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&RUSRUDWH)LQDQFH - Kenyatta University - introduction to corporate finance pdf


&RUSRUDWH)LQDQFH - Kenyatta University-introduction to corporate finance pdf

Corporate Finance
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Corporate Finance
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Corporate Finance ? 2008 Ventus Publishing ApS ISBN 978-87-7681-273-7
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Corporate Finance

Contents

1. Introduction

2. The objective of the firm

3. Present value and opportunity cost of capital 3.1 Compounded versus simple interest 3.2 Present value 3.3 Future value 3.4 Principle of value additivity 3.5 Net present value 3.6 Perpetuities and annuities 3.7 Nominal and real rates of interest 3.8 Valuing bonds using present value formulas 3.9 Valuing stocks using present value formulas

4. The net present value investment rule

5. 5.1 5.2 5.3 5.4 5.4.1 5.4.2

Risk, return and opportunity cost of capital Risk and risk premia The effect of diversification on risk Measuring market risk Portfolio risk and return Portfolio variance Portfolio's market risk

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Contents
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9
10 10 10 12 12 13 13 16 17 21
24
27 27 29 31 33 34 35

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4

Corporate Finance

5.5 5.6 5.7 5.7.1 5.7.2 5.7.3

Portfolio theory Capital assets pricing model (CAPM) Alternative asset pricing models Arbitrage pricing theory Consumption beta Three-Factor Model

6. 6.1 6.2 6.3 6.4 6.4.1 6.4.2 6.4.3 6.5

Capital budgeting Cost of capital with preferred stocks Cost of capital for new projects Alternative methods to adjust for risk Capital budgeting in practise What to discount? Calculating free cash flows Valuing businesses Why projects have positive NPV

7. 7.1 7.1.1 7.1.2 7.1.3 7.1.4 7.2

Market efficiency Tests of the efficient market hypothesis Weak form Semi-strong form Strong form Classical stock market anomalies Behavioural finance

Indholdsfortegnelse
36 38 40 40 41 41
42 43 44 44 44 45 45 45 48
49 50 50 51 53 54 54

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What are the essentials of corporate finance?Essentials of Corporate Finance. - Focuses on conveying the most important concepts of a core finance course in a way that is approachable for the widest possible audience. - 3 basic themes as a central focus: an emphasis on intuition, a unified valuation approach, and a managerial focus.