTANT IDEAS
IN FINANCE 966 1. NET PRESENT VALUE / 2. THE CAPITAL ASSET PRICING MODEL
/3. EFFICIENT CAPITAL MARKETS /4. VALUE ADDITIVITY AND THE LAW OF
CONSERVATION OF VALUE / 5. CAPITAL STRUCTURE THEORY / 6. OPTION THEORY /
7. AGENCY THEORY 35.2 WHAT WE DO NOT KNOW: 10 UNSOLVED PROBLEMS IN
FINANCE 969 1. WHAT DETERMINES PROJECT RISK AND PRESENT VALUE? / 2. RISK
AND RETURN * WHAT HAVE WE MISSED? / 3. HOW IMPORTANT ARE THE EXCEPTIONS
TO THE EFFICIENT-MARKET THEORY? / 4. IS MANAGEMENT AN OFF-BALANCE-SHEET
LIABILITY? /5. HOW CAN WE EXPLAIN THE SUCCESS OFNEW SECURITIES AND NEW
MARKETS? / 6. HOW CAN WE RESOLVE THE PAYOUT CONTROVERSY? / 7. WHAT RISKS
SHOULD A FIRM TAKE? /8. WHAT IS THE VALUE OF LIQUIDITY? / 9. HOW CAN WE
EXPLAIN MERGER WAVES? 110. HOW CAN WE EXPLAIN INTERNATIONAL DIFFERENCES
IN FINANCIAL ARCHITECTURE? 35.3 A FINAL WORD 976 APPENDIX A PRESENT
VALUE TABLES A APPENDIX B ANSWERS TO QUIZZES B GLOSSARY G GLOBAL INDEX
1-1 GENERAL INDEX 1-7 XXVI1
|
| adam_txt |
PRINCIPLEOO/ CORPORATE FINANCE N I N T H E D I T I O N RICHARD A.
BREALEY PROFESSOR OF FINANCE LONDON BUSINESS SCHOOL STEWART C. MYERS
ROBERT C. MERTON (1970) PROFESSOR OF FINANCE SLOAN SCHOOL OF MANAGEMENT
MASSACHUSETTS INSTITUTE OF TECHNOLOGY FRANKLIN ALLEN NIPPON LIFE
PROFESSOR OF FINANCE THE WHARTON SCHOOL UNIVERSITY OF PENNSYLVANIA
MCGRAW-HIII IRWIN BOSTON BURRRIDGE, IL DUBUQUE, IA NEW YORK SAN
FRANCISCO ST. LOUIS BANGKOK BOGOTA CARACAS KUALA LUMPUR LISBON LONDON
MADRID MEXICO CITY MILAN MONTREAL NEW DELHI SANTIAGO SEOUL SINGAPORE
SYDNEY TAIPEI TORONTO P A R T O N E VALUE ~1 C H A P T E R 1 FINANCE AND
THE FINANCIAL MANAGER 2 1.1 WHAT IS A CORPORATION? 3 1.2 THE ROLE OF THE
FINANCIAL MANAGER 4 1.3 WHO IS THE FINANCIAL MANAGER? 6 1.4 SEPARATION
OF OWNERSHIP AND MANAGEMENT 7 1.5 TOPICS COVERED IN THIS BOOK 9 SUMMARY
10 FURTHER READING 10 CONCEPT REVIEW QUESTIONS 11 QUIZ 11 C H A P T E R
2 PRESENT VALUES, THE OBJECTIVES OF THE FIRM, AND CORPORATE GOVERNANCE
13 2.1 INTRODUCTION TO PRESENT VALUE 14 CALAILATING FIITARE VALUE AND
PRESENT VALUE /NET PRESENT VALUEIRISK AND PRESENT VALUE / PRESENT VALUES
AND RATES OF RETURN /THE OPPORTUNITY COST OF CAPITAL / A SOURCE
OFCONFUSION 2.2 FOUNDATIONS OF THE NET PRESENT VALUE RULE 19 HOW CAPITAL
MARKETS RECONCILE PREFERENCES FOR CURRENT VS, FUTURE CONSUMPTION IA
FUNDAMENTAL RESULT /OTHER CORPORATE GOALS 2.3 CORPORATE GOALS AND
CORPORATE GOVERNANCE 23 SHOULD MANAGERS LOOK AFTER THE INTERESTS OF
SHAREHOLDERS? /SHOULD FIRNIS BE MANAGED FOR SHAREHOLDERS OR ALL
STAKEHOLDERS? / ENRON, WORLDCOM, AND SOX SUMMARY 29 FURTHER READING 31
CONCEPT REVIEW QUESTIONS 31 QUIZ 31 PRACTICE QUESTIONS 32 CHALLENGE
QUESTION 34 C H A P T E R 3 HOW TO CALCULATE PRESENT VALUES 35 3.1
VALUING LONG-LIVED ASSETS 35 VALUING CASH FLOWS IN SEVERAL PERIODS / WHY
THE DISCOUNT FACTOR DECLINES AS FUTURITY INCREASES * AND A DIGRESSION ON
MONEY MACHINES / CALAILATING PVS AND NPVS 3.2 LOOKING FOR
SHORTCUTS*PERPETUITIES AND ANNUITIES 40 HOW TO VALUE PERPETUITIES / HOW
TO VALUE ANNUITIES / PV ANNUITIES: AN EXAMPLE/PV ANNUITIES: ANOTHER
EXAMPLE / PV ANNUITIES DUE /CALAILATING ANNUAL PAYMENTS: AN EXAMPLE
/FUTURE VALUE OF AN ANNUITY: AN EXAMPLE 3.3 MORE SHORTCUTS*GROWING
PERPETUITIES AND ANNUITIES 46 GROWING PERPETUITIES / GROWING ANNUITIES
3.4 COMPOUND INTEREST AND PRESENT VALUES 48 A NOTE ON COMPOUNDING
INTERVALS /CONTINUOUS COMPOUNDING SUMMARY 53 WEB PROJECTS 54 CONCEPT
REVIEW QUESTIONS 54 QUIZ 54 PRACTICE QUESTIONS 55 CHALLENGE QUESTIONS 58
XVLLL CONTENTS C H A P T E R 4 VALUING BONDS 59 4.1 USING THE PRESENT
VALUE FORMULA TO VALUE BONDS 60 A SHORT TRIP TO GERMANY TO VALUE A
GOVERNMENT BOND I BACK TO THE UNITED STATES: SEMIANNUAL COUPONS AND BOND
PRICES 4.2 HOW BOND PRICES VARY WITH INTEREST RATES 63 DURATION AND BOND
VOLATILITY /A CAUTIONARY NOTE 4.3 THE TERM STRUCTURE OF INTEREST RATES
67 THE YIELD TO MATURITY AND THE TERM STRUCTURE / MEASURING THE TERM
STRUCTURE 4.4 EXPLAINING THE TERM STRUCTURE 69 THE EXPECTATIONS THEORY /
INTRODUCING RISK / INFLATION AND TERM STRUCTURE 4.5 REAL AND NOMINAL
RATES OF INTEREST 72 INDEXED BONDS AND THE REAL RATE OF INTEREST /
INFLATION AND NOMINAL INTEREST RATES /'HOW WELL DOES FISHER'S THEORY
EXPLAIN INTEREST RATES? SUMMARY 78 FURTHER READING 79 WEB PROJECT 79
CONCEPT REVIEW QUESTIONS 80 QUIZ 80 PRACTICE QUESTIONS 82 CHALLENGE
QUESTIONS 84 C H A P T E R 5 THE VALUE OF COMMON STOCKS 85 5.1 HOW
COMMON STOCKS ARE TRADED 86 5.2 HOW COMMON STOCKS ARE VALUED 88 TODAY'S
PRICE IBUT WHAT DETERMINES NEXT YEAR'S PRICE? 5.3 ESTIMATING THE COST OF
EQUITY CAPITAL 92 USING THE DCF MODEL TO SET GAS AND ELECTRICITY PRICES
/ DANGERS LURK IN CONSTANT-GROWTH PORMULAS 5.4 THE LINK BETWEEN STOCK
PRICE AND EARNINGS PER SHARE 98 CALCULATING THE PRESENT VALUE OFGROWTH
OPPORTUNITIES FOR FLEDGLING ELECTRONICS I EXAMPLES OFGROWTH
OPPORTUNITIES 5.5 VALUING A BUSINESS BY DISCOUNTED CASH FLOW 102 VALUING
