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Corporate Finance: Economic Foundations and Financial Modeling 3rd edition [Kõva köide]

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  • Formaat: Hardback, 816 pages, kõrgus x laius x paksus: 257x185x41 mm, kaal: 1383 g
  • Sari: CFA Institute Investment Series
  • Ilmumisaeg: 19-Jan-2023
  • Kirjastus: John Wiley & Sons Inc
  • ISBN-10: 1119743761
  • ISBN-13: 9781119743767
Teised raamatud teemal:
Corporate Finance: Economic Foundations and Financial Modeling 3rd editionSuurem pilt
  • Formaat: Hardback, 816 pages, kõrgus x laius x paksus: 257x185x41 mm, kaal: 1383 g
  • Sari: CFA Institute Investment Series
  • Ilmumisaeg: 19-Jan-2023
  • Kirjastus: John Wiley & Sons Inc
  • ISBN-10: 1119743761
  • ISBN-13: 9781119743767
Teised raamatud teemal:
Püsilink: https://www.kriso.ee/db/9781119743767.html
Märksõnad:

The complete guide to corporate finance, for today’s practitioners from CFA Institute

After ten years, the third edition of the CFA Institute Investment Series’ Corporate Finance text has arrived with a decisive focus on the needs of today’s investment professionals. Now titled Corporate Finance: Economic Foundations and Financial Modeling, this third edition outlines the essential tools, concepts, and applications within the discipline of corporate finance that businesses need to thrive.

New and refreshed content on Environmental, Social, and Governance (ESG) considerations alongside foundational coverage of capital structure and measures of leverage empower readers to support the growth of their organizations and develop the skills to succeed in our current corporate world. Six new chapters expand this updated discussion of corporate finance via topics such as corporate structures and ownership, capital investments, business models and risks, corporate restructuring, and more.

The companion workbook (sold separately) offers problems and solutions aligning with the text and allows learners to test their comprehension of key concepts.

Through Corporate Finance: Economic Foundations and Financial Modeling, 3rd Edition, readers will become proficient in the following areas:

  • Corporate structures and governance
  • Capital budgeting
  • Cost of capital
  • Measures of leverage
  • Business models, risks, and restructurings

CFA Institute is the world’s premier association for investment professionals, and the governing body for the CFA® Program, CIPM® Program, CFA Institute ESG Investing Certificate, and Investment Foundations® Program. Those seeking a deeper understanding of the fundamentals behind corporate finance will value the level of expertise CFA Institute brings to the discussion, providing a clear, comprehensive resource for students and professionals alike.

Foreword xv
Acknowledgments xix
About the CFA Institute Investment Series xxi
Chapter 1 Corporate Structures and Ownership
1(34)
Learning Outcomes
1(1)
1 Introduction
1(1)
2 Business Structures
2(10)
2.1 Sole Proprietorship (Sole Trader)
2(1)
2.2 General Partnership
3(1)
2.3 Limited Partnership
4(1)
2.4 Corporation (Limited Companies)
5(7)
3 Public and Private Corporations
12(11)
3.1 Exchange Listing and Share Ownership Transfer
13(2)
3.2 Share Issuance
15(3)
3.3 Going Public from Private---IPO, Direct Listing, Acquisition
18(2)
3.4 Life Cycle of Corporations
20(3)
4 Lenders and Owners
23(8)
4.1 Equity and Debt Risk-Return Profiles
25(6)
4.2 Equity vs. Debt Conflicts of Interest
31(1)
5 Summary
31(1)
6 Practice Problems
32(3)
Chapter 2 Introduction to Corporate Governance and Other ESG Considerations
35(46)
Learning Outcomes
35(1)
1 Introduction
36(1)
2 Stakeholder Groups
36(5)
