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An Introduction to Corporate Finance: Transactions and Techniques, 2nd Edition

توضیحات

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.


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.
About the author.

1. ‘BEHIND THE CHINESE WALL’.

Corporate finance in investment banking.

Chinese walls.

Corporate finance assignments.

Flotations/IPOs.

Mergers, acquisitions and divestitures.

Leveraged buyouts and management buyouts.

Financial advice.

Careers in corporate finance.

Organisation of this book.

Part I: CORPORATE FINANCE TRANSACTIONS.

2. SOURCES OF CAPITAL.

Debt securities.

Money market securities.

Long-term debt.

Floating rate notes.

Equity.

Preference shares.

Ordinary shares.

Hybrids (convertible securities).

3. FLOTATIONS/INITIAL PUBLIC OFFERINGS.

Primary offerings.

Ancillary benefits of flotation.

Disadvantages of flotation.

Methods of flotation.

Suitability for listing.

The offering process.

Participants and roles.

Documentation and regulation.

Due diligence and verification.

Marketing, syndication and pricing.

Underwriting.

4. INTERNATIONAL EQUITY OFFERINGS.

Rationale for international offerings.

International investors.

Development of international equity offerings.

Regulation and documentation.

Depository receipts.

Marketing, syndication and distribution.

Offer structure.

Price setting, underwriting and bookbuilding.

Fees and commissions.

After the new issue.

Stabilisation.

5. RIGHTS ISSUES/SECONDARY OFFERINGS.

Pre-emption rights.

Setting the price.

Calculating the theoretical rights price.

Rights issue timetable.

Fees and commissions.

Secondary offerings.

Marketed offerings.

Bought deals.

Accelerated bookbuilding.

Demergers.

6. MERGERS AND ACQUISITIONS.

Rationale for M&A.

Types of merger.

Merger waves.

Financing the transaction.

Bootstrap transactions.

Regulation of M&As.

Key elements of the City Code.

7. MANAGEMENT BUYOUTS.

Financial structure.

Bank finance (secured lending).

Private equity funds.

Mezzanine finance.

High-yield bonds.

Part II: CORPORATE FINANCE TECHNIQUES.

8. VALUING SECURITIES.

Valuing bonds.

Valuing shares and companies.

Cash flow based valuations.

Determination of terminal/residual value.

Determining the discount rate.

Determining the value of the business.

Relative valuations.

Price earnings ratio.

Price/EBIT multiple.

Market to book value.

Dividend yield.

Enterprise value to EBITDA.

Determining the value of a business based on ratios/multiples.

9. DETERMINING THE COST OF CAPITAL.

Weighted average cost of capital.

Use market values.

Use target/optimal weighting.

After tax.

Match nominal rates with nominal cash flows.

Cost of debt: Kd.

Cost of equity: Ke.

Capital asset pricing model.

Risk-free rate.

Market risk premium (equity risk premium).

Beta (ß).

Health warning.

10. SHAREHOLDER VALUE ADDED (ECONOMIC PROFIT).

Just another number?

Benefits of SVA.

Calculation of SVA.

Limitations of economic profit calculations.

Appendix: UK CORPORATE VALUATION METHODS: A SURVEY.

Scoring and tables.

A.1 Valuation methodology.

A.1.1 Frequency of use.

A.1.2 Calculation of final valuation or value range.

A.2 Discounted cash flows.

A.2.1 DCF approaches.

A.2.2 Forecast period.

A.2.3 Terminal value.

A.3 Cost of capital.

A.3.1 Determining the cost of equity.

A.3.2 Capital asset pricing model.

Sources of information.

Glossary.

List of abbreviations.

Additional reading.

Index.