Financial Times Handbook of Corporate Finance, The

<p>Table of Contents</p> <p>CONTENTS</p> <p>Introduction</p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Some of the financial issues covered</p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The scope of corporate finance</p> <p>&nbsp;</p> <p>Chapter 1. What is the firm’s objective?</p> <ul> <li>A common purpose</li> <li>The assumed objective of finance </li> <li>Why should we aim for shareholder wealth? </li> <li>What is shareholder wealth? </li> <li>Profit maximisation is not the same as shareholder wealth maximisation </li> <li>Getting manager’s objectives aligned with shareholder’s objectives </li> <li>What happens if control over directors is weak?</li> <li>Conclusion</li> </ul> <p>&nbsp;</p> <p>&nbsp;</p> <p>PART 1 – IINVESTING IN PROJECTS?&nbsp;</p> <p>&nbsp;</p> <p>Chapter 2. State-of-the-art project assessment techniques</p> <ul> <li>How do you know whether an investment generates value for shareholders? </li> <li>State-of-the-art technique 1: net present value </li> <li>State-of-the-art technique 2: internal rate of return</li> <li>Choosing between NPV and IRR</li> <li>Appendix 2.1 Mathematical tools for finance</li> </ul> <p>&nbsp;</p> <p>Chapter 3. Traditional appraisal techniques&nbsp;</p> <ul> <li>What appraisal techniques businesses actually use </li> <li>Payback </li> <li>Accounting rate of return </li> <li>Internal rate of return: reason for continued popularity</li> </ul> <p>&nbsp;</p> <p>Chapter 4. Investment decision-making in companies&nbsp;</p> <ul> <li>The managerial art of investment selection </li> <li>More tricky issues in real world project appraisal</li> <li>The stages of investment decision making</li> </ul> <p>&nbsp;</p> <p>Chapter 5. Allowing for risk in project appraisal&nbsp;</p> <ul> <li>What is risk? </li> <li>Adjusting for risk through the discount rate </li> <li>Sensitivity analysis </li> <li>Scenario analysis </li> <li>Probability analysis</li> <li>Problems with using probability analysis</li> <li>Evidence of risk analysis in practice</li> </ul> <p>&nbsp;</p> <p>PART 2 SHAREHOLDER VALUE&nbsp;</p> <p>Chapter 6. Value managed companies versus earnings managed companies</p> <ul> <li>The pervasiveness of the value approach </li> <li>Case studies: FT100 companies creating value and destroying value </li> <li>Why shareholder value? </li> <li>Three steps to value</li> <li>Earnings-based management’s failings </li> <li>ROCE has failings </li> <li>Focusing on earnings is not the same as value </li> <li>How a business creates value </li> <li>The five actions to create value </li> </ul> <p>&nbsp;</p> <p>Chapter 7. Value through strategy</p> <ul> <li>Value principles touch every corner of the business</li> <li>Strategic business unit management</li> <li>The firm’s objective</li> <li>Strategic assessment </li> <li>Strategic choice </li> <li>Strategy implementation </li> <li>What use is the head office? </li> <li>Targets and motivation</li> </ul> <p>&nbsp;</p> <p>Chapter 8. Value creation within strategic business units</p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Using cash flow to measure value </p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shareholder value analysis </p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Economic profit </p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Economic value added (EVA) </p> <p>·&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash flow return on investment</p> <p>&nbsp;</p> <p>Chapter 9. Entire firm value measurement&nbsp;</p> <ul> <li>Total shareholder return </li> <li>Wealth added index </li> <li>Market added value </li> <li>Market to book ratio </li> </ul> <p>&nbsp;</p> <p>Chapter 10. What is the company’s cost of capital?</p> <ul> <li>A word of warning</li> <li>The required rate of return </li> <li>Two sides of the same coin</li> <li>The weighted average cost of capital</li> <li>The cost of equity capital </li> <li>The cost of retained earnings </li> <li>Debt capital </li> <li>The cost of preference share capital</li> <li>Hybrid secu</li> </ul>