THE CONCATENATOR BUSINESS / VALUATION FORMAT ESTIMATING HORIZON VALUE IA
FURTHER REALITY CHECK SUMMARY 106 FURTHER READING 108 CONCEPT REVIEW
QUESTIONS 108 QUIZ 108 PRACTICE QUESTIONS 109 CHALLENGE QUESTIONS 112
MINI-CASE: REEBY SPORTS 113 C H A P T E R 6 WHY NET PRESENT VALUE LEADS
TO BETTER INVESTMENT DECISIONS THAN OTHER CRITERIA 115 6.1 A REVIEW OF
THE BASICS 116 NET PRESENT VALUE'S COMPETITORS / THREE POINTS TO
REMEMBER ABOUT NPV / NPV DEPENDS ON CASH FLOW, NOT ON BOOK RETURNS 6.2
PAYBACK 120 THE PAYBACK RULE 6.3 INTERNAL (OR DISCOUNTED-CASH-FLOW) RATE
OF RETURN 121 CALCULATING THE IRR / THE IRR RULE / PITFALL 1*LENDING OR
BORROWING? / PITF ALL 2* MULTIPLE RATES OF RETURN / PITFALL 3 * MUTUALLY
EXCLUSIVE PROJECTS /PITFALL 4 * WHAT HAPPENS WHEN WE CAN'T FINESSE THE
TERM STRUCTURE OF INTEREST RATES? /THE VERDICT ON IRR 6.4 CHOOSING
CAPITAL INVESTMENTS WHEN RESOURCES ARE LIMITED 131 AN EASY PROBLEM IN
CAPITAL RATIONING / USES OF CAPITAL RATIONING MODELS SUMMARY 134 FURTHER
READING 135 CONCEPT REVIEW QUESTIONS 136 QUIZ 136 PRACTICE QUESTIONS 137
CHALLENGE QUESTIONS 139 MINI-CASE: VEGETRON'S CFO CALLS AGAIN 140 C H A
P T E R 7 MAKING INVESTMENT DECISIONS WITH THE NET PRESENT VALUE RULE
142 7.1 APPLYING THE NET PRESENT VALUE RULE 143 ONLY CASH FLOW IS
RELEVANT / ESTIMATE CASH FLOWS ON AN INCREMENTAL BASIS I TREAT INFLATION
CONSISTENTLY 7.2 EXAMPLE*IM&C'S FERTILIZER PROJECT 147 SEPARATING
INVESTMENT AND FINANCING DECISIONS I INVESTMENTS IN WORKING CAPITAL / A
FURTHER NOTE ON DEPRECIATION IA FINAL COMMENT ON TAXES / PROJECT
ANALYSIS / CALCULATING NPV IN OTHER COUNTRIES AND GURRENDES 7.3
EQUIVALENT ANNUAL COSTS 155 INVESTING TO PRODUCE REFORMULATED GASOLINE
AT CALIFORNIA REFINERIES / CHOOSING BETWEEN LONG- AND SHORT-LIVED
EQUIPMENT / DECIDING WHEN TO REPLACE AN EXISTING MACHINE XIX CONTENTS
SUMMARY 160 CONCEPT REVIEW QUESTIONS 161 QUIZ 161 PRACTICE QUESTIONS 163
CHALLENGE QUESTIONS 167 MINI-CASE: NEW ECONOMY TRANSPORT (A) AND (B) 168
P A R T T W O RISK 171 C H A P T E R 8 INTRODUCTION TO RISK, RETURN, AND
THE OPPORTUNITY COST OF CAPITAL 172 8.1 OVER A CENTURY OF CAPITAL MARKET
HISTORY IN ONE EASY LESSON 172 ARITHMETIC AVERAGES AND COMPOUND ANNUAL
RETURNS / USING HISTORICAL EVIDENCE TO EVALUATE TODAY'S COST OF CAPITAL
I DIVIDEND YIELDS AND THE RISK PREMIUM 8.2 MEASURING PORTFOLIO RISK 180
VARIANCE AND STANDARD DEVIATION /MEASURING VARIABILITY / HOW
DIVERSIFICATION REDUCES RISK 8.3 CALCULATING PORTFOLIO RISK 189 GENERAL
FORMIDA FOR COMPUTING PORTFOLIO RISK / LIMITS TO DIVERSIFICATION 8.4 HOW
INDIVIDUAL SECURITIES AFFECT PORTFOLIO RISK 193 MARKET RISK 7S MEASURED
BY BETA / WHY SECURITY BETAS DETERMINE PORTFOLIO RISK 8.5
DIVERSIFICATION AND VALUE ADDITIVITY 197 SUMMARY 198 FURTHER READING 199
CONCEPT REVIEW QUESTIONS 199 QUIZ 200 PRACTICE QUESTIONS 201 CHALLENGE
QUESTIONS 204 C H A P T E R 9 RISK AND RETURN 206 9.1 HARRY MARKOWITZ
AND THE BIRTH OF PORTFOLIO THEORY 206 COMBINING STOCKS INTO PORTFOLIOS /
WE INTRODUCE BORROIVING AND LENDING 9.2 THE RELATIONSHIP BETWEEN RISK
AND RETURN 213 SOME ESTIMATES OFEXPECTED RETURNS / REVIEW OF THE CAPITAL
ASSET PRICING MODEL / WLMT IFA STOCK DID NOT HIE ON THE SECURITY MARKET
LINE? 9.3 VALIDITY AND ROLE OF THE CAPITAL ASSET PRICING MODEL 217 TESTS
OF THE CAPITAL ASSET PRICING MODEL / ASSUMPTIONS BEHIND THE CAPITAL
ASSET PRICING MODEL 9.4 SOME ALTERNATIVE THEORIES 222 CONSUMPTION BETAS
VERSUS MARKET BETAS /ARBITRAGE PRICING THEORY / A COMPARISON OFTHE
CAPITAL ASSET PRICING MODEL AND ARBITRAGE PRICING THEORY / THE
THREE-FACTOR MODEL SUMMARY 227 FURTHER READING 228 CONCEPT REVIEW
QUESTIONS 229 QUIZ 229 PRACTICE QUESTIONS 231 CHALLENGE QUESTIONS 235
MINI-CASE: JOHN AND MARSHA ON PORTFOLIO SELECTION 236 C H A P T E R 10
CAPITAL BUDGETING AND RISK 238 10.1 COMPANY AND PROJECT COSTS OF CAPITAL
239 PERFECT PIICH AND THE COST OF CAPITAL / DEBT AND THE COMPANY COST OF
CAPITAL 10.2 MEASURING THE COST OF EQUITY 242 ESTIMATING BETA / THE
EXPECTED RETURN ON UNION PACIFIC CORPORATION 'S COMMON STOCK 10.3
SETTING DISCOUNT RATES WHEN YOU DON'T HAVE A BETA 246 AVOID FUDGE
FACTORS IN DISCOUNT RATES / WHAT DETERMINES ASSET BETAS? 10.4 CERTAINTY
EQUIVALENTS*ANOTHER WAY TO ADJUST FOR RISK 250 VALUATION BY CERTAINTY
EQUIVALENTS / WHEN TO USE A SINGLE RISK-ADJUSTED DISCOUNT RATE FOR
LONG-LIVED ASSETS / A COMMON MISTAKE / WHEN YOU CANNOT USE A SINGLE
RISK-ADJUSTED DISCOUNT RATE FOR LONG- LIVED ASSETS 10.5 DISCOUNT RATES
FOR INTERNATIONAL PROJECTS 255 FOREIGN INVESTMENTS ARE NOT ALWAYS
RISKIER /FOREIGN INVESTMENT IN THE UNITED STATES /DO SOME COUNTRIES HAVE
A TOWER COST OF CAPITAL? SUMMARY 258 FURTHER READING 259 CONCEPT REVIEW
QUESTIONS 259 QUIZ 260 PRACTICE QUESTIONS 260 CHALLENGE QUESTIONS 264
MINI-CASE: THE JONES FAMILY, INCORPORATED 264 XX CONTENTS P A R T T H R
E E BEST PRACTICES IN CAPITAL BUDGETING 267 C H A P T E R 11 PROJECT
ANALYSIS 268 11.1 THE CAPITAL INVESTMENT PROCESS 269 PROJECT
