The newly revised Sixth Edition of Corporate Finance: Theory and Practice delivers a uniquely European perspective on the foundations and latest trends in corporate finance, including the marked shifts brought about by sustainability, environmental, and social concerns.
Containing updated statistics and graphs, the book covers the latest innovations in financial practice, like the rise of private equity investment, the continuous decline in listed companies, and the dramatic surge of sustainability-linked financing products. Readers get access to an accompanying website that offers regularly updated statistics, graphs, and charts, direct email access to the authors, quizzes, case studies, articles, and more.
The book also includes:
- A balanced blend of theory and practice from an author team with a presence in academia and business
- Access to The Vernimmen.com Newsletter, which provides monthly updates on corporate finance to over 60,000 subscribers
Table of Contents
Preface viii
Frequently used symbols xii
1 Towards A Green, Responsible and Sustainable Corporate Finance 1
Section I Financial Analysis 17
Part One Fundamental Concepts In Financial Analysis 19
2 Cash Flow 21
3 Earnings 31
4 Capital Employed and Invested Capital 46
5 Walking Through From Earnings To Cash Flow 58
6 Getting To Grips With Consolidated Accounts 72
7 How To Cope With The Most Complex Points In Financial Accounts 90
Part Two Financial Analysis and Forecasting 117
8 How To Perform A Financial Analysis 119
9 Margin Analysis: Structure 144
10 Margin Analysis: Risks 167
11 Working Capital and Capital Expenditures 182
12 Financing 203
13 Return On Capital Employed and Return On Equity 219
14 Conclusion of Financial Analysis 238
Section II Investors and Markets 245
Part One Investment Decision Rules 247
15 The Financial Markets 249
16 The Time Value of Money and Net Present Value 270
17 The Internal Rate of Return 286
Part Two The Risk of Securities and The Required Rate of Return 299
18 Risk and Return 301
19 The Required Rate of Return 329
Part Three Financial Securities 347
20 Bonds 349
21 Other Debt Products 370
22 Shares 386
23 Options 406
24 Hybrid Securities 427
25 Selling Securities 445
Section III Value 469
26 Value and Corporate Finance 471
27 Measuring Value Creation 491
28 Investment Criteria 509
29 The Cost of Capital 525
30 Risk and Investment Analysis 542
31 Valuation Techniques 557
Section IV Corporate Financial Policies 589
Part One Capital Structure Policies 591
32 Capital Structure and The Theory of Perfect Capital Markets 593
33 Capital Structure, Taxes and Organisation Theories 605
34 Debt, Equity and Options Theory 621
35 Working Out Details: The Design of The Capital Structure 639
Part Two Equity Capital 659
36 Returning Cash To Shareholders 661
37 Distribution In Practice: Dividends and Share Buy-Backs 678
38 Share Issues 696
Part Three Debt Capital 709
39 Implementing A Debt Policy 711
Section V Financial Management 729
Part One Corporate Governance and Financial Engineering 731
40 Setting Up A Company and Financing Start-Ups 733
41 Shareholders 754
42 Choosing A Corporate Structure 779
43 Corporate Governance 795
44 Initial Public Offerings (IPOS) 807
45 Taking Control of A Company 819
46 Mergers and Demergers 842
47 Leveraged Buyouts (LBOS) 860
48 Bankruptcy and Restructuring 876
Part Two Managing Working Capital, Cash Flows, Financial Risks and Real Estate 889
49 Managing Working Capital 891
50 Cash Management 903
51 Managing Financial Risks 922
52 Managing Operational Real Estate 946
Epilogue - Finance and Strategy 958
Top 20 Largest Listed Companies 965
Contents 973
Index 983
