100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Summary Corporate Financial Management IOR3 $7.09   Add to cart

Summary

Summary Corporate Financial Management IOR3

 21 views  2 purchases
  • Course
  • Institution

Summary Corporate Financial Management IOR3 at Karel de Grote University College

Preview 4 out of 115  pages

  • July 5, 2021
  • 115
  • 2020/2021
  • Summary
avatar-seller
SUMMARY
CORPORATE FINANCIAL
MANAGEMENT

,Table of contents
CHAPTER 1: Goals and governance of the corporation.....................................7
1. Investment and Financing decisions...............................................................................................7
2. What is a corporation?...................................................................................................................8
3. Who is the financial manager?.....................................................................................................10
4. Goals of the corporation...............................................................................................................11
5. Agency problems, executive compensation, and corporate governance.....................................11
6. The ethics of maximizing value.....................................................................................................12
7. Careers in finance.........................................................................................................................12
8. Preview of coming attractions......................................................................................................12
9. Snippets of financial history..........................................................................................................13
CHAPTER 2: Financial markets and institutions.............................................13
1. The importance of financial markets and institutions..................................................................13
2. The flow of savings to corporations..............................................................................................14
3. Functions of financial markets and intermediaries.......................................................................17
4. The crisis of 2007-2009.................................................................................................................17
CHAPTER 3: Accounting and finance...........................................................17
1. The Balance Sheet........................................................................................................................17
Book values and market values....................................................................................................18
2. The income statement..................................................................................................................19
Profits vs cash flows......................................................................................................................19
3. The statement of cash flows.........................................................................................................19
Free cash flow...............................................................................................................................20
4. Accounting practice and malpractice............................................................................................20
Corporate tax rates (2018)............................................................................................................21
5. Taxes.............................................................................................................................................21
CHAPTER 4: Measuring corporate performance.............................................21
1. How financial ratios relate to shareholder value..........................................................................21
2. Measuring market value and market value added.......................................................................21
3. Economic value added and accounting rates of return................................................................23
4. Measuring efficiency.....................................................................................................................24
Asset turnover ratio......................................................................................................................24
Inventory turnover.......................................................................................................................26
Receivables turnover....................................................................................................................26
5. The Du Pont system......................................................................................................................26


1

, 6. Measuring financial leverage........................................................................................................28
7. Measuring liquidity.......................................................................................................................28
8. Interpreting financial ratios..........................................................................................................29
9. The role of financial ratios............................................................................................................29
CHAPTER 5: The time value of money.........................................................29
1. Future Values and Compound Interest.........................................................................................29
Manhattan Island Sale..................................................................................................................30
2. Present Values..............................................................................................................................31
Time value of money (Applications).............................................................................................32
3. Multiple Cash Flows......................................................................................................................32
Future value of multiple cash flows..............................................................................................32
Present value of multiple cash flows............................................................................................32
4. Reducing the Chore of the Calculations: Part 1............................................................................33
Spreadsheets................................................................................................................................33
Financial calculators.....................................................................................................................34
5. Level Cash Flows: Perpetuities and Annuities...............................................................................34
Annuities Due...............................................................................................................................36
6. Reducing the Chore of the Calculations: Part 2............................................................................37
Calculations: Part 2 – Financial Calculators...................................................................................37
Calculations: part 2 – Spreadsheets..............................................................................................37
7. Effective Annual Interest Rates.....................................................................................................37
EAR and Financial Calculators.......................................................................................................38
APR and Financial Calculators.......................................................................................................38
8. Inflation & The Time Value of Money...........................................................................................38
CHAPTER 6: Valuing Bonds........................................................................39
1. The bond market..........................................................................................................................39
2. Interest rates and bond prices......................................................................................................40
3. Yield to maturity...........................................................................................................................43
Bond Yields...................................................................................................................................43
4. Bond rates of returns....................................................................................................................44
5. The yield curve..............................................................................................................................45
Nominal and real rates of interest................................................................................................46
6. Corporate bonds and the risk of default.......................................................................................47
Default risk...................................................................................................................................47
Corporate bonds...........................................................................................................................47
CHAPTER 7: Valuing Stocks.......................................................................48


2

, 1. Stocks and the Stock Market........................................................................................................48
2. Market Values, Book Values, and Liquidation Values...................................................................48
3. Valuing Common Stocks...............................................................................................................49
4. Simplifying the Dividend Discount Model.....................................................................................51
5. Valuing a Business by Discounted Cash Flow................................................................................54
Valuing non-constant growth.......................................................................................................54
6. There Are No Free Lunches on Wall Street...................................................................................54
Random walk theory.....................................................................................................................55
Another tool.................................................................................................................................55
Efficient market theory.................................................................................................................55
7. Market Anomalies and Behavioral Finance...................................................................................56
Market Anomalies........................................................................................................................56
Behavioral finance........................................................................................................................56
CHAPTER 8: Net present value and other investment criteria..........................56
1. Net Present Value.........................................................................................................................56
Valuing an office building.............................................................................................................58
Risk and present value..................................................................................................................58
2. The Internal Rate of Return Rule..................................................................................................59
3. The Profitability Index...................................................................................................................62
Capital rationing...........................................................................................................................62
4. The Payback Rule..........................................................................................................................62
Project interactions......................................................................................................................62
The investment timing decision....................................................................................................63
Equivalent annual annuity............................................................................................................63
Capital budgeting techniques.......................................................................................................64
CHAPTER 9: Using discounted cash-flow analysis to make investment decisions 64
1. Identifying Cash Flows..................................................................................................................64
Cash flow vs accounting income...................................................................................................64
Incremental cash flows.................................................................................................................64
Inflation........................................................................................................................................65
Separate investment and financing decisions...............................................................................66
Calculating cash flows...................................................................................................................66
2. Corporate Income Taxes...............................................................................................................66
3. An Example: Blooper Industries....................................................................................................67
CHAPTER 10: Project analysis....................................................................68
1. How Firms Organize the Investment Process to Draw on Their Competitive Strengths...............68


3

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller emmaroofthooft. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.09. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

81113 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
$7.09  2x  sold
  • (0)
  Add to cart