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An Introduction to Corporate Finance provides the reader with a complete overview of Corporate Finance from perspective of the investment Banker. The author, a corporate trainer and former investment banker clarifies the role of the investment banker in numerous corporate finance transactions, including mergers & acquisitions, IPO's, and valuation. Given today's corporate climate, every student studying corporate finance and those working in the field need this book to sharpen their skill set.
Auteur
Ross Geddes is a practitioner and educator in the corporate finance world. He has over 20 years of experience working on financings (both debt and equity) as well as M&A transactions. During his corporate finance career in Canada and the UK, he helped corporations and governments raise over $7 billion in equity in IPOs, secondary offerings and privatisations. Ross is the author of three other books on finance. He now resides in Canada.
Texte du rabat
In An Introduction to Corporate Finance, Ross Geddes provides a complete overview of the fundamentals of corporate finance from an investment banker's perspective. Split into two distinct sections; the first provides insights into financial advice, careers in corporate finance, sources of capital, mergers and acquisitions, flotations, international equity offerings and rights issues, and management buy-outs. The second section describes the main valuation techniques used to price (or value) companies during the transactions described. It also includes chapters on the determination of the cost of capital and shareholder value.
Written by a former investment banker, this book will be of interest to those currently employed or interested in working in the City of London; whether at an investment bank, law firm, or accountancy firm. Others will want to read this book in order to learn more about some of the most eventful and exciting corporate transactions that make the headlines of the business pages.
Résumé
An Introduction to Corporate Finance provides the reader with a complete overview of Corporate Finance from perspective of the investment Banker. The author, a corporate trainer and former investment banker clarifies the role of the investment banker in numerous corporate finance transactions, including mergers & acquisitions, IPO's, and valuation. Given today's corporate climate, every student studying corporate finance and those working in the field need this book to sharpen their skill set.
Contenu
About the author xv
1 'BEHIND THE CHINESE WALL' 1
Corporate finance in investment banking 2
Chinese walls 3
Corporate finance assignments 5
Flotations/IPOs 6
Mergers, acquisitions and divestitures 8
Leveraged buyouts and management buyouts 13
Financial advice 13
Careers in corporate finance 15
Organisation of this book 20
Part I CORPORATE FINANCE TRANSACTIONS 23
2 SOURCES OF CAPITAL 25
Debt securities 27
Money market securities 27
Long-term debt 29
Floating rate notes 31
Equity 32
Preference shares 32
Ordinary shares 34
Hybrids (convertible securities) 36
3 FLOTATIONS/INITIAL PUBLIC OFFERINGS 39
Primary offerings 40
Ancillary benefits of flotation 46
Disadvantages of flotation 46
Methods of flotation 47
Suitability for listing 49
The offering process 52
Participants and roles 52
Documentation and regulation 55
Due diligence and verification 57
Marketing, syndication and pricing 59
Underwriting 62
4 INTERNATIONAL EQUITY OFFERINGS 65
Rationale for international offerings 66
International investors 68
Development of international equity offerings 69
Regulation and documentation 70
Depository receipts 73
Marketing, syndication and distribution 75
Offer structure 76
Price setting, underwriting and bookbuilding 77
Fees and commissions 79
After the new issue 81
Stabilisation 81
5 RIGHTS ISSUES/SECONDARY OFFERINGS 83
Pre-emption rights 85
Setting the price 87
Calculating the theoretical rights price 88
Rights issue timetable 90
Fees and commissions 90
Secondary offerings 94
Marketed offerings 95
Bought deals 96
Accelerated bookbuilding 98
Demergers 100
6 MERGERS AND ACQUISITIONS 101
Rationale for M&A 102
Types of merger 104
Merger waves 106
Financing the transaction 107
Bootstrap transactions 109
Regulation of M&As 110
Key elements of the City Code 111
7 MANAGEMENT BUYOUTS 115
Financial structure 118
Bank finance (secured lending) 120
Private equity funds 122
Mezzanine finance 123
High-yield bonds 124
Part II CORPORATE FINANCE TECHNIQUES 127
8 VALUING SECURITIES 129
Valuing bonds 130
Valuing shares and companies 132
Cash flow based valuations 135
Determination of terminal/residual value 139
Determining the discount rate 143
Determining the value of the business 143
Relative valuations 146
Price earnings ratio 148
Price/EBIT multiple 149
Market to book value 149
Dividend yield 150
Enterprise value to EBITDA 151
Determining the value of a business based on ratios/multiples 152
9 DETERMINING THE COST OF CAPITAL 159
Weighted average cost of capital 160
Use market values 161
Use target/optimal weighting 162
After tax 163
Match nominal rates with nominal cash flows 163
Cost of debt: Kd 165
Cost of equity: Ke 166
Capital asset pricing model 168
Risk-free rate 170
Market risk premium (equity risk premium) 170
Beta () 171
Health warning 172
10 SHAREHOLDER VALUE ADDED (ECONOMIC PROFIT) 173
Just another number? 174 Ben...