2.1 Shareholder vs. Stakeholder Theory
37(1)
2.2 Shareholders
38(1)
2.3 Creditors/Debtholders
38(1)
2.4 Board of Directors
38(1)
2.5 Managers
39(1)
2.6 Employees
40(1)
2.7 Customers
40(1)
2.8 Suppliers
40(1)
2.9 Governments
40(1)
3 Principal-Agent and Other Relationships
41(10)
3.1 Shareholder and Manager/Director Relationships
42(2)
3.2 Controlling and Minority Shareholder Relationships
44(5)
3.3 Manager and Board Relationships
49(1)
3.4 Shareholder vs. Creditor (Debtholder) Interests
49(2)
4 Corporate Governance and Mechanisms to Manage Stakeholder Risks
51(12)
4.1 Shareholder Mechanisms
52(3)
4.2 Creditor Mechanisms
55(1)
4.3 Board of Director and Management Mechanisms
56(4)
4.4 Employee Mechanisms
60(1)
4.5 Customer and Supplier Mechanisms
60(1)
4.6 Government Mechanisms
61(2)
5 Corporate Governance and Stakeholder Management Risks and Benefits
63(6)
5.1 Operational Risks and Benefits
63(2)
5.2 Legal, Regulatory, or Reputational Risks and Benefits
65(1)
5.3 Financial Risks and Benefits
66(3)
6 ESG Considerations in Investment Analysis
69(4)
6.1 Introduction to Environmental and Social Factors
70(2)
6.2 Evaluating ESG-Related Risks and Opportunities
72(1)
7 Environmental, Social, and Governance Investment Approaches
73(4)
7.1 ESG Investment Approaches
73(4)
7.2 ESG Market Overview
77(1)
8 Summary
77(2)
9 Practice Problems
79(2)
Chapter 3 Working Capital & Liquidity
81(28)
Learning Outcomes
81(1)
1 Introduction
81(1)
2 Financing Options
82(7)
2.1 Internal Financing
83(2)
2.2 External Financing: Financial Intermediaries
85(2)
2.3 External Financing: Capital Markets
87(2)
3 Working Capital, Liquidity, and Short-Term Funding Needs
89(6)
4 Liquidity and Short-Term Funding
95(4)
4.1 Primary Sources of Liquidity
96(1)
4.2 Secondary Sources of Liquidity
96(2)
4.3 Drags and Pulls on Liquidity
98(1)
5 Measuring Liquidity
99(4)
6 Evaluating Short-Term Financing Choices
103(2)
7 Summary
105(1)
8 Practice Problems
105(4)
Chapter 4 Capital Investments
109(30)
Learning Outcomes
109(1)
1 Introduction
109(1)
2 Types of Capital Investments
110(4)
2.1 Business Maintenance
111(1)
2.2 Business Growth
112(2)
3 The Capital Allocation Process
114(5)
4 Investment Decision Criteria
119(6)
4.1 Net Present Value
119(3)
4.2 Internal Rate of Return
122(3)
5 Common Capital Allocation Pitfalls
125(1)
6 Corporate Use of Capital Allocation
126(3)
7 Real Options
129(3)
7.1 Timing Options
130(1)
7.2 Sizing Options
131(1)
7.3 Flexibility Options
131(1)
7.4 Fundamental Options
131(1)
8 Summary
132(1)
9 Practice Problems
133(6)
Chapter 5 Capital Structure
139(50)
Learning Outcomes
139(1)
1 Introduction
139(1)
2 Factors Affecting Capital Structure
140(11)
2.1 Internal Factors Affecting Capital Structure
141(3)
2.2 Existing Leverage
144(5)
2.3 External Factors Affecting Capital Structure
149(2)
3 Capital Structure and Company Life Cycle
151(6)
3.1 Background
151(1)
3.2 Start-Ups
152(1)
3.3 Growth Businesses
153(1)
3.4 Mature Businesses
154(2)
3.5 Unique Situations
156(1)
4 Modigliani-Miller Propositions
157(10)
4.1 MM Proposition I without Taxes: Capital Structure Irrelevance
159(1)
4.2 MM Proposition II without Taxes: Higher Financial Leverage Raises the Cost of Equity
160(3)
4.3 MM Propositions with Taxes: Firm Value
163(1)
4.4 MM Propositions with Taxes: Cost of Capital
163(2)
4.5 Costs of Financial Distress
165(2)
5 Optimal and Target Capital Structures
167(7)
5.1 Market Value vs. Book Value
169(1)
5.2 Target Weights and WACC
170(2)
5.3 Pecking Order Theory and Agency Costs
172(2)
6 Stakeholder Interests
174(9)
6.1 Debt vs. Equity Conflict
175(5)
6.2 Preferred Shareholders
180(1)
6.3 Management and Directors
181(2)
7 Summary
183(1)
8 Practice Problems