AUTHORIZATIONS * AND THE PROBLEM OFBIASED FORECASTS / POSTAUDITS 11.2
SENSITIVITY ANALYSIS 271 VALUE OF'INFORMATION / LIMITS TO SENSITIVITY
ANALYSIS / SCENARIO ANALYSIS / BREAK-EVEN ANALYSIS / OPERATING LEVERAGE
AND BREAK-EVEN POINTS 11.3 MONTE CARLO SIMULATION 278 SIMULATING THE
ELECTRIC SCOOTER PROJECT / SIMULATION OF PHARMACEUTICAL RESEARCH AND
DEVELOPMENT 11.4 REAL OPTIONS AND DECISION TREES 283 THE OPTION TO
EXPAND / THE OPTION TO ABANDON / PRODUCTION OPTIONS / TIMING OPTIONS
/MORE ON DECISION TREES /AN EXAMPLE: MAGNA CHARTER /PRO AND CON DECISION
TREES /DECISION TREES AND MONTE CARLO SIMULATION SUMMARY 294 FURTHER
READING 295 CONCEPT REVIEW QUESTIONS 295 QUIZ 295 PRACTICE QUESTIONS 296
CHALLENGE QUESTIONS 299 MINI-CASE: WALDO COUNTY 299 C H A P T E R 12
INVESTMENT, STRATEGY, AND ECONOMIC RENTS 302 12.1 LOOK FIRST TO MARKET
VALUES 303 THE CADILLAC AND THE MOVIE STAR / EXAMPLE: INVESTING IN A NEW
DEPARTMENT STORE / ANOTHER EXAMPLE: OPENING A GOLD MINE 12.2 ECONOMIC
RENTS AND COMPETITIVE ADVANTAGE 308 HOW ONE COMPANY AVOIDED A $100
MILLION MISTAKE 12.3 EXAMPLE: MARVIN ENTERPRISES DECIDES TO EXPLOIT A
NEW TECHNOLOGY 311 FORECASTING PRICES OFGARGLE BLASTERS /THE VALUE OF
MARVIN'S NEIV EXPANSION /ALTERNATIVE EXPANSION PLANS / THE VALUE OF
MARVIN STOCK / THE LESSONS OF MARVIN ENTERPRISES SUMMARY 319 FURTHER
READING 319 CONCEPT REVIEW QUESTIONS 320 QUIZ 320 PRACTICE QUESTIONS 321
CHALLENGE QUESTIONS 323 MINI-CASE: ECSY-COLA 325 C H A P T E R 13 AGENCY
PROBLEMS, MANAGEMENT COMPENSATION, AND THE MEASUREMENT OF PERFORMANCE
327 13.1 INCENTIVES AND COMPENSATION 328 AGENCY PROBLEMS IN CAPITAL
BUDGETING /MONITORING / MANAGEMENT COMPENSATION 13.2 MEASURING AND
REWARDING PERFORMANCE: RESIDUAL INCOME AND EVA 333 PROS AND CONS OFEVA
13.3 BIASES IN ACCOUNTING MEASURES OF PERFORMANCE 337 EXAMPLE: MEASURING
THE PROFITABILITY OF THE NODHEAD SUPERMARKET / MEASURING ECONOMIC
PROFITABILITY / DO THE BIASES WASH OUT IN THE LONG RUN? / WHAT CAN WE DO
ABOUT BIASES IN ACCOUNTING PROFITABILITY MEASURES? /EARNINGS AND
EARNINGS TARGETS SUMMARY 345 FURTHER READING 346 CONCEPT REVIEW
QUESTIONS 347 QUIZ 347 PRACTICE QUESTIONS 348 CHALLENGE QUESTIONS 350 P
A R T F O U R FINANCING DECISIONS AND MARKET EFFICIENCY 351 C H A P T E
R 14 EFFICIENT MARKETS AND BEHAVIORAL FINANCE 352 14.1 WE ALWAYS COME
BACK TO NPV 353 DIFFERENCES BETWEEN INVESTMENT AND FINANCING DECISIONS
14.2 WHAT IS AN EFFICIENT MARKET? 355 A STARTLING DISCOVERY: PRICE
CHANGES ARE RANDOM / THREE FORMS OF MARKET EFFICIENCY / EFFICIENT
MARKETS: THE EVIDENCE 14.3 THE EVIDENCE AGAINST MARKET EFFICIENCY 363 DO
INVESTORS RESPOND SLOIVLY TO NEW INFORMATION? /ARE STOCK PRICES
DETERMINED BY FUNDAMENTALS? /THE DOT.COM BOOM AND RELATIVE EFFICIENCY
14.4 BEHAVIORAL FINANCE 369 LIMITS TO ARBITRAGE / BEHAVIORAL FINANCE AND
MARKET EFFICIENCY XXI CONTENTS 14.5 THE SIX LESSONS OF MARKET EFFICIENCY
372 LESSON 1: MARKETS HAVE NO MEMORY / LESSON 2: TRUST MARKET PRICES /
LESSON 3: READ THE ENTRAILS /LESSON 4: LIIERE ARE NO FINANCIAL ILLUSIONS
/ LESSON 5: THE DO-IT- YOURSELF ALTERNATIVE / LESSON 6: SEEN ONE STOCK,
SEEN THEM ALL / WHAT IF MARKETS ARE NOT EFFICIENT? IMPLICATIONS FOR THE
FINANCIAL MANAGER SUMMARY 378 FURTHER READING 379 CONCEPT REVIEW
QUESTIONS 380 QUIZ 380 PRACTICE QUESTIONS 381 CHALLENGE QUESTIONS 383 C
H A P T E R 15 AN OVERVIEW OF CORPORATE FINANCING 385 15.1 PATTERNS OF
CORPORATE FINANCING 386 DO FIRMS RELY TOO MUCH ON INTERNAL FUNDS? /HOW
MUCH DO FIRMS BORROW? 15.2 COMMON STOCK 390 OWNERSHIP OFTHE CORPORATION
/ VOTING PROCEDURES AND THE VALUE OF VOTES / EQUITY IN DISGUISE /
PREFERRED STOCK 15.3 DEBT 396 DEBT COMES IN MANY FORMS / A DEBT BY ANY
OTHER NAME / VARIETY'S THE VERY SPIEE OFLIFE 15.4 FINANCIAL MARKETS AND
INSTITUTIONS 400 FINANCIAL INSTITUTIONS SUMMARY 402 FURTHER READING 403
WEB PROJECTS 404 CONCEPT REVIEW QUESTIONS 404 QUIZ 404 PRACTICE
QUESTIONS 405 CHALLENGE QUESTION 406 C H A P T E R 16 HOW CORPORATIONS
ISSUE SECURITIES 407 16.1 VENTURE CAPITAL 408 THE VENTURE CAPITAL MARKET
16.2 THE INITIAL PUBLIC OFFERING 412 ARRANGING AN INITIAL PUBLIC
OFFERING / THE SAELE OF MARVIN STOCK /THE UNDERWRITERS /COSTS OFA NEW
ISSUE / UNDERPRICING OFIPOS / HOT NEW-ISSUE PERIODS 16.3 OTHER NEW-ISSUE
PROCEDURES 422 TYPES OFAUCTION 16.4 SECURITY SALES BY PUBLIC COMPANIES
424 GENERAL CASH OFFERS / INTERNATIONAL SECURITY ISSUES / THE COSTS OFA
GENERAL CASH OFFER /MARKET REACTION TO STOCK ISSUES / RIGHTS ISSUES 16.5
PRIVATE PLACEMENTS AND PUBLIC ISSUES 430 SUMMARY 430 FURTHER READING 431
WEB PROJECT 432 CONCEPT REVIEW QUESTIONS 432 QUIZ 432 PRACTICE QUESTIONS
434 CHALLENGE QUESTIONS 435 APPENDIX: MARVIN'S NEW-ISSUE PROSPECTUS 436
P A R T F I V E PAYOUT POLICY AND CAPITAL STRUCTURE 441 C H A P T E R 17
PAYOUT POLICY 442 17.1 THE CHOICE OF PAYOUT POLICY 443 17.2 HOW FIRMS
PAY DIVIDENDS AND REPURCHASE STOCK 444 HOW FIRMS REPURCHASE STOCK 17.3
