Applied Corporate Finance, Trade: A User's Manual - Hardcover

Damodaran, Aswath

Hardcover

ISBN 10: 0471330426 ISBN 13: 9780471330424

Publisher: Wiley, 1999

Synopsis

Convert Theory into Solutions: A Corporate Finance Reality Check This hands-on guide to corporate finance focuses on converting the theory and models in corporate finance into tools that can be used to analyze, under stand and help any business. Applied Corporate Finance provides a user's perspective to corporate finance, by posing the three major questions that every business has to answer, and then providing the tools and the analytical techniques needed to answer them. The three questions are-
* Where do we invest our resources? (The Investment Decision) The first part of the book looks at how to assess risk and develop a risk profile for a firm, convert this risk profile into a hurdle rate, and develops the basic rules that need to be followed in estimating the returns on any investment.
* How should we fund these investments? (The Financing Decision) Firms generally can use debt, equity or some combination of the two to fund projects. This part of the book examines the relationship between this choice and the hurdle rate to be used in analyzing projects, and presents ways in which the financing decision can be used to maximize firm value. It also sets up a framework for picking the right kind of security for any firm.
* How much cash can and should we return to the owners? (The Dividend Decision) The third part of the book establishes a process that can be used to decide how much cash should be taken out of the business, and in what form - dividends or stock buybacks. The final chapter in the book ties in the value of the firm to these three decisions, and provides insight into how firms can enhance value.
In summary, this is a book about coming up with real solutions to real problems, using real-time data on real companies.

About this title

About the Author

ASWATH DAMODARAN (New York, NY) is Associate Professor of Finance at New York University's Leonard N. Stern School of Business. Recently named one of the nation's top business school teachers by Business Week, he is the author of Damodaran on Valuation: Security Analysis for Investment and Investment Valuation.

From the Back Cover

Convert Theory into Solutions: A Corporate Finance Reality Check This hands-on guide to corporate finance focuses on converting the theory and models in corporate finance into tools that can be used to analyze, under stand and help any business. Applied Corporate Finance provides a user’s perspective to corporate finance, by posing the three major questions that every business has to answer, and then providing the tools and the analytical techniques needed to answer them. The three questions are-

1. Where do we invest our resources? (The Investment Decision) The first part of the book looks at how to assess risk and develop a risk profile for a firm, convert this risk profile into a hurdle rate, and develops the basic rules that need to be followed in estimating the returns on any investment.
2. How should we fund these investments? (The Financing Decision) Firms generally can use debt, equity or some combination of the two to fund projects. This part of the book examines the relationship between this choice and the hurdle rate to be used in analyzing projects, and presents ways in which the financing decision can be used to maximize firm value. It also sets up a framework for picking the right kind of security for any firm.
3. How much cash can and should we return to the owners? (The Dividend Decision) The third part of the book establishes a process that can be used to decide how much cash should be taken out of the business, and in what form — dividends or stock buybacks. The final chapter in the book ties in the value of the firm to these three decisions, and provides insight into how firms can enhance value.

In summary, this is a book about coming up with real solutions to real problems, using real-time data on real companies.

Edition details

• Publisher: Wiley
• Publication date: 1999
• Language: English
• ISBN 10: 0471330426
• ISBN 13: 9780471330424
• Binding: Hardcover
• Edition number: 1
• Number of pages: 592