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• Title
• Copyright
• Dedication
• Brief Contents
• Detailed Contents
• About the Authors
• Bridging Theory and Practice
• Applications That Reflect Real Practice
• Teaching Every Student to Think Finance
• Practice Finance to Learn Finance
• Preface
• Part 1: Introduction
• Chapter 1. Corporate Finance and the Financial Manager
• 1.1 Why Study Finance?
• 1.2 The Four Types of Firms
• Sole Proprietorships
• Partnerships
• Limited Liability Companies
• Corporations
• Tax Implications for Corporate Entities
• Corporate Taxation Around the World
• 1.3 The Financial Manager
• Making Investment Decisions
• Global Financial Crisis The Dodd-Frank Act
• Making Financing Decisions
• Managing Short-Term Cash Needs
• The Goal of the Financial Manager
• Shareholder Value Versus Stakeholder Value
• 1.4 The Financial Manager’s Place in the Corporation
• The Corporate Management Team
• Ethics and Incentives in Corporations
• Global Financial Crisis The Dodd-Frank Act on Corporate Compensation and Governance
• Citizens United v. Federal Election Commission
• 1.5 The Stock Market
• The Largest Stock Markets
• Primary Versus Secondary Markets
• Traditional Trading Venues
• Interview With Frank Hatheway
• New Competition and Market Changes
• Dark Pools
• Listing Standards
• Other Financial Markets
• NYSE, BATS, DJIA, S&P 500: Awash in Acronyms
• 1.6 Financial Institutions
• The Financial Cycle
• Types of Financial Institutions
• Role of Financial Institutions
• Summary
• Problems
• Chapter 2. Introduction to Financial Statement Analysis
• 2.1 Firms’ Disclosure of Financial Information
• Preparation of Financial Statements
• I nternational Financial Reporting Standards
• Interview With Ruth Porat
• Types of Financial Statements
• 2.2 The Balance Sheet
• Assets
• Liabilities
• Stockholders’ Equity
• Market Value Versus Book Value
• Market-to-Book Ratio
• Enterprise Value
• 2.3 The Income Statement
• Earnings Calculations
• EBITDA
• 2.4 The Statement of Cash Flows
• Operating Activity
• Investment Activity
• Financing Activity
• 2.5 Other Financial Statement Information
• Statement of Stockholders’ Equity
• Management Discussion and Analysis
• Notes to the Financial Statements
• 2.6 Financial Statement Analysis
• Profitability Ratios
• Liquidity Ratios
• Asset Efficiency
• Working Capital Ratios
• Interest Coverage Ratios
• Leverage Ratios
• Valuation Ratios
• Common Mistake Mismatched Ratios
• Operating Returns
• The DuPont Identity
• 2.7 Financial Reporting in Practice
• Enron
• The Sarbanes-Oxley Act
• Dodd-Frank Act
• Global Financial Crisis Bernard Madoff’s Ponzi Scheme
• The Financial Statements: A Useful Starting Point
• Summary
• Critical Thinking
• Problems
• Data Case
• Part 2: Interest Rates and Valuing Cash Flows
• Chapter 3. Time Value of Money: An Introduction
• 3.1 Cost-Benefit Analysis
• Role of the Financial Manager
• Quantifying Costs and Benefits
• 3.2 Market Prices and the Valuation Principle
• The Valuation Principle
• Why There Can Be Only One Competitive Price for a Good
• Your Personal Financial Decisions
• 3.3 The Time Value of Money and Interest Rates
• The Time Value of Money
• The Interest Rate: Converting Cash Across Time
• Timelines
• 3.4 Valuing Cash Flows at Different Points in Time
• Rule 1: Comparing and Combining Values
• Common Mistake Summing Cash Flows Across Time
• Rule 2: Compounding
• Rule of 72
• Rule 3: Discounting
• Using a Financial Calculator
• Summary
• Critical Thinking
• Problems
• Chapter 4. Time Value of Money: Valuing Cash Flow Streams
• 4.1 Valuing a Stream of Cash Flows
• Applying the Rules of Valuing Cash Flows to a Cash Flow Stream
• Using a Financial Calculator: Solving for Present and Future Values of Cash Flow Streams
• 4.2 Perpetuities
• Perpetuities
• Historical Examples of Perpetuities
• Common Mistake Discounting One Too Many Times
• 4.3 Annuities
• Present Value of an Annuity
• Future Value of an Annuity
• 4.4 Growing Cash Flows
• Growing Perpetuity
• Growing Annuity
• 4.5 Solving for Variables Other Than Present Value or Future Value
• Solving for the Cash Flows
• Rate of Return
• Solving for the Number of Periods
• 4.6 Non-Annual Cash Flows
• The Big Picture
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 4 Appendix Using a Financial Calculator
• Chapter 5. Interest Rates
• 5.1 Interest Rate Quotes and Adjustments
• The Effective Annual Rate
• Adjusting the Discount Rate to Different Time Periods
• Annual Percentage Rates
• Common Mistake Using the EAR in the Annuity Formula
• 5.2 Application: Discount Rates and Loans
• Computing Loan Payments
• Global Financial Crisis Teaser Rates and Subprime Loans
• Computing the Outstanding Loan Balance
• 5.3 The Determinants of Interest Rates
• Inflation and Real Versus Nominal Rates
• Investment and Interest Rate Policy
• How Is Inflation Actually Calculated?
