Corporate Finance

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(r) Program, CIPM(r) Program, CFA Institute ESG Investing Certificate, and Investment Foundations(r) 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.

Auteur

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.

Texte du rabat

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(r) Program, CIPM(r) Program, CFA Institute ESG Investing Certificate, and Investment Foundations(r) 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.

Contenu

Foreword xv

Acknowledgments xix

About the CFA Institute Investment Series xxi

CHAPTER 1 Corporate Structures and Ownership 1

1. Introduction 1

2. Business Structures 2

3. Public and Private Corporations 12

4. Lenders and Owners 23

5. Summary 31

6. Practice Problems 32

CHAPTER 2 Introduction to Corporate Governance and Other ESG Considerations 35

1. Introduction 36

2. Stakeholder Groups 36

3. Principal--Agent and Other Relationships 41

4. Corporate Governance and Mechanisms to Manage Stakeholder Risks 51

5. Corporate Governance and Stakeholder Management Risks and Benefits 63

6. ESG Considerations in Investment Analysis 69

7. Environmental, Social, and Governance Investment Approaches 73

8. Summary 77

9. Practice Problems 79

CHAPTER 3 Working Capital & Liquidity 81

1. Introduction 81

2. Financing Options 82

3. Working Capital, Liquidity, and Short-Term Funding Needs 89

4. Liquidity and Short-Term Funding 95

5. Measuring Liquidity 99

6. Evaluating Short-Term Financing Choices 103

7. Summary 105

8. Practice Problems 105

CHAPTER 4 Capital Investments 109

1. Introduction 109

2. Types of Capital Investments 110

3. The Capital Allocation Process 114

4. Investment Decision Criteria 119

5. Common Capital Allocation Pitfalls 125

6. Corporate Use of Capital Allocation 126

7. Real Options 129

8. Summary 132

9. Practice Problems 133

CHAPTER 5 Capital Structure 139

1. Introduction 139

2. Factors Affecting Capital Structure 140

3. Capital Structure and Company Life Cycle 151

4. Modigliani--Miller Propositions 157

5. Optimal and Target Capital Structures 167

6. Stakeholder Interests 174

7. Summary 183

8. Practice Problems 183

CHAPTER 6 Measures of Leverage 189

1. Introduction 189

2. Leverage 190

3. Business and Sales Risks 192

4. Operating Risk and the Degree of Operating Leverage 194

5. Financial Risk, the Degree of Financial Leverage and the Leveraging Role of Debt 201

6. Total Leverage and the Degree of Total Leverage 205

7. Breakeven Points and Operating Breakeven Points 208

8. The Risks of Creditors and Owners 211

9. Summary 213

10. Practice Problems 214

CHAPTER 7 Cost of Capital: Foundational Topics 219

1. Introduction 219

2. Cost of Capital 220

3. Costs of the Various Sources of Capital 223

4. Estimating Beta 232

5. Flotation Costs 237

6. Methods in Use 239

7. Summary 240

8. Practice Problems 241

CHAPTER 8 Cost of Capital: Advanced Topics 249

1. Introduction 249

2. Cost of Capital Factors 250

3. Estimating the Cost of Debt 261

4. The ERP 268

5. The Cost of Equity (Required Return on Equity) 279

6. Mini-Case 1 293

7. Mini-Case 2 299

8. Practice Problems 300

CHAPTER 9 Analysis of Dividends and Share Repurchases 303

1. Dividends: Forms and Effects on Shareholder Wealth and Financial Ratios 304

2. Dividend Policy and Company Value: Theories 311

3. Other Theoretical Issues: Signaling 313

4. Other Theoretical Issues: Summary 320

5. Factors Affecting Dividend Policy in Practice 320

6. Payout Policies 327

7. Share Repurchases 332

8. Valuation Equivalence of Cash Dividends and Share Repurchase 338

9. The Dividend versus Share Repurchase Decision 339

10. Analysis of Dividend Safety 347

11. Summary 351

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