Corporate Finance

Corporate Finance: Theory and Practice continues to hold sway as one of the most popular financial textbooks, thanks to its four unique features:
A balanced blend of theory and practice: authors hold academic positions at top ranking universities and business schools and are also investment bankers, private investors or sit on the boards of listed and unlisted companies
A presentation of concepts that explain situations, followed by a discussion of techniques in a direct and succinct style
Content enriched by the vernimmen.com website, which with 1,500 daily visitors is one of the leading finance teaching sites worldwide
Free monthly updates on finance through The Vernimmen.com Newsletter, with over 60,000 subscribers
The authors draw on their dual experience to enhance and expand the content of this new, fourth edition through the inclusion of new chapters on venture finance (financing start-ups) and debt structuring. The remainder of the book is brought fully up to date, and the latest available information is used to complete the numerous statistical tables.

Merging theory and practice into a comprehensive, highly-anticipated text
Corporate Finance continues its legacy as one of the most popular financial textbooks, with well-established content from a diverse and highly respected author team.

Preface viii
Frequently Used Symbols xii
1 What is Corporate Finance? 1
Section I Financial Analysis 15
Part One Fundamental Concepts in Financial Analysis 17
2 Cash Flow 19
3 Earnings 29
4 Capital Employed and Invested Capital 44
5 Walking Through from Earnings to Cash Flow 57
6 Getting to Grips with Consolidated Accounts 71
7 How to Cope with the Most Complex Points in Financial Accounts 89
Part Two Financial Analysis and Forecasting 115
8 How to Perform a Financial Analysis 117
9 Margin Analysis: Structure 143
10 Margin Analysis: Risks 166
11 Working Capital and Capital Expenditures 181
12 Financing 202
13 Return on Capital Employed and Return on Equity 216
14 Conclusion of Financial Analysis 236
Section II Investors and Markets 243
Part One Investment Decision Rules 245
15 The Financial Markets 247
16 The Time Value of Money and Net Present Value 268
17 The Internal Rate of Return 285
Part Two The Risk of Securities and the Required Rate of Return 299
18 Risk and Return 301
19 The Required Rate of Return 329
Part Three Financial Securities 347
20 Bonds 349
21 Other Debt Products 371
22 Shares 386
23 Options 406
24 Hybrid Securities 428
25 Selling Securities 446
Section III Value 471
26 Value and Corporate Finance 473
27 Measuring Value Creation 492
28 Investment Criteria 510
29 The Cost of Capital 528
30 Risk and Investment Analysis 545
31 Valuation Techniques 558
Section IV Corporate Financial Policies 589
Part One Capital Structure Policies 591
32 Capital Structure and the Theory of Perfect Capital Markets 593
33 Capital Structure, Taxes and Organisation Theories 605
34 Debt, Equity and Options Theory 622
35 Working Out Details: The Design of The Capital Structure 641
Part Two Equity Capital 659
36 Returning Cash to Shareholders 661
37 Distribution in Practice: Dividends and Share Buy-Backs 677
38 Share Issues 695
39 Implementing a Debt Policy 708
Section V Financial Management 725
Part One Corporate Governance and Financial Engineering 727
40 Setting Up a Company or Financing Start-Ups 729
41 Choice of Corporate Structure 748
42 Initial Public Offerings (iPOs) 770
43 Corporate Governance 783
44 Taking Control of a Company 797
45 Mergers and Demergers 820
46 Leveraged Buyouts (LBOs) 837
47 Bankruptcy and Restructuring 852
Part Two Managing Working Capital, Cash Flows and Financial Risks 867
48 Managing Working Capital 869
49 Managing Cash Flows 881
50 Managing Financial Risks 900
Epilogue--Finance and Strategy 925
Top 20 Largest Listed Companies 933
Contents 941
Index 951