HOW DO COMPANIES DECIDE ON THE PAYOUT? 446 17.4 THE INFORMATION IN
DIVIDENDS AND STOCK REPURCHASES 447 THE INFORMATION CONTENT OFSHARE
REPURCHASE 17.5 THE PAYOUT CONTROVERSY 450 DIVIDEND POLICY IS IRRELEVANT
IN PERFECT CAPITAL MARKETS / DIVIDEND IRRELEVANCE * AN ILLUSTRATION /
CALCULATING SHARE PRICE / STOCK REPURCHASE / STOCK REPURCHASE AND
VALUATION 17.6 THE RIGHTISTS 455 PAYOUT POLICY, INVESTMENT POLICY, AND
MANAGEMENT INCENTIVES 17.7 TAXES AND THE RADICAL LEFT 457 WHY PAY ANY
DIVIDENDS AT ALL? / EMPIRICAL EVIDENCE ON DIVIDENDS AND TAXES /THE
TAXATION OF DIVIDENDS AND CAPITAL GAINS 17.8 THE MIDDLE-OF-THE-ROADERS
461 ALTERNATIVE TAX SYSTEMS SUMMARY 464 FURTHER READING 465 CONCEPT
REVIEW QUESTIONS 466 QUIZ 466 PRACTICE QUESTIONS 467 CHALLENGE QUESTIONS
470 XXN CONTENTS C H A P T E R 18 DOES DEBT POLICY MATTER? 472 18.1 THE
EFFECT OF FINANCIAL LEVERAGE IN A COMPETITIVE TAX-FREE ECONOMY 473 ENTER
MODIGLIANI AND MILLER / THE LAW OF CONSERVATION OFVALUE I AN EXAMPLE OF
PROPOSITION 1 18.2 FINANCIAL RISK AND EXPECTED RETURNS 479 PROPOSITION 2
/ HOIV CHANGING CAPITAL STRUCTURE AFFECTS BETA 18.3 THE WEIGHTED-AVERAGE
COST OF CAPITAL 483 TWO WARNINGS /RATES OF RETURN ON LEVERED EQUITY *
THE TRADITIONAL POSITION / TODAY'S UNSATISFIED CLIENTEIES ARE PROBABLY
INTERESTED IN EXOTIC SECURITIES /IMPERFECTIONS AND OPPORTUNITIES 18.4 A
FINAL WORD ON THE AFTER-TAX WEIGHTED-AVERAGE COST OF CAPITAL 488 UNION
PACIFIC'S WACC SUMMARY 489 FURTHER READING 490 CONCEPT REVIEW QUESTIONS
491 QUIZ 491 PRACTICE QUESTIONS 493 CHALLENGE QUESTIONS 495 C H A P T E
R 19 HOW MUCH SHOULD A FIRM BORROW? 496 19.1 CORPORATE TAXES 497 HOW DO
INTEREST TAX SHIELDS CONTRIBUTE TO THE VALUE OF STOCKHOLDERS' EQUITY?
/RECASTING MERCK'S CAPITAL STRUCTURE I MM AND TAXES 19.2 CORPORATE AND
PERSONAL TAXES 501 19.3 COSTS OF FINANCIAL DISTRESS 503 BANKRUPTCY COSTS
/ EVIDENCE ON BANKRUPTCY COSTS / DIRECT VERSUS INDIRECT COSTS OF
BANKRUPTCY / TINANCIAL DISTRESS WITHOUT BANKRUPTCY /DEBT AND INCENTIVES
/ RISK SHIFTING: THE FIRST GAME /REFUSING TO CONTRIBUTE EQUITY CAPITAL:
THE SECOND GAME /AND THREE MORE GAMES, BRIEFLY I WHAT THE GAMES COST /
COSTS OF DISTRESS VARY IVITH TYPE OF ASSET /THE TRADE-OFF THEORY OF
CAPITAL STRUCTURE 19.4 THE PECKING ORDER OF FINANCING CHOICES 517 DEBT
AND EQUITY ISSUES IVITH ASYMMETRIE INFORMATION / IMPLICATIONS OFTHE
PECKING ORDER / THE TRADE-OFF THEORY VS. THE PECKING-ORDER THEORY * SOME
RECENT TESTS / THE BRIGHT SIDE AND THE DARK SIDE OF FINANCIAL SLACK
SUMMARY 522 FURTHER READING 524 CONCEPT REVIEW QUESTIONS 524 QUIZ 524
PRACTICE QUESTIONS 525 CHALLENGE QUESTIONS 528 C H A P T E R 20
FINANCING AND VALUATION 529 20.1 THE AFTER-TAX WEIGHTED-AVERAGE COST OF
CAPITAL 530 EXAMPLE: SANGRIA CORPORATION / REVIEW OF ASSUMPTIONS 20.2
VALUING BUSINESSES 533 VALUING RIO CORPORATION / ESTIMATING HORIZON
VALUE / WACC VS. THE FLOW-TO-EQUITY METHOD 20.3 USING WACC IN PRACTICE
538 SOME TRICKS OFTHE TRADE / MISTAKES PEOPLE MAKE IN USING THE
WEIGHTED-AVERAGE FORMULA / ADJUSTING WACC WHEN DEBT RATIOS OR BUSINESS
RISKS DIFFER / UNLEVERING AND RELEVERING BETAS / THE IMPORTANCE OF
RCBALANCING / THE MODIGLIANI-MILLER FORMULA, PLUS SOME FINAL ADVICE 20.4
ADJUSTED PRESENT VALUE 546 APVFOR THE PERPETUAL CRUSHER / OTHER
FINANCING SIDE EFFECTS /APVFOR BUSINESSES /APVFOR INTERNATIONAL
INVESTMENTS 20.5 YOUR QUESTIONS ANSWERED 550 SUMMARY 552 FURTHER READING
554 CONCEPT REVIEW QUESTIONS 554 QUIZ 554 PRACTICE QUESTIONS 555
CHALLENGE QUESTIONS 559 APPENDIX: DISCOUNTING SAFE, NOMINAL CASH FLOWS
559 P A R T S I X OPTIONS 563 C H A P T E R 21 UNDERSTANDING OPTIONS 564
21.1 CALLS, PUTS, AND SHARES 565 CALL OPTIONS AND POSITION DIAGRAMS /
PUT OPTIONS / SELLING CALLS, PITTS, AND SHARES / POSITION DIAGRAMS ARE
NOT PROFIT DIAGRAMS 21.2 FINANCIAL ALCHEMY WITH OPTIONS 569 SPOTTING THE
OPTION 21.3 WHAT DETERMINES OPTION VALUES? 576 RISK AND OPTION VALUES
SUMMARY 582 FURTHER READING 582 CONCEPT REVIEW QUESTIONS 582 XXIII
CONTENTS QUIZ 583 PRACTICE QUESTIONS 584 CHALLENGE QUESTIONS 586 C H A P
T E R 22 VALUING OPTIONS 588 22.1 A SIMPLE OPTION-VALUATION MODEL 589
WHY DISCOUNTED CASH FLOW WON'T WORK FOR OPTIONS / CONSTRUCTING OPTION
EQUIVALENTS FRONT COMMON STOCKS AND BORROWING / VALUING THE GENENTECH
PUT OPTION 22.2 THE BINOMIAL METHOD FOR VALUING OPTIONS 593 EXAMPLE: THE
TWO-STAGE BINOMIAL METHOD / THE GENERAL BINOMIAL METHOD / THE BINOMIAL
METHOD AND DECISION TREES 22.3 THE BLACK-SCHOLES FORMULA 599 USING THE
BLACK-SCHOLES FORMULA /THE BLACK-SCHOLES FORMULA AND THE BINOMIAL METHOD
22.4 BLACK-SCHOLES IN ACTION 603 EXECUTIVE STOCK OPTIONS / WARRANTS /
PORTFOLIO INSURANCE / CALCULATING IMPLIED VOLATILITIES 22.5 OPTION
VALUES AT A GLANCE 606 22.6 THE OPTION MENAGERIE 608 SUMMARY 608 FURTHER
READING 609 CONCEPT REVIEW QUESTIONS 609 QUIZ 609 PRACTICE QUESTIONS 610
CHALLENGE QUESTIONS 613 MINI-CASE: BRUCE HONIBALL'S INVENTION 613
