Corporate Finance

Peter Moles is the joint (principal) author of The Handbook of International Financial Terms, (Oxford University Press, 1997). He has written all or part of the following distance learning modules used by Edinburgh Business School: Financial Risk Management; Derivatives; Credit Risk Management (jointly authored); Mergers and Acquisitions (wrote the sections on corporate valuation, merger tactics and due diligence).Published academic papers on: Project evaluation; Currency risk management; Real options; Use of derivatives; Short selling.Prior to joining the University of Edinburgh, he worked in international banking for Chase Manhattan in London, Mitsubishi Finance and Nikko Securities, and before that he worked as a corporate finance consultant for a small private boutique.

• Preface xxviiOrganisation and coverage xxixProven pedagogical framework xxxiiInstructor and student resources xxxviAcknowledgements xxxviiiPART 1 INTRODUCTION 1CHAPTER 1 The Financial Manager and the Firm 2PART 2 FOUNDATIONS 37CHAPTER 2 The Financial Environment and the Level of Interest Rates 38CHAPTER 3 Financial Statements, Cash Flows and Taxes 69CHAPTER 4 Analysing Financial Statements 112PART 3 VALUATION OF FUTURE CASH FLOWS AND RISK 161CHAPTER 5 The Time Value of Money 162CHAPTER 6 Discounted Cash Flows and Valuation 198CHAPTER 7 Risk and Return 241CHAPTER 8 Bond Valuation and the Structure of Interest Rates 288CHAPTER 9 Share Valuation 327PART 4 CAPITAL BUDGETING DECISIONS 361CHAPTER 10 The Fundamentals of Capital Budgeting 362CHAPTER 11 Cash Flows and Capital Budgeting 408CHAPTER 12 Evaluating Project Economics and Capital Rationing 456CHAPTER 13 The Cost of Capital 492PART 5 WORKING CAPITAL MANAGEMENT AND FINANCING DECISIONS 531CHAPTER 14 Working Capital Management 532CHAPTER 15 How Firms Raise Capital 571CHAPTER 16 Capital Structure Policy 618CHAPTER 17 Dividends and Dividend Policy 658PART 6 BUSINESS FORMATION, VALUATION AND FINANCIAL PLANNING 687CHAPTER 18 Business Formation, Growth and Valuation 688CHAPTER 19 Financial Planning and Forecasting 734PART 7 CORPORATE RISK MANAGEMENT AND INTERNATIONAL DECISIONS 777CHAPTER 20 Corporate Risk Management 778CHAPTER 21 International Financial Management 837APPENDIX A Present Value and Future Value Tables 887APPENDIX B Solutions to Selected Questions and Problems 892Glossary 903Subject Index 915Company Index 931