• The Yield Curve and Discount Rates
• Interview With Dr. Janet Yellen
• Common Mistake Using the Annuity Formula When Discount Rates Vary
• The Yield Curve and the Economy
• 5.4 The Opportunity Cost of Capital
• Interest Rates, Discount Rates, and the Cost of Capital
• Common Mistake States Dig a $3 Trillion Hole by Discounting at the Wrong Rate
• Summary
• Critical Thinking
• Problems
• Chapter 6. Bonds
• 6.1 Bond Terminology
• 6.2 Zero-Coupon Bonds
• Zero-Coupon Bond Cash Flows
• Yield to Maturity of a Zero-Coupon Bond
• Global Financial Crisis Negative Bond Yields
• Risk-Free Interest Rates
• 6.3 Coupon Bonds
• Coupon Bond Cash Flows
• The U.S. Treasury Market
• Yield to Maturity of a Coupon Bond
• Finding Bond Prices on the Web
• Coupon Bond Price Quotes
• 6.4 Why Bond Prices Change
• Interest Rate Changes and Bond Prices
• Time and Bond Prices
• Interest Rate Risk and Bond Prices
• Clean and Dirty Prices for Coupon Bonds
• Bond Prices in Practice
• 6.5 Corporate Bonds
• Credit Risk
• Are Treasuries Really Default-Free Securities?
• Interview With Lisa Black
• Corporate Bond Yields
• Bond Ratings
• Corporate Yield Curves
• The Credit Crisis and Bond Yields
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 6 Appendix A Solving for the Yield to Maturity of a Bond Using a Financial Calculator
• Chapter 6 Appendix B The Yield Curve and the Law of One Price
• Chapter 7. Stock Valuation
• 7.1 Stock Basics
• Stock Market Reporting: Stock Quotes
• Common Stock
• Preferred Stock
• 7.2 The Mechanics of Stock Trades
• 7.3 The Dividend-Discount Model
• A One-Year Investor
• Dividend Yields, Capital Gains, and Total Returns
• A Multiyear Investor
• Dividend-Discount Model Equation
• 7.4 Estimating Dividends in the Dividend-Discount Model
• Constant Dividend Growth
• Dividends Versus Investment and Growth
• Changing Growth Rates
• Common Mistake Forgetting to “Grow” This Year’s Dividend
• Value Drivers and the Dividend-Discount Model
• 7.5 Limitations of the Dividend-Discount Model
• Uncertain Dividend Forecasts
• Non-Dividend-Paying Stocks
• 7.6 Share Repurchases and the Total Payout Model
• 7.7 Putting It All Together
• Summary
• Critical Thinking
• Problems
• Part 2 Integrative Case
• Part 3: Valuation and the Firm
• Chapter 8. Investment Decision Rules
• 8.1 The NPV Decision Rule
• Net Present Value
• The NPV Decision Rule
• 8.2 Using the NPV Rule
• Organizing the Cash Flows and Computing the NPV
• The NPV Profile
• Measuring Sensitivity with IRR
• Alternative Rules Versus the NPV Rule
• 8.3 Alternative Decision Rules
• Using Excel Computing NPV and IRR
• The Payback Rule
• The Internal Rate of Return Rule
• Common Mistake IRR Versus the IRR Rule
• Modified Internal Rate of Return
• Why Do Rules Other Than the NPV Rule Persist?