183(6)
Chapter 6 Measures of Leverage
189(30)
Learning Outcomes
189(1)
1 Introduction
189(1)
2 Leverage
190(2)
3 Business and Sales Risks
192(2)
3.1 Business Risk and Its Components
192(1)
3.2 Sales Risk
193(1)
4 Operating Risk and the Degree of Operating Leverage
194(7)
5 Financial Risk, the Degree of Financial Leverage and the Leveraging Role of Debt
201(4)
6 Total Leverage and the Degree of Total Leverage
205(3)
7 Breakeven Points and Operating Breakeven Points
208(3)
8 The Risks of Creditors and Owners
211(2)
9 Summary
213(1)
10 Practice Problems
214(5)
Chapter 7 Cost of Capital: Foundational Topics
219(30)
Learning Outcomes
219(1)
1 Introduction
219(1)
2 Cost of Capital
220(3)
2.1 Taxes and the Cost of Capital
222(1)
3 Costs of the Various Sources of Capital
223(9)
3.1 Cost of Debt
223(3)
3.2 Cost of Preferred Stock
226(2)
3.3 Cost of Common Equity
228(4)
4 Estimating Beta
232(5)
4.1 Estimating Beta for Public Companies
232(1)
4.2 Estimating Beta for Thinly Traded and Nonpublic Companies
233(4)
5 Flotation Costs
237(2)
6 Methods in Use
239(1)
7 Summary
240(1)
8 Practice Problems
241(8)
Chapter 8 Cost of Capital: Advanced Topics
249(54)
Learning Outcomes
249(1)
1 Introduction
249(1)
2 Cost of Capital Factors
250(11)
2.1 Top-Down External Factors
251(3)
2.2 Bottom-Up Company-Specific Factors
254(5)
2.3 Cost of Capital Factors Summary
259(2)
3 Estimating the Cost of Debt
261(7)
3.1 Traded Debt
262(1)
3.2 Non-Traded Debt
262(1)
3.3 Bank Debt
263(1)
3.4 Leases
264(2)
3.5 International Considerations
266(2)
4 The ERP
268(11)
4.1 Historical Approach
268(4)
4.2 Forward-Looking Approach
272(7)
5 The Cost of Equity (Required Return on Equity)
279(14)
5.1 DDMs
279(1)
5.2 Bond Yield Plus Risk Premium Approach
280(1)
5.3 Risk-Based Models
281(3)
5.4 Estimating the Cost of Equity for Private Companies
284(3)
5.5 International Considerations
287(3)
5.6 Required Return on Equity Summary
290(3)
6 Mini-Case 1
293(6)
6.1 Gretna Engines
293(6)
7 Mini-Case 2
299(1)
7.1 Precision Irrigation
299(1)
8 Practice Problems
300(3)
Chapter 9 Analysis of Dividends and Share Repurchases
303(56)
Learning Outcomes
303(1)
1 Dividends: Forms and Effects on Shareholder Wealth and Financial Ratios
304(7)
1.1 Dividends: Forms and Effects on Shareholder Wealth and Issuing Company's Financial Ratios
305(6)
2 Dividend Policy and Company Value: Theories
311(2)
2.1 Dividend Policy Does Not Matter
311(1)
2.2 Dividend Policy Matters: The Bird in the Hand Argument
312(1)
2.3 Dividend Policy Matters: The Tax Argument
313(1)
3 Other Theoretical Issues: Signaling
313(7)
3.1 The Information Content of Dividend Actions: Signaling
313(4)
3.2 Agency Costs and Dividends as a Mechanism to Control Them
317(3)
4 Other Theoretical Issues: Summary
320(1)
5 Factors Affecting Dividend Policy in Practice
320(7)
5.1 Investment Opportunities
320(1)
5.2 The Expected Volatility of Future Earnings
321(1)
5.3 Financial Flexibility
321(1)
5.4 Tax Considerations
322(2)
5.5 Flotation Costs
324(1)
5.6 Contractual and Legal Restrictions
325(1)
5.7 Factors Affecting Dividend Policy: Summary
326(1)
6 Payout Policies
327(5)
6.1 Stable Dividend Policy
327(2)
6.2 Constant Dividend Payout Ratio Policy
329(2)
6.3 Global Trends in Payout Policy
331(1)
7 Share Repurchases
332(6)
7.1 Share Repurchase Methods
332(2)
7.2 Financial Statement Effects of Repurchases
334(4)
8 Valuation Equivalence of Cash Dividends and Share Repurchase
338(1)
9 The Dividend versus Share Repurchase Decision
339(8)
10 Analysis of Dividend Safety
347(4)
11 Summary
351(2)
12 Practice Problems
353(6)
Chapter 10 Business Models & Risks
359(36)
Learning Outcomes
359(1)
1 Introductory Context/Motivation
359(1)
