陈宝莲剑奴影音先锋:Corporate Finance

Corporate Finance
This web site is designed to provide supporting material for corporate finance related topics. Corporate finance, as I define it, covers every decision a firm makes that may affect its finances. Consequently, I divide my discussion of corporate finance into five areas. The first is the objective function, where we define what exactly the objective in decision making should be. The second is the investment decision, where we look at how a business should allocate of resources across competing uses. The third is the financing decision, where we examine the sources of financing and whether there is an optimal mix of financing. The fourth is the dividend decision, which relates to how much a business should reinvest back into operations and how much should be returned to the owners. Finally, there is valuation, where all of the decisions made by a firm are traced through to a final value. You can navigate this site in many different ways.

You can start off with a big picture view of corporate finance, and click your way through the topics. There are several ways in which you can get the material on corporate finance.

1. Books:
If you are using one of my two corporate finance books, you can go to the sites that support these books. You can also get supporting material for these books on these sites.

Description of Book
Corporate Finance 2nd Edition Web Site

2. Classes

I teach a corporate finance class spread over 27 sessions. You can visit the site for the class. You will find the lecture notes used in the class and watch the webcasts of the lectures.

Corporate Finance Class at Stern School of Business

3. Topic
You can also pick a topic to browse through material available on the topic. The overheads and solutions to the problems are stored in pdf format, and you need Adobe Acrobat to read pdf files. (You can download Acrobat Reader directly from the Adobe site at http://www.adobe.com) The spreadsheets are in Microsoft Excel format, and can be used on either a Mac or Windows system.

Alternatively, you can browse through by type of material:

The Objective Function     Overheads Download as pdf file Problems and Solutions

Problems (Download solutions in pdf file)

Derivations, In-Practice Questions and Discussion

1. What is the difference between stock price maximization, firm value maximization and stockholder wealth maximization?
2. What is the objective function in corporate finance for a private firm?
3. What is the objective function for a non-profit organization?
4. Are markets short term?
5. What is the German/Japanese alternative to stockholder wealth maximization and does it work?

Readings

1. Stop whining about Wall Street
2. Bull Market Charges Ahead, lead by Activist Investors
3. The Civilized Hostile Takeover

Live Case Study Analyzing a Company's Corporate Governance Structure

The Investment Decision: Measuring Hurdle Rates
    Overheads Download as pdf file Data Sets

1. Interest Coverage Ratios, Ratings and Default Spreads
2. Historical Returns on Stocks, Bonds and Bills: United States
3. Country Ratings, Country Spreads and Equity Premiums
4. Implied Premiums for the United States: 1960 - Present
5. Unlevered and Levered Betas by Industry Group: United States
6. Historical Earnings Changes per Year: S&P 500

Spreadsheets

1. Estimating Implied Equity Premium in a Market
2. Estimating CAPM parameters for a firm
3. Unlevering and Levering Betas
4. Estimating Synthetic rating for a firm
5. Cost of Capital Estimation

Problems and Solutions

Problems on Risk, Return and Hurdle Rates (Download solutions in pdf file)

Derivations, In-Practice Questions and Discussion Models of Risk and Return
Applying Models of Risk and Return Readings

1. Operating Risk as a Measure of Risk
2. Market Risk and Time Horizon
3. Investors must recall risk
4. Risk Premium in Emerging Markets
5. Classic Rule of Risk Premium under Attack
6. Are risk premiums too low? (Greenspan testimony)

Live Case Study Analyzing a Firm's Stockholders
Developing a Firm's Risk Profile

The Investment Decision: Measuring Returns on Investments     Overheads Download as pdf file Data Sets

1. Operating Income and Cash Flows: By Sector
2. EVA and Equity EVA: By Sector
3. Variances in Firm Value: By Sector

Spreadsheets

1. Estimating Cash Flows to Firm and Return Diagnostics on Project
2. Estimating Cash Flows to Equity and Return Diagnostics on Project
3. Present Value Calculator
4. Valuing the Option to Delay
5. Valuing the Option to Expand
6. Valuing the Option to Abandon

Problems and Solutions

Problems on Measuring Investment Returns (Download solutions in pdf file)

Derivations, In-Practice Questions and Discussion Measurement of Project Returns
Estimating Side Costs and Benefits Readings

1. Measuring Earnings
2. The Content of an Annual Report
3. EVA as elixir
4. Synergy in Mergers

Live Case Study Measuring a Firm's Investment Returns

The Financing Decision     Overheads Download as pdf file Data Sets

1. Debt Ratios and Fundamentals
2. Book and Market Debt Ratios By Industry
3. Cross Sectional Debt Ratio Regression for the US
4. Macro Economic Data: Historical
5. Sensitivity to Macro-economic Variables: By Industry

