Financial Times Handbook of Corporate Finance, The

Glen Arnold is a businessman, investor and a professor of finance at Salford University. He’s the author of Corporate Financial Management, now  in its fourth edition, Essentials of Corporate Financial Management, The Financial Times Guide to Value Investing, now in its second edition, and the market leading, The Financial Times Guide to Investing also in its second edition.

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