Corporate Finance

The essential corporate finance text, updated with new data Corporate Finance has long been a favourite among both students and professionals in the field for its unique blend of theory and practice with a truly global perspective. The fact that the authors are well-known academics and professionals in the world of mergers and acquisitions (M&A) and investment explains this popularity. This new Fifth Edition continues the tradition, offering a comprehensive tour of the field through scenario-based instruction that places concept and application in parallel. A new chapter has been added, devoted to the financial management of operating buildings that aims to answer questions such as, to own or to rent? variable or fixed rents? etc. The book s companion website features regularly updated statistics, graphs and charts, along with study aids including quizzes, case studies, articles, lecture notes and computer models, reflecting the author team s deep commitment to facilitating well-rounded knowledge of corporate finance topics. In addition, a monthly free newsletter keeps the readers updated on the latest developments in corporate finance as well as the book s Facebook page, which publishes a post daily. Financial concepts can be quite complex, but a familiar setting eases understanding while immediate application promotes retention over simple memorisation. As comprehensive, relevant skills are the goal, this book blends academic and industry perspective with the latest regulatory and practical developments to provide a complete corporate finance education with real-world applicability. Blend theory and practice to gain a more relevant understanding of corporate finance concepts Explore the field from a truly European perspective for a more global knowledge base Learn essential concepts, tools and techniques by delving into real-world applications Access up-to-date data, plus quizzes, case studies, lecture notes and more A good financial manager must be able to analyse a company s economic, financial and strategic situation, and then value it, all while mastering the conceptual underpinnings of all decisions involved. By emphasising the ways in which concepts impact and relate to real-world situations, Corporate Finance provides exceptional preparation for working productively and effectively in the field.

The essential corporate finance text, updated with new dataCorporate Finance has long been a favourite among both students and professionals in the field for its unique blend of theory and practice with a truly global perspective. The fact that the authors are well-known academics and professionals in the world of mergers and acquisitions (M&A) and investment explains this popularity. This new Fifth Edition continues the tradition, offering a comprehensive tour of the field through scenario-based instruction that places concept and application in parallel. A new chapter has been added, devoted to the financial management of operating buildings that aims to answer questions such as, "to own or to rent?" "variable or fixed rents?" etc. The book's companion website features regularly updated statistics, graphs and charts, along with study aids including quizzes, case studies, articles, lecture notes and computer models, reflecting the author team's deep commitment to facilitating well-rounded knowledge of corporate finance topics. In addition, a monthly free newsletter keeps the readers updated on the latest developments in corporate finance as well as the book's Facebook page, which publishes a post daily.Financial concepts can be quite complex, but a familiar setting eases understanding while immediate application promotes retention over simple memorisation. As comprehensive, relevant skills are the goal, this book blends academic and industry perspective with the latest regulatory and practical developments to provide a complete corporate finance education with real-world applicability.* Blend theory and practice to gain a more relevant understanding of corporate finance concepts* Explore the field from a truly European perspective for a more global knowledge base* Learn essential concepts, tools and techniques by delving into real-world applications* Access up-to-date data, plus quizzes, case studies, lecture notes and moreA good financial manager must be able to analyse a company's economic, financial and strategic situation, and then value it, all while mastering the conceptual underpinnings of all decisions involved. By emphasising the ways in which concepts impact and relate to real-world situations, Corporate Finance provides exceptional preparation for working productively and effectively in the field.

Preface viiiFrequently used symbols xii1 What is Corporate finance? 1Section 1 Financial Analysis? 15Part One Fundamental Concepts in Financial Analysis 172 Cash Flow 193 Earnings 294 Capital Employed and Invested Capital 445 Walking Through from Earnings to Cash Flow 576 Getting to Grips with Consolidated Accounts 717 How to Cope with the Most Complex Points in Financial Accounts 88Part Two Financial Analysis and Forecasting 1158 How to Perform a Financial Analysis 1179 Margin Analysis: Structure 14110 Margin Analysis: Risks 16411 Working Capital and Capital Expenditures 17912 Financing 20113 Return on Capital Employed and Return on Equity 21614 Conclusion and Financial Analysis 235Section II Investors and Markets 243Part One Investment Decision Rules 24515 The Financial Markets 24716 The Time Value of Money and Net Present Value 26717 The Internal Rate of Return 284Part Two The Risk of Securities and the Required Rate of Return 29718 Risk and Return 29919 The Required Rate of Return 327Part Three Financial Securities 34520 Bonds 34721 Other DEBT Products 36922 Shares 38423 Options 40424 Hybrid Securities 42525 Selling Securities 443Section III Value 46926 Value and Corporate Finance 47127 Measuring Value Creation 49028 Investment Criteria 50829 The Cost of Capital 52630 Risk and Investment Analysis 54331 Valuation Techniques 555Section IV Corporate Financial Policies 585Part One Capital Structure Policies 58732 Capital Structure and the Theory of Perfect Capital Markets 58933 Capital Structure, Taxes and Organisation Theories 60134 DEBT, Equity and Options Theory 61835 Working Out Details: The Design of the Capital Structure 637Part Two Equity Capital 65736 Returning Cash to Shareholders 65937 Distribution in Practice: Dividends and Share Buy-Backs 67638 Share Issues 692Part Three DEBT Capital 70539 Implementing a DEBT Policy 707Section V Financial Management 725Part One Corporate Governance and Financial Engineering 72740 Setting Up a Company or Financing Start-Ups 72941 Choice of Corporate Structure 74842 Initial Public Offerings (IPOs) 77143 Corporate Governance 78344 Taking Control of A Company 79645 Mergers and Demergers 81946 Leveraged Buyouts (LBOs) 83647 Bankrupicy and Restructing 851Part Two Managing Working Capital, Cash Flows, Financial Risks and Real Estate 86348 Managing Working Capital 86549 Cash Management 87850 Managing Financial Risks 89751 Managing Operational Real Estate 922Epilogue - Finance and Strategy 935Top 20 Largest Listed Companies 943Contents 951Index 961