2 What Is a Business Model?
359(14)
2.1 Business Model Features
361(1)
2.2 Customers, Market: Who
361(1)
2.3 Firm Offering: What
362(1)
2.4 Channels: Where
362(3)
2.5 Pricing: How Much
365(3)
2.6 Value Proposition (Who + What + Where + How Much)
368(2)
2.7 Business Organization, Capabilities: How
370(2)
2.8 Profitability and Unit Economics
372(1)
3 Business Model Types
373(5)
3.1 Business Model Innovation
374(1)
3.2 Business Model Variations
374(1)
3.3 E-Commerce Business Models
375(1)
3.4 Network Effects and Platform Business Models
375(1)
3.5 Crowdsourcing Business Models
376(1)
3.6 Hybrid Business Models
376(2)
4 Business Models: Financial Implications
378(5)
4.1 External Factors
378(2)
4.2 Firm-Specific Factors
380(3)
5 Business Risks
383(1)
5.1 Summary
383(1)
6 Macro Risk, Business Risk, and Financial Risk
384(2)
6.1 Risk Impacts Are Cumulative
386(1)
7 Business Risk: A Closer Look
386(3)
7.1 Industry Risks
386(1)
7.2 Industry Definition
387(1)
7.3 Company-Specific Risks
387(2)
8 Financial Risk
389(3)
8.1 Measuring Operating and Financial Leverage
390(2)
9 Summary
392(1)
10 Practice Problems
392(3)
Chapter 11 The Firm and Market Structures
395(56)
Learning Outcomes
395(1)
1 Analysis of Market Structures
395(6)
1.1 Analysis of Market Structures
396(5)
2 Perfect Competition
401(2)
2.1 Demand Analysis in Perfectly Competitive Markets
401(2)
3 Elasticity of Demand
403(3)
4 Other Factors Affecting Demand
406(2)
5 Consumer Surplus: Value Minus Expenditure
408(2)
6 Supply Analysis, Optimal Price, and Output in Perfectly Competitive Markets
410(6)
6.1 Optimal Price and Output in Perfectly Competitive Markets
411(5)
7 Long-Run Equilibrium In Perfectly Competitive Markets
416(2)
8 Monopolistic Competition
418(3)
8.1 Demand Analysis in Monopolistically Competitive Markets
419(1)
8.2 Supply Analysis in Monopolistically Competitive Markets
420(1)
8.3 Optimal Price and Output in Monopolistically Competitive Markets
420(1)
9 Long-Run Equilibrium in Monopolistic Competition
421(1)
10 Oligopoly and Pricing Strategies
422(3)
10.1 Demand Analysis and Pricing Strategies in Oligopoly Markets
423(2)
11 The Cournot Assumption
425(3)
12 The Nash Equilibrium
428(3)
13 Oligopy Markets: Optimal Price, Output, and Long-Run Equilibrium
431(3)
13.1 Optimal Price and Output in Oligopoly Markets
432(1)
13.2 Factors Affecting Long-Run Equilibrium in Oligopoly Markets
433(1)
14 Monopoly Markets: Demand/Supply and Optimal Price/Output
434(6)
14.1 Demand Analysis in Monopoly Markets
435(1)
14.2 Supply Analysis in Monopoly Markets
436(2)
14.3 Optimal Price and Output in Monopoly Markets
438(2)
15 Price Discrimination and Consumer Surplus
440(2)
16 Monopoly Markets: Long-Run Equilibrium
442(1)
17 Identification of Market Structure
443(3)
17.1 Econometric Approaches
444(1)
17.2 Simpler Measures
444(2)
18 Summary
446(1)
19 Practice Problems
447(4)
Chapter 12 Introduction to Industry and Company Analysis
451(50)
Learning Outcomes
451(1)
1 Introduction
452(1)
2 Uses of Industry Analysis
452(1)
3 Approaches to Identifying Similar Companies
453(4)
3.1 Products and/or Services Supplied
453(1)
3.2 Business-Cycle Sensitivities
