Stuart A McCrary

Mastering Corporate Finance Essentials

The Critical Quantitative Methods and Tools in Finance

• Gebundenes Buch

Produktbeschreibung

If you are a manager, a regulator, or an investor in today's financial world, you must know how to make financial decisions and account for risk in order to make sound financial decisions and effectively serve investors, creditors, and tax authorities. Mastering Corporate Finance Essentials is directed at those who make corporate investment decisions as well as those affected by such decisions. It explains traditional ways that business opportunities are evaluated. The text also introduces new methods borrowed from the derivatives securities markets to account for risk and to structure business decisions to avoid some risks and take advantage of opportunities. Each chapter builds on material learned in previous chapters. Chapter One is designed to allow you to quickly learn present value techniques, while Chapter Two reviews the statistics used in corporate finance. Chapter Three summarizes several important theories that provide a basis for assessing risk and determining what rate to use in valuing cash flows with the tools presented in Chapter One. In Chapter Four, the author synthesizes material from each earlier chapter to show how to value more complex projects and make related investment decisions. Chapter Five introduces additional tools to evaluate risk and handle the uncertainty of forecasted cash flows. Finally, Chapter 6 extends traditional financial tools to value risk and opportunities with real option analysis. Throughout the book, difficult topics are explained in clear and simple language. Numerous examples assist you in understanding the material by demonstrating how to perform each analysis. The text also offers advice on how to build financial models within Excel. And although the book is intended to cover just the essentials, numerous stand-alone insets dig into deeper issues and may present more quantitative topics. Whatever your current level of expertise, Mastering Corporate Finance Essentials is an ideal reference to round out your understanding of business financial results.

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Produktdetails

• Verlag: Wiley
• Seitenzahl: 208
• Erscheinungstermin: 8. Februar 2010
• Englisch
• Abmessung: 235mm x 157mm x 15mm
• Gewicht: 436g
• ISBN-13: 9780470393338
• ISBN-10: 0470393335
• Artikelnr.: 27134310

Autorenporträt

STUART A. McCRARY is a Principal at Chicago Partners, a division of Navigant Consulting, Inc. He is a trader and portfolio manager who specializes in traditional and alternative investments, quantitative valuation, risk management, and financial software. Prior to joining Chicago Partners, McCrary was president of Frontier Asset Management, managing a market-neutral hedge fund. He also held positions with Fenchurch Capital Management as a senior options trader and CS First Boston as vice president and market maker of over-the-counter options. Prior to that, McCrary was a vice president with the Securities Groups and a portfolio manager with Comerica Bank. McCrary has published three previous books with Wiley: Mastering Financial Accounting Essentials, How to Create and Manage a Hedge Fund, and Hedge Fund Course.

Inhaltsangabe

Preface.
Acknowledgments.
Chapter 1 Time Value of Money Toolbox.
Introduction.
Cash Flows.
Future Value.
The Impact of Compounding Frequency on Future Value.
Equivalent Interest Rate.
Continuously Compounded Interest.
Present Value.
Formulas for Present Value and Future Value.
Conclusion.
Questions.
Chapter 2 Statistics for Finance.
Introduction.
The Meaning of Mean or Average.
Median as a Substitute for Mean.
Standard Deviation Measures the Noise.
Annualizing Variance and Standard Deviation Estimates.
The Normal Curve Is a Probability Distribution.
The Cumulative Density Function.
Measures of Dependency.
Measuring Covariance and Correlation.
Calculating Statistics in Practice.
Combining Normal Distributions.
Conclusion.
Questions.
Chapter 3 Core Finance Theories and the Cost of Capital.
Introduction.
Risk Reduction from Diversification.
Systematic versus Unsystematic Risk.
The Market Portfolio.
The Capital Asset Pricing Model.
Using Beta to Determine the Required Return for a Stock.
Other Factor Models.
Cost of Debt.
Weighted Average Cost of Capital.
Modigliani and Miller.
Patterns of Debt and Equity in Capital Structures.
Conclusion.
Questions.
Chapter 4 Capital Budgeting Tools.
Introduction.
Three Ways to Evaluate Investments.
Calculating Net Present Value.
Net Present Value Example.
Calculating Internal Rate of Return.
Calculating Years to Payback.
Financial Decision Making.
The Annuity Formula.
Valuing an Annuity with More Frequent Cash Flows.
Using the Present Value Formula and the Annuity Formula to Value a Bond.
Using the Annuity Formula to Value a Mortgage.
NPV Using the Annuity Formula.
Valuing a Perpetuity.
Valuing a Growth Annuity.
Introduction to Uncertainty.
Conclusion.
Questions.
Chapter 5 Techniques for Handling Uncertainty.
Introduction.
Using Scenario Analysis.
Using Monte Carlo Simulation.
Uniform Random Numbers.
Transforming Uniform Distributions.
Adding and Multiplying Two Random Numbers.
Using Random Numbers in a Budget Analysis.
Using Random Numbers in a Capital Budgeting Analysis
Conclusion.
Questions.
Chapter 6 Real Options Analysis of Capital Investments.
Introduction.
Why Study Options?
What Is a Real Option?
Types of Real Options.
Methods for Valuing Real Options
Conclusion
Questions.
Appendix: Day Counting for Interest Rate Calculations.
Introduction.
The 30/360 Method
The Actual/Actual Method.
The Actual/360 Method.
The Actual/365 Method.
Example and Comparison of 30/360 and Actual/Actual.
Impact of Day Counting over Longer Intervals.
Calculating Calendar Intervals over Long Periods.
A Note about Continuous Compounding.
Conclusion.
Questions and Answers.
About the Author.
Index.