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This textbook presents a comprehensive treatment of the legal arrangement of the corporation, the instruments and institutions through which capital can be raised, the management of the flow of funds through the individual firm, and the methods of dividing the risks and returns among the various contributors of funds. Now in its second edition, the book covers a wide range of topics in corporate finance, from time series modeling and regression analysis to multi-factor risk models and the Capital Asset Pricing Model. Guerard, Gultekin and Saxena build significantly on the first edition of the text, but retain the core chapters on cornerstone topics such as mergers and acquisitions, regulatory environments, bankruptcy and various other foundational concepts of corporate finance.New to the second edition are examinations of APT portfolio selection and time series modeling and forecasting through SAS, SCA and OxMetrics programming, FactSet fundamental data templates. This is intended to be a graduate-level textbook, and could be used as a primary text in upper level MBA and Financial Engineering courses, as well as a supplementary text for graduate courses in financial data analysis and financial investments.
Introduction: Capital Formation, Risk, and the Corporation
The Corporation and Other Forms of Business Organization
The Corporation Balance Sheet
The Annual Operating Statements: The Income Statement and Cash Flow Statement
Financing Current Operations and Efficiency Ratio Analysis
Financing Current Operations and the Cash Budget
Capital and New Issue Markets
The Equity of the Corporation: Common and Preferred Stock
Long-Term Debt
Debt, Equity, the Optimal Financial Structure, and the Cost of Funds
Investing in Assets: Theory of Investment Decision-Making
Regression Analysis and Estimating Regression Models
Time Series Modeling and the Forecasting Effectiveness of the US Leading Economic Indicators
Risk and Return of Equity, the Capital Asset Pricing Model, and Stock Selection for Efficient Portfolio Construction
Multifactor Risk Models and Portfolio Construction and Management
Options
Real Options
Mergers and Acquisitions
Liquidation, Failure, Bankruptcy, and Reorganization
Corporation Growth and Economic Growth and Stability
International Business Finance
Management–Stockholder Relations: Is Optimal Behavior All That Is Necessary?