• 8.4 Choosing Among Projects
• Differences in Scale
• Interview With Dick Grannis
• Timing of the Cash Flows
• 8.5 Evaluating Projects with Different Lives
• Important Considerations When Using the Equivalent Annual Annuity
• 8.6 Choosing Among Projects When Resources Are Limited
• Evaluating Projects with Different Resource Requirements
• 8.7 Putting It All Together
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 8 Appendix Creating the NPV Profile Using Excel’s Data Table Function
• Chapter 9. Fundamentals of Capital Budgeting
• 9.1 The Capital Budgeting Process
• 9.2 Forecasting Incremental Earnings
• Operating Expenses Versus Capital Expenditures
• Incremental Revenue and Cost Estimates
• Taxes
• Incremental Earnings Forecast
• 9.3 Determining Incremental Free Cash Flow
• Converting from Earnings to Free Cash Flow
• Calculating Free Cash Flow Directly
• Calculating the NPV
• Using Excel Capital Budgeting Using a Spreadsheet Program
• 9.4 Other Effects on Incremental Free Cash Flows
• Opportunity Costs
• Common Mistake The Opportunity Cost of an Idle Asset
• Project Externalities
• Sunk Costs
• Common Mistake The Sunk Cost Fallacy
• Adjusting Free Cash Flow
• Replacement Decisions
• 9.5 Analyzing the Project
• Sensitivity Analysis
• Break-Even Analysis
• Interview With David Holland
• Scenario Analysis
• Using Excel Project Analysis Using Excel
• 9.6 Real Options in Capital Budgeting
• Option to Delay
• Option to Expand
• Option to Abandon
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 9 Appendix MACRS Depreciation
• Chapter 10. Stock Valuation: A Second Look
• 10.1 The Discounted Free Cash Flow Model
• Valuing the Enterprise
• Implementing the Model
• Connection to Capital Budgeting
• 10.2 Valuation Based on Comparable Firms
• Valuation Multiples
• Limitations of Multiples
• Comparison with Discounted Cash Flow Methods
• 10.3 Stock Valuation Techniques: A Final Word
• Interview With Douglas Kehring
• 10.4 Information, Competition, and Stock Prices
• Information in Stock Prices
• Competition and Efficient Markets
• Forms of Market Efficiency
• Lessons for Investors and Corporate Managers
• Nobel Prize The 2013 Prize: An Enigma?
• The Efficient Markets Hypothesis Versus No Arbitrage
• 10.5 Individual Biases and Trading
• Excessive Trading and Overconfidence
• Hanging On to Losers and the Disposition Effect
• Investor Attention, Mood, and Experience
• Summary
• Critical Thinking
• Problems
• Data Case
• Part 3 Integrative Case
• Part 4: Risk and Return
• Chapter 11. Risk and Return in Capital Markets
• 11.1 A First Look at Risk and Return
• 11.2 Historical Risks and Returns of Stocks
• Computing Historical Returns
• Average Annual Returns
• Arithmetic Average Returns Versus Compound Annual Returns
• The Variance and Volatility of Returns
• Common Mistake Mistakes When Computing Standard Deviation
• Using Excel Computing the Standard Deviation of Historical Returns
• The Normal Distribution
• 11.3 The Historical Tradeoff Between Risk and Return
• The Returns of Large Portfolios
• The Returns of Individual Stocks
• 11.4 Common Versus Independent Risk
• Theft Versus Earthquake Insurance: An Example
• Types of Risk
• 11.5 Diversification in Stock Portfolios
• Unsystematic Versus Systematic Risk
• Global Financial Crisis Diversification Benefits During Market Crashes
• Diversifiable Risk and the Risk Premium
• The Importance of Systematic Risk
• Common Mistake A Fallacy of Long-Run Diversification
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 12. Systematic Risk and the Equity Risk Premium
• 12.1 The Expected Return of a Portfolio
• Portfolio Weights
• Portfolio Returns
• Expected Portfolio Return
• 12.2 The Volatility of a Portfolio
• Diversifying Risks
• Measuring Stocks’ Co-Movement: Correlation
• Using Excel Calculating the Correlation Between Two Sets of Returns
• Computing a Portfolio’s Variance and Standard Deviation
• The Volatility of a Large Portfolio
• Nobel Prize Harry Markowitz
• 12.3 Measuring Systematic Risk
• Role of the Market Portfolio
• Stock Market Indexes as the Market Portfolio
• Market Risk and Beta
• Index Funds
• Common Mistake Mixing Standard Deviation and Beta
• Estimating Beta from Historical Returns
• Using Excel Calculating a Stock’s Beta
• 12.4 Putting It All Together: The Capital Asset Pricing Model
• The CAPM Equation Relating Risk to Expected Return
• Why Not Estimate Expected Returns Directly?