APPENDIX: HOW DILUTION AFFECTS OPTION VALUE 615 C H A P T E R 23 REAL
OPTIONS 619 23.1 THE VALUE OF FOLLOW-ON INVESTMENT OPPORTUNITIES 620
QUESTIONS AND ANSIVERS ABOUT BLITZEN'? MARK II/OTHER EXPANSION OPTIONS
23.2 THE TIMING OPTION 624 VALUING THE MALTED HERRING OPTION / OPTIMAL
TIMING FOR REAL ESTATE DEVELOPMENT 23.3 THE ABANDONMENT OPTION 627 THE
ZIRCON SUBDUCTOR PROJECT / ABANDONMENT VALUE AND PROJECT LIFE /
TEMPORARY ABANDONMENT 23.4 FLEXIBLE PRODUCTION 632 23.5 AIRCRAFT
PURCHASE OPTIONS 634 23.6 A CONCEPTUAL PROBLEM? 636 PRACTICAL CHALLENGES
SUMMARY 638 FURTHER READING 638 CONCEPT REVIEW QUESTIONS 639 QUIZ 639
PRACTICE QUESTIONS 640 CHALLENGE QUESTIONS 642 P A R T S E V E N
DEBTFINANCING 645 C H A P T E R 24 CREDIT RISK AND THE VALUE OF
CORPORATE DEBT 646 24.1 YIELDS ON CORPORATE DEBT 647 WHAT DETERMINES THE
YIELD SPREAD? 24.2 THE OPTION TO DEFAULT 651 VALUING THE DEFAULT OPTION
/ VALUING GOVERNMENT LOAN GUARANTEES 24.3 BOND RATINGS AND THE
PROBABILITY OF DEFAULT 656 24.4 PREDICTING THE PROBABILITY OF DEFAULT
658 CREDIT SCORING /MARKET-BASED RISK MODELS 24.5 VALUE AT RISK 663
SUMMARY 664 FURTHER READING 665 CONCEPT REVIEW QUESTIONS 665 QUIZ 665
PRACTICE QUESTIONS 666 CHALLENGE QUESTIONS 666 C H A P T E R 25 THE MANY
DIFFERENT KINDS OF DEBT 667 25.1 DOMESTIC BONDS, FOREIGN BONDS, AND
EUROBONDS 668 25.2 THE BOND CONTRACT 669 INDENTURE, OR TRUST DEED /THE
BOND TERMS 25.3 SECURITY AND SENIORITY 671 ASSET-BACKED SECURITIES 25.4
REPAYMENT PROVISIONS 674 SINKING FUNDS / CALL PROVISIONS 25.5 DEBT
COVENANTS 676 25.6 CONVERTIBLE BONDS AND WARRANTS 678 THE VALUE OF A
CONVERTIBLE AT MATURITY /FORCING CONVERSION / WHY DO COMPANIES ISSUE
CONVERTIBLES? / VALUING CONVERTIBLE BONDS / A VARIATION ON CONVERTIBLE
BONDS: MANDATORY CONVERTIBLES /ANOTHER VARIATION ON CONVERTIBLE BONDS:
THE BOND-WARRANT PACKAGE XXIV CONTENTS 25.7 PRIVATE PLACEMENTS AND
PROJECT FINANCE 684 PROJECT FINANCE / PROJECT FINANCE * SOME COMMON
FEATURES / THE POLE OF PROJECT FINANCE 25.8 INNOVATION IN THE BOND
MARKET 688 SUMMARY 691 FURTHER READING 692 CONCEPT REVIEW QUESTIONS 692
QUIZ 692 PRACTICE QUESTIONS 694 CHALLENGE QUESTIONS 696 MINI-CASE: THE
SHOCKING DEMISE OF MR. THORNDIKE 697 C H A P T E R 26 LEASING 698 26.1
WHAT IS A LEASE? 698 26.2 WHY LEASE? 699 SENSIBLE REASONSFOR LEASING /
SOME DUBIOUS REASONS FOR LEASING 26.3 OPERATING LEASES 703 EXAMPLE OFAN
OPERATING LEASE / LEASE OR BUY? 26.4 VALUING FINANCIAL LEASES 706
EXAMPLE OFA FINANCIAL LEASE /WHO REALLY OWNS THE LEASED ASSET? /LEASING
AND THE INTERNAL REVENUE SERVICE / A FIRST PASS AT VALUING A LEASE
CONTRACT / THE STORY SO FAR 26.5 WHEN DO FINANCIAL LEASES PAY? 712
LEASING AROUND THE WORLD 26.6 LEVERAGED LEASES 713 SUMMARY 714 FURTHER
READING 715 CONCEPT REVIEW QUESTIONS 716 QUIZ 716 PRACTICE QUESTIONS 717
CHALLENGE QUESTIONS 719 P A R T E I G H T RISK MANAGEMENT T2A C H A P T
E R 27 MANAGING RISK 722 27.1 WHY MANAGE RISK? 722 REDUCING THE RISK
OFCASH SHORTFALLS OR FINANCIAL DISTRESS / AGENCY COSTS MAY BE MITIGATED
BY RISK MANAGEMENT / THE EVIDENCE ON RISK MANAGEMENT 27.2 INSURANCE 726
HOW BP CHANGED ITS INSURANCE STRATEGY 27.3 FORWARD AND FUTURES CONTRACTS
729 A SIMPLE FORWARD CONTRACT /FUTURES EXCHANGES / THE MECHANICS OF
FUTURES TRADING / TRADING AND PRICING FINANCIAL FUTURES CONTRACTS / SPOT
AND FUTURES PRICES * COMMODITIES /' MORE ABOUT FORWARD CONTRACTS
/HOMEMADE FORWARD RATE CONTRACTS TIA SWAPS 736 INTEREST RATE SWAPS
/CURRENCY SWAPS / SWAPS 27.5 HOW TO SET UP A HEDGE 741 USING THEORY TO
SET UP THE HEDGE: AN EXAMPLE I OPTIONS, DELTAS, AND BETAS 27.6 IS
"DERIVATIVE" A FOUR-LETTER WORD? 744 SUMMARY 747 FURTHER READING 748
CONCEPT REVIEW QUESTIONS 748 QUIZ 749 PRACTICE QUESTIONS 750 CHALLENGE
QUESTIONS 754 C H A P T E R 28 MANAGING INTERNATIONAL RISKS 755 28.1 THE
FOREIGN EXCHANGE MARKET 755 28.2 SOME BASIC RELATIONSHIPS 757 INTEREST
RATES AND EXCHANGE RATES / THE FORWARD PREMIUM AND CHANGES IN SPOT RATES
/ CHANGES IN THE EXCHANGE RATE AND INFLATION RATES / INTEREST RATES AND
INFLATION RATES /IS LIFE REALLY THAT SIMPLE? 28.3 HEDGING CURRENCY RISK
767 TRANSACTION EXPOSURE AND ECONOMIC EXPOSURE / CURRENCY SPECULATION
28.4 EXCHANGE RISK AND INTERNATIONAL INVESTMENT DECISIONS 771 MORE ABOUT
THE COST OF CAPITAL 28.5 POLITICAL RISK 774 SUMMARY 776 FURTHER READING
777 WEB PROJECT 778 CONCEPT REVIEW QUESTIONS 778 QUIZ 778 PRACTICE
QUESTIONS 780 CHALLENGE QUESTIONS 782 MINI-CASE: EXACTA, S.A. 782
CONTENTS A R T N 1 N E FINANCIAL PLANNING AND THE MANAGEMENT OF WORKING
CAPITAL 785 C H A P T E R 29 FINANCIAL ANALYSIS AND PLANNING 786 29.1
29.2 29.3 29.4 29.5 29.6 FINANCIAL STATEMENTS 787 EXECUTIVE PAPER'S
FINANCIAL STATEMENTS 787 THE BALANCE SHEET / THE INCOME STATEMENT
/SOURCES AND USES OF FUNDS MEASURING EXECUTIVE PAPER'S FINANCIAL
CONDITION 792 HOW MUCH HAS EXECUTIVE PAPER BORROIVED? /HOW LIQUID IS
EXECUTIVE PAPER? /HOIV PRODUCTIVELY IS EXECUTIVE PAPER USING ITS ASSETS?
