Corporate Finance

Series
Pearson
Author
Denzil Watson / Antony Head  
Publisher
Pearson
Cover
Softcover
Edition
8
Language
English
Total pages
520
Pub.-date
February 2019
ISBN13
9781292244310
ISBN
1292244313
Related Titles



Description

Corporate Finance: Principles and Practice is the book that helps you to get to grips with core concepts and topics of corporate finance all in one short volume, illustrating applications with examples from well-known companies, and explaining the key principles and mathematical techniques needed to be successful in your studies and in your career.

 

MyLab Finance is not included. Students, if MyLab Finance is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyLab Finance should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.

Features

  • Questions have been designed in several types - questions for class discussion, questions for students to review and learn from, and self-text questions.
  • Step by step explanations of key principles and mathematical techniques needed for a career in business
  • Numerous examples and vignettes which take a closer look at real companies
  • Instructors can set assignments and tests in MyLab Finance for this title can be worked on for practice and to get immediate feedback

New to this Edition

  • Chapter vignettes are refreshed and the accompanying questions are updated, with the aim of deepening student's knowledge of key contemporary issues
  • Up-to-date with the latest changes in regulations and taxation, such as the UK tax treatment of dividends

Table of Contents

Contents

 

Preface

Acknowledgements

1 The finance function

Learning objectives

Introduction

1.1 Two key concepts in corporate finance

1.2 The role of the financial manager

1.3 Corporate objectives

1.4 How is shareholder wealth maximised?

1.5 Agency theory

1.6 Corporate governance

1.7 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

2 Capital markets, market efficiency and ratio analysis

Learning objectives

Introduction

2.1 Sources of business finance

2.2 Capital markets

2.3 Capital market efficiency

2.4 Assessing financial performance

2.5 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

3 Short-term finance and working capital management

Learning objectives

Introduction

3.1 The objectives of working capital management

3.2 Working capital policies

3.3 Working capital and the cash conversion cycle

3.4 Overtrading

3.5 Managing inventory

3.6 Managing cash

3.7 Managing trade receivables

3.8 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

4 Long-term finance: equity finance

Learning objectives

Introduction

4.1 Equity finance

4.2 The Stock Exchange

4.3 Rights issues

4.4 Scrip issues, share splits, scrip dividends and share repurchases

4.5 Preference shares

4.6 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

5 Long-term finance: debt finance, hybrid finance and leasing

Learning objectives

Introduction

5.1 Bonds, loan notes, loan stock and debentures

5.2 Bank and institutional debt

5.3 International debt finance

5.4 Convertible bonds

5.5 Warrants

5.6 Valuing fixed interest bonds

5.7 Valuing convertible bonds

5.8 Leasing

5.9 Evaluating the financial effects of financing choices

5.10 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

6 An overview of investment appraisal methods

Learning objectives

Introduction

6.1 The payback method

6.2 The return on capital employed method

6.3 The net present value method

6.4 The internal rate of return method

6.5 Comparing the NPV and IRR methods

6.6 The profitability index and capital rationing

6.7 The discounted payback method

6.8 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

7 Investment appraisal: applications and risk

Learning objectives

Introduction

7.1 Relevant project cash flows

7.2 Taxation and capital investment decisions

7.3 Inflation and capital investment decisions

7.4 Investment appraisal and risk

7.5 Appraisal of foreign direct investment

7.6 Empirical investigations of investment appraisal

7.7 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

8 Portfolio theory and the capital asset pricing model

Learning objectives

Introduction

8.1 The measurement of risk

8.2 The concept of diversification

8.3 Investor attitudes to risk

8.4 Markowitz’s portfolio theory

8.5 Introduction to the capital asset pricing model

8.6 Using the CAPM to value shares

8.7 Empirical tests of the CAPM

8.8 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

9 The cost of capital and capital structure

Learning objectives

Introduction

9.1 Calculating the cost of individual sources of finance

9.2 Calculating the weighted average cost of capital

9.3 Average and marginal cost of capital

9.4 The CAPM and investment appraisal

9.5 Practical problems with calculating WACC

9.6 WACC in the real world

9.7 The cost of capital for foreign direct investment

9.8 Gearing: its measurement and significance

9.9 The concept of an optimal capital structure

9.10 The traditional approach to capital structure

9.11 Miller and Modigliani (I): net income approach

9.12 Miller and Modigliani (II): corporate tax

9.13 Market imperfections

9.14 Miller and personal taxation

9.15 Pecking order theory

9.16 Conclusion: does an optimal capital structure exist?

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

10 Dividend policy

Learning objectives

Introduction

10.1 Dividends: operational and practical issues

10.2 The effect of dividends on shareholder wealth

10.3 Dividend irrelevance

10.4 Dividend relevance

10.5 Dividend relevance or irrelevance?

10.6 Dividend policies

10.7 Alternatives to cash dividends

10.8 Empirical evidence on dividend policy

10.9 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

11 Mergers and takeovers

Learning objectives

Introduction

11.1 The terminology of mergers and takeovers

11.2 Justifications for acquisitions

11.3 Trends in takeover activity

11.4 Target company valuation

11.5 The financing of acquisitions

11.6 Strategic and tactical issues

11.7 Divestment

11.8 Private equity

11.9 Empirical research on acquisitions

11.10 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

12 Risk management

Learning objectives

Introduction

12.1 Interest and exchange rate risk

12.2 Internal risk management

12.3 External risk management

12.4 Futures contracts

12.5 Options

12.6 Swaps

12.7 Issues in interest and exchange risk management

12.8 Political risk

12.9 Conclusion

Key points

Self-test questions

Questions for review

Questions for discussion

References

Recommended reading

Answers to self-test questions

Glossary

Present value tables

Index

 

Back Cover

In this new and fully updated Eighth Edition, the core concepts and topics of corporate finance are introduced in an approachable, user-friendly style. Key principles and mathematical techniques needed for a career in business are clearly explained step-by-step and are put into practice through numerous examples and vignettes which take a closer look at real-world and well-known companies.

 

What’s new?

  • Chapter vignettes are refreshed and the accompanying questions are updated, with the aim of deepening student's knowledge of key contemporary issues

  • Up-to-date with the latest changes in regulations and taxation, such as the UK tax treatment of dividends

Denzil Watson is a Principal Lecturer and Antony Head is an Associate Lecturer in the Sheffield Business School at Sheffield Hallam University. They have extensive experience of teaching corporate finance, managerial finance and strategic financial management over many years and in a wide range of courses at undergraduate, postgraduate and professional level.


Author

Denzil Watson is a Principal Lecturer and Antony Head is an Associate Lecturer in the Sheffield Business School at Sheffield Hallam University. They have extensive experience of teaching corporate finance, managerial finance and strategic financial management over many years and in a wide range of courses at undergraduate, postgraduate and professional level.