454(1)
3.3 Statistical Similarities
455(2)
4 Industry Classification Systems
457(8)
4.1 Commercial Industry Classification Systems
457(5)
4.2 Constructing a Peer Group
462(3)
5 Describing and Analyzing an Industry and Principles of Strategic Analysis
465(15)
5.1 Principles of Strategic Analysis
467(1)
5.2 Barriers to Entry
468(2)
5.3 Industry Concentration
470(2)
5.4 Industry Capacity
472(2)
5.5 Market Share Stability
474(1)
5.6 Price Competition
475(1)
5.7 Industry Life Cycle
476(4)
6 External Influences on Industry
480(9)
6.1 Macroeconomic Influences
480(1)
6.2 Technological Influences
480(2)
6.3 Demographic Influences
482(1)
6.4 Governmental Influences
482(1)
6.5 Social Influences
483(1)
6.6 Environmental Influences
483(3)
6.7 Industry Comparison
486(3)
7 Company Analysis
489(4)
7.1 Elements That Should Be Covered in a Company Analysis
490(2)
7.2 Spreadsheet Modeling
492(1)
8 Summary
493(3)
9 Practice Problems
496(5)
Chapter 13 Financial Statement Modeling
501(92)
Learning Outcomes
501(1)
1 Introduction
502(6)
1.1 Financial Statement Modeling: An Overview
502(6)
2 Income Statement Modeling: Operating Costs
508(4)
3 Modeling Operating Costs: Cost of Goods Sold and SG&A
512(8)
3.1 SG&A Expenses
514(6)
4 Modeling Non-operating Costs and Other Items
520(5)
4.1 Financing Expenses
520(1)
4.2 Corporate Income Tax
521(4)
4.3 Income Statement Modeling: Other Items
525(1)
5 Balance Sheet and Cash Flow Statement Modeling
525(6)
6 Building a Financial Statement Model
531(14)
6.1 Company Overview
531(2)
6.2 Revenue Forecast
533(1)
6.3 COGS
534(1)
6.4 SG&A Expenses and Other Operating Expense
534(1)
6.5 Operating Profit by Segment
535(2)
6.6 Non-Operating Items
537(1)
6.7 Corporate Income Tax Forecast
537(1)
6.8 Shares Outstanding
537(1)
6.9 Pro Forma Income Statement
538(2)
6.10 Pro Forma Statement of Cash Flows
540(1)
6.11 Capital Investments and Depreciation Forecasts
541(1)
6.12 Working Capital Forecasts
542(1)
6.13 Forecasted Cash Flow Statement
542(1)
6.14 Forecasted Balance Sheet
543(1)
6.15 Valuation Model Inputs
544(1)
7 Behavioral Finance and Analyst Forecasts
545(6)
7.1 Overconfidence in Forecasting
545(2)
7.2 Illusion of Control
547(1)
7.3 Conservatism Bias
548(1)
7.4 Representativeness Bias
549(2)
7.5 Confirmation Bias
551(1)
8 The Impact of Competitive Factors in Prices and Costs
551(10)
8.1 Cognac Industry Overview
552(9)
9 Inflation and Deflation
561(9)
9.1 Sales Projections with Inflation and Deflation
561(6)
9.2 Cost Projections with Inflation and Deflation
567(3)
10 Technological Developments
570(10)
11 Long-Term Forecasting
580(4)
11.1 Case Study: Estimating Normalized Revenue
580(4)
12 Summary
584(1)
13 Practice Problems
585(8)
Chapter 14 Corporate Restructurings
593(66)
Learning Outcomes
593(1)
1 Introduction
593(1)
2 Corporate Evolution, Actions, and Motivations
594(17)
2.1 Corporate Life Cycle and Actions
594(1)
2.2 Motivations for Corporate Structural Change
595(2)
2.3 Types of Corporate Restructurings
597(14)
3 Evaluating Corporate Restructurings
611(9)
3.1 Initial Evaluation
612(2)
3.2 Preliminary Valuation
614(6)
4 Modeling and Valuation
620(8)