• Nobel Prize William Sharpe
• The Security Market Line
• The CAPM and Portfolios
• Summary of the Capital Asset Pricing Model
• The Big Picture
• Summary
• Critical Thinking
• Problems
• Chapter 12 Appendix Alternative Models of Systematic Risk
• Chapter 13. The Cost of Capital
• 13.1 A First Look at the Weighted Average Cost of Capital
• The Firm’s Capital Structure
• Opportunity Cost and the Overall Cost of Capital
• Weighted Averages and the Overall Cost of Capital
• Weighted Average Cost of Capital Calculations
• 13.2 The Firm’s Costs of Debt and Equity Capital
• Cost of Debt Capital
• Common Mistake Using the Coupon Rate as the Cost of Debt
• Cost of Preferred Stock Capital
• Cost of Common Stock Capital
• 13.3 A Second Look at the Weighted Average Cost of Capital
• WACC Equation
• Weighted Average Cost of Capital in Practice
• Methods in Practice
• 13.4 Using the WACC to Value a Project
• Key Assumptions
• WACC Method Application: Extending the Life of an AT&T Facility
• Summary of the WACC Method
• 13.5 Project-Based Costs of Capital
• Common Mistake Using a Single Cost of Capital in Multi-Divisional Firms
• Cost of Capital for a New Acquisition
• Divisional Costs of Capital
• Interview With Shelagh Glaser
• 13.6 When Raising External Capital Is Costly
• Summary
• Critical Thinking
• Problems
• Data Case
• Part 4 Integrative Case
• Part 5: Long-Term Financing
• Chapter 14. Raising Equity Capital
• 14.1 Equity Financing for Private Companies
• Sources of Funding
• Interview With Kevin Laws
• Crowdfunding: The Wave of the Future?
• Securities and Valuation
• Exiting an Investment in a Private Company
• 14.2 Taking Your Firm Public: The Initial Public Offering
• Advantages and Disadvantages of Going Public
• Primary and Secondary IPO Offerings
• Other IPO Types
• Google’s IPO
• An Alternative to the Traditional IPO: Spotify’s Direct Listing
• 14.3 IPO Puzzles
• Underpriced IPOs
• “Hot” and “Cold” IPO Markets
• Global Financial Crisis 2008–2009: A Very Cold IPO Market
• High Cost of Issuing an IPO
• Poor Post-IPO Long-Run Stock Performance
• 14.4 Raising Additional Capital: The Seasoned Equity Offering
• SEO Process
• SEO Price Reaction
• SEO Costs
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 15. Debt Financing
• 15.1 Corporate Debt
• Private Debt
• Debt Financing at Hertz: Bank Loans
• Debt Financing at Hertz: Private Placements
• Public Debt
• Debt Financing at Hertz: Public Debt
• 15.2 Other Types of Debt
• Sovereign Debt
• Municipal Bonds
• Detroit’s Art Museum at Risk
• Asset-Backed Securities
• Global Financial Crisis CDOs, Subprime Mortgages, and the Financial Crisis
• 15.3 Bond Covenants
• Types of Covenants
• Advantages of Covenants
• Application: Hertz’s Covenants
• 15.4 Repayment Provisions
• Call Provisions
• New York City Calls Its Municipal Bonds
• Sinking Funds
• Convertible Provisions
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 15 Appendix Using a Financial Calculatorto Calculate Yield to Call
• Part 5 Integrative Case
• Part 6: Capital Structure and Payout Policy
• Chapter 16. Capital Structure
• 16.1 Capital Structure Choices
• Capital Structure Choices Across Industries
• Capital Structure Choices Within Industries
• 16.2 Capital Structure in Perfect Capital Markets
• Application: Financing a New Business
• Leverage and Firm Value
• The Effect of Leverage on Risk and Return
• Homemade Leverage
• Leverage and the Cost of Capital
• Common Mistake Capital Structure Fallacies
• Global Financial Crisis Bank Capital Regulation and the ROE Fallacy
• MM and the Real World
• Nobel Prize Franco Modigliani and Merton Miller
• 16.3 Debt and Taxes
• The Interest Tax Deduction and Firm Value
• Value of the Interest Tax Shield
• The Interest Tax Shield with Permanent Debt 541
• Leverage and the WACC with Taxes
• Debt and Taxes: The Bottom Line
• 16.4 The Costs of Bankruptcy and Financial Distress
• Direct Costs of Bankruptcy
• Bankruptcy Can Be Expensive
