A discussion-based learning approach to corporate finance fundamentals Lessons in Corporate Finance explains the fundamentals of the field in an intuitive way, using a unique Socratic question and answer approach. Written by award-winning professors at M.I.T. and Tufts, this book draws on years of research and teaching to deliver a truly interactive learning experience. Each case study is designed to facilitate class discussion, based on a series of increasingly detailed questions and answers that reinforce conceptual insights with numerical examples. Complete coverage of all areas of corporate finance includes capital structure and financing needs along with project and company valuation, with specific guidance on vital topics such as ratios and pro formas, dividends, debt maturity, asymmetric information, and more. Corporate finance is a complex field composed of a broad variety of sub-disciplines, each involving a specific skill set and nuanced body of knowledge. This text is designed to give you an intuitive understanding of the fundamentals to provide a solid foundation for more advanced study. Identify sources of funding and corporate capital structure Learn how managers increase the firm's value to shareholders Understand the tools and analysis methods used for allocation Explore the five methods of valuation with free cash flow to firm and equity Navigating the intricate operations of corporate finance requires a deep and instinctual understanding of the broad concepts and practical methods used every day. Interactive, discussion-based learning forces you to go beyond memorization and actually apply what you know, simultaneously developing your knowledge, skills, and instincts. Lessons in Corporate Finance provides a unique opportunity to go beyond traditional textbook study and gain skills that are useful in the field.
Autorentext
PAUL ASQUITH is the Gordon Y. Billard professor of finance at M.I.T.'s Sloan School. He is a specialist in corporate finance and has written on all areas of corporate finance including mergers, LBOs, equity issues, dividend policy, and more.
LAWRENCE A. WEISS is professor of International Accounting at The Fletcher School of Law and Diplomacy at Tufts University. He is a specialist in accounting and finance and has written on corporate bankruptcy, firm performance, international accounting, mergers, and more.
Zusammenfassung
A discussion-based learning approach to corporate finance fundamentals
Lessons in Corporate Finance explains the fundamentals of the field in an intuitive way, using a unique Socratic question and answer approach. Written by award-winning professors at M.I.T. and Tufts, this book draws on years of research and teaching to deliver a truly interactive learning experience. Each case study is designed to facilitate class discussion, based on a series of increasingly detailed questions and answers that reinforce conceptual insights with numerical examples. Complete coverage of all areas of corporate finance includes capital structure and financing needs along with project and company valuation, with specific guidance on vital topics such as ratios and pro formas, dividends, debt maturity, asymmetric information, and more.
Corporate finance is a complex field composed of a broad variety of sub-disciplines, each involving a specific skill set and nuanced body of knowledge. This text is designed to give you an intuitive understanding of the fundamentals to provide a solid foundation for more advanced study.
- Identify sources of funding and corporate capital structure
- Learn how managers increase the firm's value to shareholders
- Understand the tools and analysis methods used for allocation
- Explore the five methods of valuation with free cash flow to firm and equity
Navigating the intricate operations of corporate finance requires a deep and instinctual understanding of the broad concepts and practical methods used every day. Interactive, discussion-based learning forces you to go beyond memorization and actually apply what you know, simultaneously developing your knowledge, skills, and instincts. Lessons in Corporate Finance provides a unique opportunity to go beyond traditional textbook study and gain skills that are useful in the field.
Inhalt
Preface xiii
Acknowledgments xv
About the Authors xvii
CHAPTER 1 Introduction
Two Markets: Product and Capital 2
The Basics: Tools and Techniques 2
A Diagram of Corporate Finance 3
A Brief History of Modern Finance 4
Reading This Book 6
CHAPTER 2 Determining a Firm's Financial Health (PIPES-A)
The Conversation with the Banker Is Like a Job Interview 7
Starting with the Product Market Strategy 9
Is PIPES Profi table? 10
Doing the Math 10
Sources and Uses of Funds 12
Ratio Analysis 16
The Cash Cycle 21
Summary 24
CHAPTER 3 Pro Forma Forecasts (PIPES-B)
First, Let's Take a Closer Look at Ratio Analysis 27
Pro Forma Forecasts 29
Circular Relationships 36
Back to (Forecasting) the Future 38
Projecting Out to 2014 and 2015 39
Evaluating the Loan 41
Summary 45
Appendix 3A: Accounting Is Not Economic Reality 47
CHAPTER 4 The Impact of Seasonality on a Firm's Funding (PIPES-C) 53
Monthly Pro Forma Income Statements 54
Monthly Pro Forma Balance Sheets 56
A Different Picture of the Firm 65
Summary 70
Appendix 4A: PIPES Monthly Pro Forma Income Statements and Balance Sheets 2014 71
Appendix 4B: PIPES Monthly Pro Forma Income Statements and Balance Sheets 2015 74
CHAPTER 5 Why Financing Matters (Massey Ferguson)
Product Market Position and Strategy 77
Political Risk and Economies of Scale in Production 78
Massey Ferguson 19711976 79
Sustainable Growth 81
The Period after 1976 83
Conrad Runs Away 86
The Competitors 87
Back to Massey 90
Massey's Restructuring 92
Postscript: What Happened to Massey 96
Summary 97
Appendix 5A: Massey Ferguson Financial Statements 99
CHAPTER 6 An Introduction to Capital Structure Theory
Optimal Capital Structure 104
M&M and Corporate Finance 107
Taxes 112
Costs of Financial Distress 120
The Textbook View of Capital Structure 125
The Cost of Capital 127
Summary 128
CHAPTER 7 Capital Structure Decisions (Marriott Corporation and Gary Wilson)
Capital Structure 131
The Cost of Capital 138
How Firms Set Capital Structure in Practice 141
Corporate Financial Policies 142
Sustainable Growth and Excess Cash Flow 145
What to Do with Excess Cash? 146
Summary 148
Appendix 7A: Marriott Corporation Income Statements and Balance Sheets 150
Appendix 7B: Marriott Corporation Selected Ratios 152
CHAPTER 8 Investment Decisions (Marriott Corporation and Gary Wilson)
What Is the Correct Price? 154
How Should Marriott Buy Its Shares? 154
The Loan Covenants 158
The Impact of the Product Market on Financial Policies 159
The Capital Market Impact and the Future 161
Summary 166
CHAPTER 9 Financial Policy Decisions (AT&T: Before and after the 1984 Divestiture)
Background on AT&T 172
M&M and the Practice of Corporate Finance 172
Old (Pre-1984) AT&T 174
New (Post-1984) AT&T 189
Summary 202
Appendix 9A: Development of AT&T Pro Formas 19841988
(Expected-Case) 203
CHAPTER 10 The Impact of Operating Strategy on Corporate Finance Policy (MCI)
A Brief Summary 207
A Brief History o…