Financial modeling : using Excel and R

Table of Contents: Part I. Corporate Finance 1. Basic Financial Analysis 2. Corporate Valuation Overview 3. Calculating the Weighted Average Cost of Capital (WACC) 4. Pro Forma Analysis and Valuation Based on the Discounted Cash Flow Approach 5. Building a Pro Forma Model: The Case of Merck 6. Financial Analysis of Leasing Part II. Bonds 7. Bond's Duration 8. Modeling the Term Structure 9. Calculating Default-Adjusted Expected Bond Returns Part III. Portfolio Theory 10. Portfolio Models-Introduction 11. Efficient Portfolios and the Efficient Frontier 11.2. Some Preliminary Definitions and Notation 12. Calculating the Variance-Covariance Matrix 13. Estimating Betas and the Security Market Line 14. Event Studies 15. The Black-Litterman Approach to Portfolio Optimization Part IV. Options 16. Introduction to Options 17. The Binomial Option Pricing Model 18. The Black-Scholes Model 19. Option Greeks 20. Real Options Part V: Monte Carlo Methods 21. Generating and using random Numbers 22. An Introduction to Monte Carlo Methods 23. Simulating Stock Prices 24. Monte Carlo Simulations for Investments 25. Value at Risk (VaR) 26. Replicating Options and Option Strategies 27. Using Monte Carlo Methods for Option Pricing Part VI: Technical 28. Data Tables 29. Matrices 30. Excel Functions 31. Array Functions 32. Some Excel Hints 33. Essentials of R Programming

The book is an essential text on financial modelling which provides the computational tools necessary to understand finance fundamentals. This edition has been substantially updated while preserving the straightforward, hands-on approach that made it so popular. It explains basic and advanced models in the areas of corporate finance, portfolio management, options, and bonds, and uses up-to-date and relevant data. The book covers seven parts, the first five covering corporate finance topics, bond and yield curve models, portfolio theory, options and derivatives, and Monte Carlo methods. Parts six and seven cover technical topics such as Excel and R, Excel's programming language Visual Basic for Applications (VBA), and Python implementations. This book is suitable for use in advanced finance classes that emphasize the need to combine modelling skills with a deeper knowledge of the underlying financial models.