Waubonsee Community College

Corporate finance demystified, Troy A. Adair

eng

illustrations

index present

non fiction

Corporate finance demystified

649079939

Troy A. Adair

This book provides students at every level with a comprehensive introduction to corporate finance principles, the time value of money, including present value, amortization schedules, and more

Acknowledgments -- Introduction -- Part 1: Introduction: -- 1: What is corporate finance? -- What is finance? -- Subfields of finance -- Parts of corporate finance -- So, why is this so complicated? -- Why are we studying corporate finance? -- Quiz -- 2: Setting the stage: -- Basic forms of business organization -- Goal of the financial manager -- Agency relationships and conflicts -- Quiz -- 3: Accounting statements and cash flows: -- Balance Sheet: Assets versus liabilities -- Balance Sheet: Short-term versus -- Long-term accounts -- Income statement -- Taxes -- Cash flow from assets -- Quiz -- 4: Common-size, common-base year, and ratio analysis: -- General goal of ratio analysis: summarization -- Good and bad values for ratios -- Additional effect of ratio analysis: standardization -- Common-size statement analysis -- Common-base year analysis -- Liquidity ratios -- Leverage ratios -- Asset utilization ratios -- Profitability ratios -- Quiz -- Part 2: I Will Gladly Pay You $2 Tomorrow For $1 Today: The Time Value Of Money: -- 5: Present and future value -- Using a financial calculator or a spreadsheet program -- Time lines -- TVM formulas -- Calculator setup and notational conventions -- Using the TVM formulas -- Example-car loan with delayed first payment -- Example-retirement calculation -- What about annuities due? -- Quiz -- 6: Compounding and interest rate conversion: when what you've got isn't what you need: -- Interest rate flavors -- APRs explained -- Just because you have a new toy doesn't mean you have to use it! -- Dealing with other nominal rates -- Caution on using calculators or textbook formulas to convert rates -- Quiz7: Payment composition and amortization schedules: -- Calculating payment components for pure discount loans -- Calculating payment components for interest-only loans -- Amortized Loans: Constant-payment loans -- Amortized Loans: Constant-principal loans -- Final note on amortized loans -- Quiz -- Part 3: Valuation: -- 8: Valuing bonds: -- Conventions of bond quotations -- Mathematics of a bond -- There are rates, and then there are rates that aren't really rates -- Solving for bond price -- Solving for anything but bond price -- Parts of YTM -- Quiz -- 9: Valuing stocks: -- Conventions of stock quotations -- Mathematics of a stock: Constant dividends -- Mathematics of a stock: Constantly growing dividends -- Mathematics of a stock: Constantly shrinking dividends -- What g>r really means -- Mathematics of a stock: Nonconstant dividends -- Dividend yield and expected capital -- Gains yields on stocks -- Quiz -- 10: Valuing projects: the capital-budgeting decision rules: -- Why cash flow signs matter now -- Notational conventions, part 2 -- Net present value -- Intuition behind NPV -- Payback -- Discounted payback -- Comparison on the intuitions in payback and discounted payback -- Average Accounting Return (AAR) -- Internal Rate of Return (IRR) -- Modified IRR (MIRR) -- Profitability Index (PI) -- Quiz -- Part 4: Where Do Interest Rates Come From? Risk, Return, And The Cost Of Capital: -- 11: Measuring risk and return: -- Using the past to predict the future: computing the average and standard deviation of historic returns -- Explicit guessing: calculating the expected return and standard deviation across expected states of nature -- Choosing which method to use for average and standard deviation -- Portfolio averages and standard deviations -- Quiz -- 12: Calculating beta: -- Beta estimation methodology -- Choosing and gathering the necessary data -- Calculating the beta -- Portfolio betas -- Quiz -- 13: Analyzing the security market line: -- Relationship between the security market line and the CAPM equation -- Estimating the intercept of the SML -- Estimating the slope of the SML -- Estimating the X variable, beta -- Bringing it all together -- Quiz -- 14: Weighted average cost of capital: -- WACC formula -- Calculating the component cost of equity, RE -- Calculating the component cost of preferred stock, RP -- Calculating the before-tax cost of debt, RD -- Calculating the WACC -- Note on nominal versus effective rates -- Quiz -- Part 5: Advanced Topics In Corporate Finance: -- 15: Estimating future cash flows: -- Sample project -- Calculating total cash flow: the formula -- Guiding principles for calculating total cash flow -- Calculating depreciation -- Operating Cash Flow (OCF) -- Net capital spending -- Changes in NWC -- Bringing it all together: total cash flow -- Quiz -- 16: Scenario analysis and sensitivity analysis: -- Sample project -- Scenario analysis -- Sensitivity analysis -- When to use which -- Quiz -- 17: Option valuation: -- Options: the basics -- Values of options at expiration -- Valuing a call option before expiration: the binomial option pricing model -- Valuing a call option before expiration: the Black-Scholes option pricing model -- Put-call parity -- Quiz -- Final exam -- Answers to quizzes and final exam -- Appendix A: Depreciation charts -- Appendix B: Values for the standard normal cumulative distribution function -- Index