Corporate finance: theory and practice

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

DESCRIPTION Get a distinctly European take on corporate finance 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 Ideal for students studying corporate finance as part of an MBA or a master's level programme in Finance, Corporate Finance: Theory and Practice is also required reading for practicing professionals in the UK and continental Europe seeking a distinctly European treatment of a critically important subject.