The tenth edition by Steve Lumby and Chris Jones provides a comprehensive insight into the complex and ever-changing area of corporate finance. Covering some of the common financial decisions that face companies including investment, financing, the dividend decision and the management of risk, this text enables students to reflect on how these types of decisions are made. The strong theoretical approach that underpins the text is enhanced with a range of real world examples which help to put the financial models and frameworks into context. Packed with diverse examples and problems, Corporate Finance provides a broad introduction to the subject in an accessible yet rigorous style.

lgrsnf/Corporate_Finance_Theory_and_Practice__10th_Edition.pdf

lgli/Corporate_Finance_Theory_and_Practice__10th_Edition.pdf

Corporate Finance, 10th Edition

Lumby, Steve, Jones, Chris

Stephen Lumby; C M Jones

Tenth edition, Andover, Hampshire, United Kingdom, 2019

United Kingdom and Ireland, United Kingdom

Tenth edition, Australia, 2019

10th edition, 2019-01-15

{"edition":"10","isbns":["1473758386","9781473758384"],"last_page":647,"publisher":"Cengage Learning EMEA"}

Cover
Brief Contents
Contents
About the Authors
Preface
Publisher's Acknowledgements
Walk-Through Tour
Part 1: Introduction
Chapter 1: Financial Decision-Making
The Nature of Financial Decisions
The Decision Process
Financial Decision-Making
Summary
Notes
Quiz Questions
Chapter 2: Decision Objectives
Value Maximization and the Company
Ownership and Control
Regulation of the Relationship between Directors and Shareholders
Incentive Scheme Criteria
Conclusion
Summary
Notes
Further Reading
Quiz Questions
Problems
Part 2: Investment Decisions
Chapter 3: Traditional Methods of Investment Appraisal
Introduction
The Payback Method
Return on Capital Employed
Conclusions
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 4: Investment-Consumption Decision Model
Introduction to the Model
The Time Value of Money
The Basic Graphical Analysis
Introduction of Capital Markets
The Separation Theorem
The Conclusions of the Basic Model
Payback and ROCE
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 5: The Discounted Cash Flow Approach
Net Present Value
Alternative Interpretations of NPV
Internal Rate of Return
Discounted Payback
Truncated NPV
Summary
Appendix: Compounding and Discounting
Notes
Further Reading
Quiz Questions
Problems
Chapter 6: Net Present Value and Internal Rate of Return
NPV and Project Interdependence
IRR Rule and Interdependent Projects
Extending the Time Horizon
Multiple IRRs
Extended Yield Method
Other Problems with the IRR Rule
The Modified IRR: MIRR
NPV versus IRR: Conclusion
The Replacement Cycle Problem
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 7: Project Cash Flows
Investment Appraisal and Inflation
Inflation and the IRR Technique
Investment Appraisal and Taxation
The Relevant Cash Flows
Summary
Appendix: A Typical Corporate Tax System
Notes
Further Reading
Quiz Questions
Problems
Chapter 8: Capital Rationing
Introduction
Hard and Soft Capital Rationing
Single-Period Capital Rationing
Multi-Period Capital Rationing
Summary
Notes
Further Reading
Quiz Questions
Problems
Part 3: Risk Analysis
Chapter 9: Simple Risk Techniques
Risk and Return
Expected Net Present Value
The Abandonment Decision
Sensitivity Analysis
The Risk-Adjusted Discount Rate
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 10: Risk and Return
Introduction to Uncertainty
The Expected Utility Model
The Approach to Portfolio Theory
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 11: Portfolio Theory
Two-Asset Portfolios
Multi-Asset Portfolios
Introduction of a Risk-Free Investment
The Capital Market Line
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 12: The Capital Asset Pricing Model
The Security Market Line
The CAPM Expression
The Beta Value
The Validity of the CAPM
Arbitrage Pricing Theory
Betas and Project Investment Appraisal
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 13: Option Valuation
Introduction
The Basic Characteristics of Options
Option Terminology
The Valuation of Options
The Black and Scholes Model
The Building Blocks of Investment
Put-Call Parity Theorem
Using Share Options
The Option 'Greeks'
The Binomial Model
Real Options
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 14: Interest Rate Risk
Introduction
The Money Markets
Forward Forward Loans
Forward Rate Agreements
Interest Rate Guarantees
Option Contract Markets
Interest Rate Futures
Caps, Collars and Floors
Interest Rate Swaps
Summary
Notes
Further Reading
Quiz Questions
Problems
Part 4: Financing Decisions
Chapter 15: Financial Markets
Introduction
Market Efficiency
Market Efficiency and Share Dealing
The Empirical Evidence of EMH
The Term Structure of Interest Rates
Pure Expectations Hypothesis
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 16: The Cost of Capital
The Financing Decision
The Cost of Equity Capital
Expected Return, Dividends and Market Price
Applying the Dividend Valuation Model
CAPM and the Cost of Equity Capital
CAPM versus the DVM
The Cost of Debt Capital
Convertible Debt
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 17: Weighted Average Cost of Capital
The Project Discount Rate
The Calculation of WACC
The WACC and Project Risk
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 18: Capital Structure in a Simple World
An Optimal Capital Structure
Business and Financial Risk
The Arbitrage Proof
Conclusions
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 19: Capital Structure in a Complex World
Taxation and Capital Structure
Using the M and M Equations
M and M in the Real World
Further Views on Capital Structure
Conclusion
Capital Structure in Practice
Real World Considerations
Earnings Per Share and Gearing
Degree of Operating Gearing
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 20: Investment and Financing Interactions
Company Valuation and Investment Appraisal
1. The Dividend and Interest Valuation Model
2. Adjusted Present Value Model
3. The M and M Valuation Model
4. The Traditional Valuation Model
Approaches to Investment Appraisal
Asset Betas and Gearing
Risk-Adjusted WACC
Lease or Purchase Decision
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 21: The Dividend Decision
Dividend Policy in Perfect Capital Markets
Traditional View of the Dividend Decision
Dividend Policy in an Imperfect Market
The Empirical Evidence
Conclusion
Summary
Notes
Further Reading
Quiz Questions
Problems
Part 5: International Issues
Chapter 22: Foreign Exchange
Introduction
Exchange Rates
Foreign Exchange Markets
Exchange Rate Systems
Determinants of FX Rates
Summary
Note
Further Reading
Quiz Questions
Problems
Chapter 23: Foreign Exchange Hedging
Foreign Exchange Risk Definitions
Transaction Risk Hedging
Foreign Exchange Futures Contracts
Forward versus Futures
Foreign Exchange Options Contracts
Setting Up an Option Hedge
Early Exercise
Contingent Exposure to Foreign Exchange Risk
Traded Options versus OTC Options
Summary
Notes
Further Reading
Quiz Questions
Problems
Chapter 24: Foreign Direct Investment
Introduction
Project Cash Flows
Project Discount Rate
Translation Risk
Economic Risk
Country/Political Risk
Summary
Notes
Further Reading
Quiz Questions
Problems
Tables
Answers to Quiz Questions
References for Real World Views
Index

2022-02-13