/HOW PROFITABLE IS EXECUTIVE PAPER? /HOW HIGHLY IS EXECUTIVE PAPER
VALUED BY INVESTORS? /THE DUPONT SYSTEM /INDUSTRY COMPARISONS FINANCIAL
PLANNING 804 FINANCIAL PLANNING MODELS 804 PITFALLS IN MODEL DESIGN /
THERE IS NO FINANCE IN FINANCIAL PLANNING MODELS GROWTH AND EXTERNAL
FINANCING 807 SUMMARY 808 FURTHER READING 809 WEB PROJECTS 810 CONCEPT
REVIEW QUESTIONS 810 QUIZ 810 PRACTICE QUESTIONS 813 CHALLENGE QUESTIONS
813 WEB PROJECTS 844 CONCEPT REVIEW QUESTIONS 845 QUIZ 845 PRACTICE
QUESTIONS 847 CHALLENGE QUESTIONS 849 C H A P T E R 31 SHORT-TERM
FINANCIAL PLANNING 851 31.1 LINKS BETWEEN LONG-TERM AND SHORT-TERM
FINANCING DECISIONS 852 31.2 TRACING CHANGES IN CASH AND WORKING CAPITAL
855 TRACING CHANGES IN NET WORKING CAPITAL / PROFITS AND CASH FLOW 31.3
CASH BUDGETING 859 PREPARING THE CASH BUDGET: INF LOW / PREPARING THE
CASH BUDGET: OUTFLOW 31.4 THE SHORT-TERM FINANCING PLAN 862 OPTIONSFOR
SHORT-TERM FINANCING/'DYNAMIC'S FINANCING PLAN / EVALUATING THE PLAN IA
NOTE ON SHORT- TERM FINANCIAL PLANNING MODELS 31.5 SOURCES OF SHORT-TERM
BORROWING 865 BANK LOANS / COMMERCIAL PAPER /MEDLUM-TERM NOTES SUMMARY
872 FURTHER READING 874 WEB PROJECT 874 CONCEPT REVIEW QUESTIONS 874
QUIZ 875 PRACTICE QUESTIONS 876 CHALLENGE QUESTIONS 879 C H A P T E R 30
WORKING CAPITAL MANAGEMENT 819 P A R T T E N 30.1 30.2 30.3 30.4
INVENTORIES 820 CREDIT MANAGEMENT 823 TERMS OFSALE / THE PROMISE TO PAY
I CREDIT ANALYSIS / THE CREDIT DECISION / COLLECTION POLICY CASH 830 HOW
PURCHASES ARE PAID FOR / ELECTRONIC FUNDS TRANSFER / SPEEDING UP CHECK
COLLECTIONS /INTERNATIONAL CASH MANAGEMENT / PAYINGFOR BANK SERVICES
MARKETABLE SECURITIES 836 CALCULATING THE YIELD ON MONEY-MARKET
INVESTMENTS / YIELDS ON MONEY-MARKET INVESTMENTS / THE INTERNATIONAL
MONEY MARKET / MONEY-MARKET INSTRUMENTS SUMMARY 842 FURTHER READING 844
MERGERS, CORPORATE CONTROL, AND GOVERNANCE 881 C H A P T E R 32 MERGERS
882 32.1 SENSIBLE MOTIVES FOR MERGERS 882 ECONOMIES OF SCALE / ECONOMIES
OFVERTICAL INTEGRATION / COMPLEMENTARY RESOURCES / SURPLUS FUNDS /
ELIMINATING INEFFICIENCIES /INDUSTRY CONSOLIDATION 32.2 SOME DUBIOUS
REASONS FOR MERGERS 888 DIVERSIFIKATION /INCREASING EARNINGS PER SHARE:
THE BOOTSTRAP GAME / POWER FINANCING COSTS CONTENTS 32.3 ESTIMATING
MERGER GAINS AND COSTS 891 RIGHT AND WRONG WAYS TO ESTIMATE THE BENEFITS
OF MERGERS /MORE ON ESTIMATING COSTS * WHAT IFTHE TARGET'S STOCK PRICE
ANTICIPATES THE MERGER? / ESTIMATING COST WHEN THE MERGER IS FINANCED BY
STOCK /ASYMMETRIE INFORMATION 32.4 THE MECHANICS OF A MERGER 896
MERGERS, ANTITRUST EAW, AND POPULAER OPPOSITION / THE FORM OF ACAUISITION
/ MERGER ACCOUNTING I SOME TAX CONSIDERATIONS 32.5 PROXY FIGHTS,
TAKEOVERS, AND THE MARKET FOR CORPORATE CONTROL 900 PROXY CONTESTS /
TAKEOVERS / ORACLE BIDSFOR PEOPLESOFT / TAKEOVER DEFENSES / WHO GAINS
MOST IN MERGERS? 32.6 MERGERS AND THE ECONOMY 907 MERGER WAVES /DO
MERGERS GENERATE NET BENEFITS? SUMMARY 909 FURTHER READING 909 CONCEPT
REVIEW QUESTIONS 910 QUIZ 910 PRACTICE QUESTIONS 911 CHALLENGE QUESTIONS
913 APPENDIX: CONGLOMERATE MERGERS AND VALUE ADDITIVITY 913 C H A P T E
R 33 CORPORATE RESTRUCTURING 916 33.1 LEVERAGED BUYOUTS 917 R/R NABISCO
/BARBARIANS AT THE GATE? /LEVERAGED RESTRUCTURINGS /LBOS AND LEVERAGED
RESTRUCTURINGS 33.2 FUSION AND FISSION IN CORPORATE FINANCE 921
SPIN-OFFS I CARVE-OUTS / ASSET SALES / PRIVATIZATION 33.3 PRIVATE EQUITY
927 PRIVATE-EQUITY PARTNERSHIPS /ARE PRIVATE-EQUITY FUNDS TODAY 'S
CONGLOMERATES? 33.4 BANKRUPTCY 933 IS CHAPTER 11 EFFICIENT? / WORKOUTS
/ALTERNATIVE BANKRUPTCY PROCEDURES SUMMARY 938 FURTHER READING 939
CONCEPT REVIEW QUESTIONS 940 QUIZ 940 PRACTICE QUESTIONS 941 C H A P T E
R 34 GOVERNANCE AND CORPORATE CONTROL AROUND THE WORLD 943 34.1
FINANCIAL MARKETS AND INSTITUTIONS 944 INVESTOR PROTECTION AND THE
DEVELOPMENT OF FINANCIAL MARKETS 34.2 OWNERSHIP, CONTROL, AND GOVERNANCE
948 OWNERSHIP AND CONTROL IN JAPAN / OWNERSHIP AND CONTROL IN GERMANY /
EUROPEAN BOARDS OFDIRECTORS / OWNERSHIP AND CONTROL IN OTHER COUNTRIES /
CONGLOMERATES REVISITED 34.3 DO THESE DIFFERENCES MATTER? 957 RISK AND
SHORT-TERMISM / GROIVTH INDUSTRIES AND DECLINING INDUSTRIES /
TRANSPARENCY AND GOVERNANCE SUMMARY 961 FURTHER READING 963 CONCEPT
REVIEW QUESTIONS 963 QUIZ 963 PRACTICE QUESTIONS 964 P A R T E L E V E N
CONCLUSION 966 C H A P T E R 35 CONCLUSION: WHAT WE DO AND DO NOT KNOW
ABOUT FINANCE 966 35.1 WHAT WE DO KNOW: THE SEVEN MOST IMPORTANT IDEAS
IN FINANCE 966 1. NET PRESENT VALUE / 2. THE CAPITAL ASSET PRICING MODEL
/3. EFFICIENT CAPITAL MARKETS /4. VALUE ADDITIVITY AND THE LAW OF
CONSERVATION OF VALUE / 5. CAPITAL STRUCTURE THEORY / 6. OPTION THEORY /
7. AGENCY THEORY 35.2 WHAT WE DO NOT KNOW: 10 UNSOLVED PROBLEMS IN
FINANCE 969 1. WHAT DETERMINES PROJECT RISK AND PRESENT VALUE? / 2. RISK
AND RETURN * WHAT HAVE WE MISSED? / 3. HOW IMPORTANT ARE THE EXCEPTIONS
TO THE EFFICIENT-MARKET THEORY? / 4. IS MANAGEMENT AN OFF-BALANCE-SHEET
LIABILITY? /5. HOW CAN WE EXPLAIN THE SUCCESS OFNEW SECURITIES AND NEW
MARKETS? / 6. HOW CAN WE RESOLVE THE PAYOUT CONTROVERSY? / 7. WHAT RISKS
SHOULD A FIRM TAKE?'/8. WHAT IS THE VALUE OF LIQUIDITY? / 9. HOW CAN WE
EXPLAIN MERGER WAVES? 110. HOW CAN WE EXPLAIN INTERNATIONAL DIFFERENCES
IN FINANCIAL ARCHITECTURE? 35.3 A FINAL WORD 976 APPENDIX A PRESENT
VALUE TABLES A APPENDIX B ANSWERS TO QUIZZES B GLOSSARY G GLOBAL INDEX
1-1 GENERAL INDEX 1-7 XXVI1 |
| any_adam_object | 1 |
| any_adam_object_boolean | 1 |
| author | Brealey, Richard A. 1936- Myers, Stewart C. 1940- Allen, Franklin |
| author_GND | (DE-588)124289401 (DE-588)129325023 |
| author_facet | Brealey, Richard A. 1936- Myers, Stewart C. 1940- Allen, Franklin |
| author_role | aut aut aut |
| author_sort | Brealey, Richard A. 1936- |
| author_variant | r a b ra rab s c m sc scm f a fa |
| building | Verbundindex |
| bvnumber | BV035047533 |
| callnumber-first | H - Social Science |
| callnumber-label | HG4026 |
| callnumber-raw | HG4026 |
| callnumber-search | HG4026 |
| callnumber-sort | HG 44026 |
| callnumber-subject | HG - Finance |
| classification_rvk | QP 700 |
| classification_tum | WIR 680f |
| ctrlnum | (OCoLC)159822486 (DE-599)BVBBV035047533 |
| dewey-full | 658.15 |
| dewey-hundreds | 600 - Technology (Applied sciences) |
| dewey-ones | 658 - General management |
| dewey-raw | 658.15 |
| dewey-search | 658.15 |
| dewey-sort | 3658.15 |
| dewey-tens | 650 - Management and auxiliary services |
| discipline | Wirtschaftswissenschaften |
| discipline_str_mv | Wirtschaftswissenschaften |
| edition | 9. ed. |
| format | Book |
