Corporate Financial Management

About our authors Glen Arnold runs his own equity portfolio and invests other people’s money in shares in a Managed Portfolio Service at Henry Spain Investment Services. He used to teach in the City and was a Professor of Investment, but concluded that academic life was not nearly as much fun, nor as intellectually stimulating, as making money in the markets for himself and his clients. For decades, his research focus explored the question: ‘What works in investment?’, drawing on the ideas of the great investors, academic discoveries and his own experience, good and bad.Glen has written the investing classics The Financial Times Guide to Investing, The Great Investors, The Financial Times Guide to Value Investing, Get Started  In Shares, and the 4 volumes of The Deals of Warren Buffett. He has also written several university textbooks as well as the best-selling book on banking, The Financial Times Guide to Banking.Deborah Lewis helped update the previous edition of this book before she sadly died in 2020. Deborah was a much-loved Senior Teaching Fellow at the University of Bath, UK and Director of Studies for the Bath MBA programme. Graham McDonald, CA, CFA is currently a Senior Lecturer in Finance and Accounting at the University of Roehampton, London, UK. In his previous role leading a finance function he was responsible for treasury management; prior to that he provided training to a number of investment banks and asset managers to help apply theory to practice.

• Part 1. Introduction The financial worldPart 2. The investment decision Project appraisal: net present value and internal rate of returnProject appraisal: cash flow and applicationsThe decision-making process for investment appraisalProject appraisal: capital rationing, taxation and inflationPart 3. Risk and return Risk and project appraisalPortfolio theoryThe Capital Asset Pricing Model and multi-factor modelsPart 4. Sources of finance Stock marketsRaising equity capitalLong-term debt financeShort- and medium-term finance, treasury and working capital managementStock market efficiencyPart 5. Corporate value Value-based managementValue-creation metricsThe cost of capitalValuing sharesCapital structureDividend policyMergersPart 6. Managing risk DerivativesManaging exchange-rate riskGlossaryIndex