4.1 Pro Forma Weighted Average Cost of Capital
622(6)
5 Evaluating Investment Actions
628(12)
5.1 Equity Investment
628(4)
5.2 Joint Venture
632(4)
5.3 Acquisition
636(4)
6 Evaluating Divestment Actions
640(7)
7 Evaluating Restructuring Actions
647(6)
8 Summary
653(1)
9 Practice Problems
654(5)
Chapter 15 Environmental, Social, and Governance (ESG) Considerations in Investment Analysis
659(30)
Learning Outcomes
659(1)
1 Introduction
659(1)
2 Ownership Structures and Their Effects on Corporate Governance
660(6)
2.1 Dispersed vs. Concentrated Ownership
660(2)
2.2 Conflicts within Different Ownership Structures
662(1)
2.3 Types of Influential Shareholders
663(2)
2.4 Effects of Ownership Structure on Corporate Governance
665(1)
3 Evaluating Corporate Governance Policies and Procedures
666(4)
3.1 Board Policies and Practices
667(2)
3.2 Executive Remuneration
669(1)
3.3 Shareholder Voting Rights
669(1)
4 Identifying ESG-Related Risks and Opportunities
670(6)
4.1 Materiality and Investment Horizon
670(1)
4.2 Relevant ESG-Related Factors
670(6)
5 Evaluating ESG-Related Risks and Opportunities
676(9)
5.1 ESG Integration
676(1)
5.2 Examples of ESG Integration
677(8)
6 Summary
685(1)
7 Practice Problems
686(3)
Chapter 16 Intercorporate Investments
689(54)
Learning Outcomes
689(1)
1 Introduction
689(1)
2 Basic Corporate Investment Categories
690(2)
3 Investments In Financial Assets: IFRS 9
692(3)
3.1 Classification and Measurement
692(2)
3.2 Reclassification of Investments
694(1)
4 Investments in Associates and Joint Ventures
695(5)
4.1 Equity Method of Accounting: Basic Principles
696(4)
5 Amortization of Excess Purchase Price, Fair Value Option, and Impairment
700(5)
5.1 Amortization of Excess Purchase Price
701(3)
5.2 Fair Value Option
704(1)
5.3 Impairment
704(1)
6 Transactions with Associates and Disclosure
705(4)
6.1 Disclosure
708(1)
6.2 Issues for Analysts
708(1)
7 Acquisition Method
709(7)
7.1 Acquisition Method
711(2)
7.2 Impact of the Acquisition Method on Financial Statements, Post-Acquisition
713(3)
8 The Consolidation Process
716(6)
8.1 Business Combination with Less Than 100% Acquisition
716(1)
8.2 Non-controlling (Minority) Interests: Balance Sheet
716(3)
8.3 Non-controlling (Minority) Interests: Income Statement
719(1)
8.4 Goodwill Impairment
720(2)
9 Financial Statement Presentation
722(3)
10 Variable Interest and Special Purpose Entities
725(4)
10.1 Securitization of Assets
727(2)
11 Additional Issues in Business Combinations That impair Comparability
729(1)
11.1 Contingent Assets and Liabilities
729(1)
11.2 Contingent Consideration
729(1)
11.3 In-Process R&D
730(1)
11.4 Restructuring Costs
730(1)
12 Summary
730(1)
13 Practice Problems
731(12)
Glossary 743(14)
References 757(6)
About the Authors 763(6)
About the CFA Program 769(2)
Index 771
About CFA Institute

CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors interests come first, markets function at their best, and economies grow. CFA Institute has more than 170,000 members in 160+ countries and territories, including 163,000 CFA® charterholders, and 150+ member societies. For more information, visit www.cfainstitute.org.