| fullrecord | <?xml version="1.0" encoding="UTF-8"?><collection xmlns="http://www.loc.gov/MARC21/slim"><record><leader>03072nam a2200709zc 4500</leader><controlfield tag="001">BV035047533</controlfield><controlfield tag="003">DE-604</controlfield><controlfield tag="005">00000000000000.0</controlfield><controlfield tag="007">t</controlfield><controlfield tag="008">080910s2008 xxu|||| |||| 00||| eng d</controlfield><datafield tag="020" ind1=" " ind2=" "><subfield code="a">9780073405100</subfield><subfield code="9">978-0-07-340510-0</subfield></datafield><datafield tag="020" ind1=" " ind2=" "><subfield code="a">0073405108</subfield><subfield code="9">0-07-340510-8</subfield></datafield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(OCoLC)159822486</subfield></datafield><datafield tag="035" ind1=" " ind2=" "><subfield code="a">(DE-599)BVBBV035047533</subfield></datafield><datafield tag="040" ind1=" " ind2=" "><subfield code="a">DE-604</subfield><subfield code="b">ger</subfield><subfield code="e">aacr</subfield></datafield><datafield tag="041" ind1="0" ind2=" "><subfield code="a">eng</subfield></datafield><datafield tag="044" ind1=" " ind2=" "><subfield code="a">xxu</subfield><subfield code="c">US</subfield></datafield><datafield tag="049" ind1=" " ind2=" "><subfield code="a">DE-573</subfield><subfield code="a">DE-739</subfield></datafield><datafield tag="050" ind1=" " ind2="0"><subfield code="a">HG4026</subfield></datafield><datafield tag="082" ind1="0" ind2=" "><subfield code="a">658.15</subfield><subfield code="2">22</subfield></datafield><datafield tag="084" ind1=" " ind2=" "><subfield code="a">QP 700</subfield><subfield code="0">(DE-625)141926:</subfield><subfield code="2">rvk</subfield></datafield><datafield tag="084" ind1=" " ind2=" "><subfield code="a">WIR 680f</subfield><subfield code="2">stub</subfield></datafield><datafield tag="100" ind1="1" ind2=" "><subfield code="a">Brealey, Richard A.</subfield><subfield code="d">1936-</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)124289401</subfield><subfield code="4">aut</subfield></datafield><datafield tag="245" ind1="1" ind2="0"><subfield code="a">Principles of corporate finance</subfield><subfield code="c">Richard A. Brealey ; Stewart C. Myers ; Franklin Allen</subfield></datafield><datafield tag="246" ind1="1" ind2="3"><subfield code="a">Corporate finance</subfield></datafield><datafield tag="250" ind1=" " ind2=" "><subfield code="a">9. ed.</subfield></datafield><datafield tag="264" ind1=" " ind2="1"><subfield code="a">Boston [u.a.]</subfield><subfield code="b">McGraw-Hill/Irwin</subfield><subfield code="c">2008</subfield></datafield><datafield tag="300" ind1=" " ind2=" "><subfield code="a">Getr. Zählung</subfield><subfield code="b">graf. Darst.</subfield></datafield><datafield tag="336" ind1=" " ind2=" "><subfield code="b">txt</subfield><subfield code="2">rdacontent</subfield></datafield><datafield tag="337" ind1=" " ind2=" "><subfield code="b">n</subfield><subfield code="2">rdamedia</subfield></datafield><datafield tag="338" ind1=" " ind2=" "><subfield code="b">nc</subfield><subfield code="2">rdacarrier</subfield></datafield><datafield tag="490" ind1="0" ind2=" "><subfield code="a">The McGraw-Hill/Irwin series in finance, insurance, and real estate : Financial management</subfield></datafield><datafield tag="500" ind1=" " ind2=" "><subfield code="a">8. Aufl. u.d.T.: Brealey, Richard A.: Corporate finance</subfield></datafield><datafield tag="500" ind1=" " ind2=" "><subfield code="a">Includes bibliographical references and index</subfield></datafield><datafield tag="650" ind1=" " ind2="7"><subfield code="a">Finanzas corporativas</subfield><subfield code="2">lemb</subfield></datafield><datafield tag="650" ind1=" " ind2="4"><subfield code="a">Corporations</subfield><subfield code="x">Finance</subfield></datafield><datafield tag="650" ind1="0" ind2="7"><subfield code="a">Finanzplanung</subfield><subfield code="0">(DE-588)4017200-4</subfield><subfield code="2">gnd</subfield><subfield code="9">rswk-swf</subfield></datafield><datafield tag="650" ind1="0" ind2="7"><subfield code="a">Unternehmen</subfield><subfield code="0">(DE-588)4061963-1</subfield><subfield code="2">gnd</subfield><subfield code="9">rswk-swf</subfield></datafield><datafield tag="650" ind1="0" ind2="7"><subfield code="a">Corporate Finance</subfield><subfield code="0">(DE-588)4269795-5</subfield><subfield code="2">gnd</subfield><subfield code="9">rswk-swf</subfield></datafield><datafield tag="650" ind1="0" ind2="7"><subfield code="a">Finanzierung</subfield><subfield code="0">(DE-588)4017182-6</subfield><subfield code="2">gnd</subfield><subfield code="9">rswk-swf</subfield></datafield><datafield tag="650" ind1="0" ind2="7"><subfield code="a">Finanzmanagement</subfield><subfield code="0">(DE-588)4139075-1</subfield><subfield code="2">gnd</subfield><subfield code="9">rswk-swf</subfield></datafield><datafield tag="655" ind1=" " ind2="7"><subfield code="8">1\p</subfield><subfield code="0">(DE-588)4151278-9</subfield><subfield code="a">Einführung</subfield><subfield code="2">gnd-content</subfield></datafield><datafield tag="655" ind1=" " ind2="7"><subfield code="8">2\p</subfield><subfield code="0">(DE-588)4123623-3</subfield><subfield code="a">Lehrbuch</subfield><subfield code="2">gnd-content</subfield></datafield><datafield tag="689" ind1="0" ind2="0"><subfield code="a">Unternehmen</subfield><subfield code="0">(DE-588)4061963-1</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="0" ind2="1"><subfield code="a">Finanzierung</subfield><subfield code="0">(DE-588)4017182-6</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="0" ind2="2"><subfield code="a">Corporate Finance</subfield><subfield code="0">(DE-588)4269795-5</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="0" ind2=" "><subfield code="8">3\p</subfield><subfield code="5">DE-604</subfield></datafield><datafield tag="689" ind1="1" ind2="0"><subfield code="a">Unternehmen</subfield><subfield code="0">(DE-588)4061963-1</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="1" ind2="1"><subfield code="a">Finanzplanung</subfield><subfield code="0">(DE-588)4017200-4</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="1" ind2=" "><subfield code="8">4\p</subfield><subfield code="5">DE-604</subfield></datafield><datafield tag="689" ind1="2" ind2="0"><subfield code="a">Finanzierung</subfield><subfield code="0">(DE-588)4017182-6</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="2" ind2="1"><subfield code="a">Finanzmanagement</subfield><subfield code="0">(DE-588)4139075-1</subfield><subfield code="D">s</subfield></datafield><datafield tag="689" ind1="2" ind2=" "><subfield code="8">5\p</subfield><subfield code="5">DE-604</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Myers, Stewart C.