Spreadsheets

1. Optimal Capital Structure with WACC (Operating Income held constant)
2. Optimal Capital Stucture with WACC (Operating Income allowed to vary)
3. Optimal Capital Structure with APV

Problems and Solutions

Problems on Capital Structure: The Choices (Download solutions in pdf file
Problems on Capital Structure: The Optimal Mix (Download solutions in pdf file)
Capital Structure: Moving to the Optimal (Download solutions in pdf file)

Derivations, In-Practice Questions and Discussion Capital Strucure: The Choices
Capital Structure: The Optimal Mix
Capital Structure: Moving to the Optimal Readings

1. Stock Buybacks are not always good news
2. Catastrophe Bonds
3. Mismatching Financing: The Indonesian Experience

Live Case Study The Financing Decision
Analyzing a Firm's Optimal Debt Ratio
Developing a Firm's Financial Details

The Dividend Decision     Overheads Download as pdf file Data Sets

1. Dividends and Earnings: S&P 500
2. Dividend Yield
3. Dividend Policy and Fundamentals: By Sector
4. Dividend Payout and FCFE Payout: By Sector
5. Firms with poor projects, low dividends
6. Firms with good project, low dividends
7. Firms with poor projects, high dividends
8. Firms with good projects, high dividends
9. Cross-Sectional Dividend Regression and Payout Ratio: By Sector

Spreadsheets

1. FCFE versus Dividends: Historical Analysis
2. Assessing Project Quality

Solutions to Problems

Problems on Dividend Policy: The Trade Off (Download solutions in pdf file)
Problems on Dividend Policy: Framework for Analysis (Download solutions in pdf file)

Derivations, In-Practice Questions and Discussion The Dividend Trade Off
A Framework for Analyzing Dividend Policy Readings

1. Dividends versus Stock Buybacks: The Determinants
2. Spin-offs, Split-offs and Divestitures: The Determinants
3. Stock Dividends and Stock Splits

Live Case Study Analyzing a Firm's Dividend Trade Offs
Analyzing Dividend Policy

Valuation     Overheads Download as pdf file Data Sets

1. Fundamental Growth Rate in EPS: By Sector
2. Fundamental Growth Rate in EBIT: By Sector
3. Net Capital Expenditure Ratios: By Sector
4. Working Capital: By Sector
5. PE, PEG and Fundamentals: By Sector
6. PBV, ROE and Fundamentals: By Sector
7. PS, Net Margin and Fundamentals: By Sector
8. Value/EBITDA: By Sector

Spreadsheets

1. Model Chooser: Helps choose the right model for a firm
2. Stable Growth DDM
3. Two Stage DDM
4. Three Stage DDM
5. Stable Growth FCFE Model
6. Two Stage FCFE
7. Three Stage FCFE
8. Stable Growth FCFF
9. Two Stage FCFF
10. Three Stage FCFF
11. Capital Expenditure Estimator
12. Estimating Equity Multiples
13. Estimating Firm Value Multiples

Solutions to Problems Download as pdf file Derivations, In-Practice Questions and Discussion

1. How do you choose between firm and equity valuation?
2. How do you estimate an expected growth rate?
3. How do you estimate how long expected growth will last?
4. What is terminal value and how is it estimated?
5. What is a stable growth rate and why can it not be greater than the discount rate?
6. What is an exit multiple andhow is it used in DCF valuation?
7. What are the most common errors in dividend discount model valuation?
8. What are the most common errors in FCFE/FCFF model valuation?
9. How do you value a firm that is losing money?
10. How do you value a financial service firm?
11. How do you value a private firm?

Readings Live Case Study Valuing a Firm

Problems and Solutions    

Management Objectives (Download solutions in pdf file)

Present Value: Time Value of Money (Download solutions in pdf file)

Risk, Return and Hurdle Rates (Download solutions in pdf file)

Measuring Investment Returns (Download solutions in pdf file)

Capital Structure: The Choices (Download solutions in pdf file)

Capital Structure: The Optimal Mix (Download solutions in pdf file)

Capital Structure: Moving to the Optimal (Download solutions in pdf file)

Dividend Policy: The Trade Off (Download solutions in pdf file)

Dividend Policy: Framework for Analysis (Download solutions in pdf file)

Valuation (Download solutions in pdf file)

Derivations and Discussion             The Objective of the Firm Basics of Risk Appplying Risk and Return Models Measuring Returns Side Costs, Benefits and Options in Projects Choices in Financing The Optimal Debt Ratio Moving to the Optimal Dividend Policy: Trade Offs Dividend Analysis Valuation