• Indirect Costs of Financial Distress
• 16.5 Optimal Capital Structure: The Tradeoff Theory
• Differences Across Firms
• Optimal Leverage
• 16.6 Additional Consequences of Leverage: Agency Costs and Information
• Agency Costs
• Airlines Use Financial Distress to Their Advantage
• Global Financial Crisis Moral Hazard and Government Bailouts
• Financial Distress and Rolling the Dice, Literally
• Debt and Information
• 16.7 Capital Structure: Putting It All Together
• Summary
• Critical Thinking
• Problems
• Chapter 16 Appendix The Bankruptcy Code
• Chapter 17. Payout Policy
• 17.1 Cash Distributions to Shareholders
• Dividends
• Share Repurchases
• 17.2 Dividends Versus Share Repurchases in a Perfect Capital Market
• Alternative Policy 1: Pay a Dividend with Excess Cash
• Alternative Policy 2: Share Repurchase (No Dividend)
• Common Mistake Repurchases and the Supply of Shares
• Alternative Policy 3: High Dividend (Equity Issue)
• Modigliani-Miller and Dividend Policy Irrelevance
• Common Mistake The Bird in the Hand Fallacy
• Dividend Policy with Perfect Capital Markets
• 17.3 The Tax Disadvantage of Dividends
• Taxes on Dividends and Capital Gains
• Optimal Dividend Policy with Taxes
• Tax Differences Across Investors
• 17.4 Payout Versus Retention of Cash
• Retaining Cash with Perfect Capital Markets
• Retaining Cash with Imperfect Capital Markets
• 17.5 Signaling with Payout Policy
• Dividend Smoothing
• Dividend Signaling
• Royal & SunAlliance’s Dividend Cut
• Signaling and Share Repurchases
• Interview With John Connors
• 17.6 Stock Dividends, Splits, and Spin-Offs
• Stock Dividends and Splits
• Berkshire Hathaway’s A and B Shares
• Spin-Offs
• 17.7 Advice for the Financial Manager
• Summary
• Critical Thinking
• Problems
• Data Case
• Part 6 Integrative Case
• Part 7: Financial Planning and Forecasting
• Chapter 18. Financial Modeling and Pro Forma Analysis
• 18.1 Goals of Long-Term Financial Planning
• Identify Important Linkages
• Analyze the Impact of Potential Business Plans
• Plan for Future Funding Needs
• 18.2 Forecasting Financial Statements: The Percent of Sales Method
• Percent of Sales Method
• Pro Forma Income Statement
• Pro Forma Balance Sheet
• Common Mistake Confusing Stockholders’ Equity with Retained Earnings
• Making the Balance Sheet Balance: Net New Financing
• Choosing a Forecast Target
• 18.3 Forecasting a Planned Expansion
• KMS Designs’ Expansion: Financing Needs
• KMS Designs’ Expansion: Pro Forma Income Statement
• Common Mistake Treating Forecasts as Fact
• Forecasting the Balance Sheet
• 18.4 Growth and Firm Value
• Sustainable Growth Rate and External Financing
• 18.5 Valuing the Expansion
• Forecasting Free Cash Flows
• Common Mistake Confusing Totaland Incremental Net Working Capital
• KMS Designs’ Expansion: Effect on Firm Value
• Optimal Timing and the Option to Delay
• Summary
• Critical Thinking
• Problems
• Chapter 18 Appendix The Balance Sheetand Statement of Cash Flows
• Chapter 19. Working Capital Management
• 19.1 Overview of Working Capital
• The Cash Cycle
• Working Capital Needs by Industry
• Firm Value and Working Capital
• 19.2 Trade Credit
• Trade Credit Terms
• Trade Credit and Market Frictions
• Common Mistake Using APR Instead of EARto Compute the Cost of Trade Credit
• Managing Float
• 19.3 Receivables Management
• Determining the Credit Policy
• The 5 C’s of Credit
• Monitoring Accounts Receivable
• 19.4 Payables Management
• Determining Accounts Payable Days Outstanding
• Stretching Accounts Payable
• 19.5 Inventory Management
• Benefits of Holding Inventory
• Costs of Holding Inventory
• Inventory Management Adds to the Bottom Line at Gap
• 19.6 Cash Management
• Motivation for Holding Cash
• Alternative Investments
• Hoarding Cash
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 20. Short-Term Financial Planning
• 20.1 Forecasting Short-Term Financing Needs
• Application: Springfield Snowboards, Inc.