</subfield><subfield code="d">1940-</subfield><subfield code="e">Verfasser</subfield><subfield code="0">(DE-588)129325023</subfield><subfield code="4">aut</subfield></datafield><datafield tag="700" ind1="1" ind2=" "><subfield code="a">Allen, Franklin</subfield><subfield code="e">Verfasser</subfield><subfield code="4">aut</subfield></datafield><datafield tag="856" ind1="4" ind2="2"><subfield code="m">GBV Datenaustausch</subfield><subfield code="q">application/pdf</subfield><subfield code="u">http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016716264&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA</subfield><subfield code="3">Inhaltsverzeichnis</subfield></datafield><datafield tag="999" ind1=" " ind2=" "><subfield code="a">oai:aleph.bib-bvb.de:BVB01-016716264</subfield></datafield><datafield tag="883" ind1="1" ind2=" "><subfield code="8">1\p</subfield><subfield code="a">cgwrk</subfield><subfield code="d">20201028</subfield><subfield code="q">DE-101</subfield><subfield code="u">https://d-nb.info/provenance/plan#cgwrk</subfield></datafield><datafield tag="883" ind1="1" ind2=" "><subfield code="8">2\p</subfield><subfield code="a">cgwrk</subfield><subfield code="d">20201028</subfield><subfield code="q">DE-101</subfield><subfield code="u">https://d-nb.info/provenance/plan#cgwrk</subfield></datafield><datafield tag="883" ind1="1" ind2=" "><subfield code="8">3\p</subfield><subfield code="a">cgwrk</subfield><subfield code="d">20201028</subfield><subfield code="q">DE-101</subfield><subfield code="u">https://d-nb.info/provenance/plan#cgwrk</subfield></datafield><datafield tag="883" ind1="1" ind2=" "><subfield code="8">4\p</subfield><subfield code="a">cgwrk</subfield><subfield code="d">20201028</subfield><subfield code="q">DE-101</subfield><subfield code="u">https://d-nb.info/provenance/plan#cgwrk</subfield></datafield><datafield tag="883" ind1="1" ind2=" "><subfield code="8">5\p</subfield><subfield code="a">cgwrk</subfield><subfield code="d">20201028</subfield><subfield code="q">DE-101</subfield><subfield code="u">https://d-nb.info/provenance/plan#cgwrk</subfield></datafield></record></collection> |
| genre | 1\p (DE-588)4151278-9 Einführung gnd-content 2\p (DE-588)4123623-3 Lehrbuch gnd-content |
| genre_facet | Einführung Lehrbuch |
| id | DE-604.BV035047533 |
| illustrated | Not Illustrated |
| index_date | 2024-07-02T21:55:21Z |
| indexdate | 2024-07-09T21:20:59Z |
| institution | BVB |
| isbn | 9780073405100 0073405108 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-016716264 |
| oclc_num | 159822486 |
| open_access_boolean | |
| owner | DE-573 DE-739 |
| owner_facet | DE-573 DE-739 |
| physical | Getr. Zählung graf. Darst. |
| publishDate | 2008 |
| publishDateSearch | 2008 |
| publishDateSort | 2008 |
| publisher | McGraw-Hill/Irwin |
| record_format | marc |
| series2 | The McGraw-Hill/Irwin series in finance, insurance, and real estate : Financial management |
| spelling | Brealey, Richard A. 1936- Verfasser (DE-588)124289401 aut Principles of corporate finance Richard A. Brealey ; Stewart C. Myers ; Franklin Allen Corporate finance 9. ed. Boston [u.a.] McGraw-Hill/Irwin 2008 Getr. Zählung graf. Darst. txt rdacontent n rdamedia nc rdacarrier The McGraw-Hill/Irwin series in finance, insurance, and real estate : Financial management 8. Aufl. u.d.T.: Brealey, Richard A.: Corporate finance Includes bibliographical references and index Finanzas corporativas lemb Corporations Finance Finanzplanung (DE-588)4017200-4 gnd rswk-swf Unternehmen (DE-588)4061963-1 gnd rswk-swf Corporate Finance (DE-588)4269795-5 gnd rswk-swf Finanzierung (DE-588)4017182-6 gnd rswk-swf Finanzmanagement (DE-588)4139075-1 gnd rswk-swf 1\p (DE-588)4151278-9 Einführung gnd-content 2\p (DE-588)4123623-3 Lehrbuch gnd-content Unternehmen (DE-588)4061963-1 s Finanzierung (DE-588)4017182-6 s Corporate Finance (DE-588)4269795-5 s 3\p DE-604 Finanzplanung (DE-588)4017200-4 s 4\p DE-604 Finanzmanagement (DE-588)4139075-1 s 5\p DE-604 Myers, Stewart C. 1940- Verfasser (DE-588)129325023 aut Allen, Franklin Verfasser aut GBV Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016716264&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk 2\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk 3\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk 4\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk 5\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Brealey, Richard A. 1936- Myers, Stewart C. 1940- Allen, Franklin Principles of corporate finance Finanzas corporativas lemb Corporations Finance Finanzplanung (DE-588)4017200-4 gnd Unternehmen (DE-588)4061963-1 gnd Corporate Finance (DE-588)4269795-5 gnd Finanzierung (DE-588)4017182-6 gnd Finanzmanagement (DE-588)4139075-1 gnd |
| subject_GND | (DE-588)4017200-4 (DE-588)4061963-1 (DE-588)4269795-5 (DE-588)4017182-6 (DE-588)4139075-1 (DE-588)4151278-9 (DE-588)4123623-3 |
| title | Principles of corporate finance |
| title_alt | Corporate finance |
| title_auth | Principles of corporate finance |
| title_exact_search | Principles of corporate finance |
| title_exact_search_txtP | Principles of corporate finance |
| title_full | Principles of corporate finance Richard A. Brealey ; Stewart C. Myers ; Franklin Allen |
| title_fullStr | Principles of corporate finance Richard A. Brealey ; Stewart C. Myers ; Franklin Allen |
| title_full_unstemmed | Principles of corporate finance Richard A. Brealey ; Stewart C. Myers ; Franklin Allen |
| title_short | Principles of corporate finance |
| title_sort | principles of corporate finance |
| topic | Finanzas corporativas lemb Corporations Finance Finanzplanung (DE-588)4017200-4 gnd Unternehmen (DE-588)4061963-1 gnd Corporate Finance (DE-588)4269795-5 gnd Finanzierung (DE-588)4017182-6 gnd Finanzmanagement (DE-588)4139075-1 gnd |
| topic_facet | Finanzas corporativas Corporations Finance Finanzplanung Unternehmen Corporate Finance Finanzierung Finanzmanagement Einführung Lehrbuch |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016716264&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
| work_keys_str_mv | AT brealeyricharda principlesofcorporatefinance AT myersstewartc principlesofcorporatefinance AT allenfranklin principlesofcorporatefinance AT brealeyricharda corporatefinance AT myersstewartc corporatefinance AT allenfranklin corporatefinance |