• Negative Cash Flow Shocks
• Positive Cash Flow Shocks
• Seasonalities
• The Cash Budget
• 20.2 The Matching Principle
• Permanent Working Capital
• Temporary Working Capital
• Permanent Versus Temporary Working Capital
• Financing Policy Choices
• 20.3 Short-Term Financing with Bank Loans
• Single, End-of-Period Payment Loan
• Line of Credit
• Bridge Loan
• Common Loan Stipulations and Fees
• 20.4 Short-Term Financing with Commercial paper
• Short-Term Financing and the Financial Crisis of the Fall of 2008
• 20.5 Short-Term Financing with Secured Financing
• Accounts Receivable as Collateral
• A Seventeenth-Century Financing Solution
• Inventory as Collateral
• Loan Guarantees: The Ex-Im Bank Controversy
• 20.6 Putting It All Together: Creating a Short-Term Financial Plan
• Summary
• Critical Thinking
• Problems
• Part 7 Integrative Case
• Part 8: Special Topics
• Chapter 21. Option Applications and Corporate Finance
• 21.1 Option Basics
• Option Contracts
• Stock Option Quotations
• Options on Other Financial Securities
• Options Are for More Than Just Stocks
• 21.2 Option Payoffs at Expiration
• The Long Position in an Option Contract
• The Short Position in an Option Contract
• Profits for Holding an Option to Expiration
• Returns for Holding an Option to Expiration
• 21.3 Factors Affecting Option Prices
• Strike Price and Stock Price
• Option Prices and the Exercise Date
• Option Prices and the Risk-Free Rate
• Option Prices and Volatility
• 21.4 The Black-Scholes Option Pricing Formula
• 21.5 Put-Call Parity
• Portfolio Insurance
• 21.6 Options and Corporate Finance
• Summary
• Critical Thinking
• Problems
• Data Case
• Chapter 22. Mergers and Acquisitions
• 22.1 Background and Historical Trends
• Merger Waves
• Types of Mergers
• 22.2 Market Reaction to a Takeover
• 22.3 Reasons to Acquire
• Economies of Scale and Scope
• Vertical Integration
• Expertise
• Monopoly Gains
• Efficiency Gains
• Tax Savings from Operating Losses
• Diversification
• Earnings Growth
• Managerial Motives to Merge
• 22.4 The Takeover Process
• Valuation
• The Offer
• Merger “Arbitrage”
• Tax and Accounting Issues
• Board and Shareholder Approval
• 22.5 Takeover Defenses
• Poison Pills
• Staggered Boards
• White Knights
• Golden Parachutes
• Recapitalization
• Other Defensive Strategies
• Regulatory Approval
• Weyerhaeuser’s Hostile Bid for Willamette Industries
• 22.6 Who Gets the Value Added from a Takeover?
• The Free Rider Problem
• Toeholds
• The Leveraged Buyout
• The Leveraged Buyout of RJR-Nabisco by KKR
• The Freezeout Merger
• Competition
• Summary
• Critical Thinking
• Problems
• Chapter 23. International Corporate Finance
• 23.1 Foreign Exchange
• The Foreign Exchange Market
• Exchange Rates
• 23.2 Exchange Rate Risk
• Exchange Rate Fluctuations
• Brexit
• Hedging with Forward Contracts
• Cash-and-Carry and the Pricing of Currency Forwards
• Hedging Exchange Rate Risk with Options
• 23.3 Internationally Integrated Capital Markets
• Common Mistake Forgetting to Flip theExchange Rate
• 23.4 Valuation of Foreign Currency Cash Flows
• Application: Ityesi, Inc.
• The Law of One Price as a Robustness Check
• 23.5 Valuation and International Taxation
• The TCJA: A New Approach to International Taxation
• 23.6 Internationally Segmented Capital Markets
• Differential Access to Markets
• Macro-Level Distortions
• Implications of Internationally Segmented Capital Markets
• 23.7 Capital Budgeting with Exchange Rate Risk
• Application: Ityesi, Inc.
• Conclusion
• Summary
• Critical Thinking
• Problems
• Data Case
• Index
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• D
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