Chapter 1 the corporation
The Four Types of Firms
Ownership Versus Control of Corporation
The Stock Market
Agency Problem or Principal-Agent Problem
Primary Market
Secondary Market
Liquidity
Chapter 2 Introduction to Financial Statement Analysis
2.1 Firms’ Disclosure of Financial Information
2.2 The Balance Sheet
The Income Statement
The Statement of Cash Flows
Other Financial Statement Information
The management discussion and analysis (or business and operating review
Statement of change in shareholders’ equity
The notes to the financial statements
Financial Statements
Balance Sheet (also called the Statement of Financial Position)
Book Value
Short-term Debt
Market Capitalization
Enterprise Value
Asset Turnover
Equity Multiplier
DuPont Identity
EBIT Margin
Gross Margin
Intangible Assets
Impairment Charge
Inventory Days
Sarbanes-Oxley Act (SOX)
Chapter 3
Arbitrage and Financial Decision Making
Valuing Decisions
Interest Rates and the Time Value of Money
Present Value and the NPV Decision Rule
Arbitrage and the Law of One Price
No-Arbitrage and Security Prices
The Price of Risk and Arbitrage with Transaction Costs
Competitive Market
Time Value of Money
Risk-Free Interest Rate
Net Present Value (NPV)
NPV Decision Rule
Arbitrage
Normal Market
Law of One Price
Separation Principle
Chapter 4 the Time Value of Money
The Three Rules of Time Value
Valuing a Stream of Cash Flows
Calculating the Net Present Value
Perpetuities, Annuities, and Other Special Cases
Time Value of Money
Compounding
Discounting
Perpetuity
Annuity
Internal Rate of Return
Chapter 5 Interest Rate
Effective annual rate (EAR),
Annual percentage rate (APR)
Discount Rates and Loans
Nominal interest rates,
Risk and Taxes
The Opportunity Cost of Capital
Amortizing Loan
Credit Spread
Real Interest Rate
Chapter 6 Valuing Bonds
Bond Cash Flows, Prices, and Yields
Dynamic Behavior of Bond Prices
The Yield Curve and Bond Arbitrage
Corporate Bonds
Credit Risk, Credit Spread
Maturity Date
On-the-Run Bond
Premium
Face Value (FV)
Spot Interest Rates
Treasury Bills, Notes, and Bonds
Yield to Maturity (YTM)
Zero-Coupon Bond
Chapter 7 Investment Decision Rules
NPV and Stand-Alone Projects
The Internal Rate of return
The Payback Rule
Choosing Between Projects
Project Selection with Resource Constraints
Net Present Value (NPV) Investment Rule
Internal Rate of Return (IRR) Investment Rule
Mutually Exclusive Projects
Incremental IRR investment rule
Profitability Index
Payback Investment Rule
Chapter 8
Fundamentals of Capital Budgeting
Forecasting Earnings
Interest Expenses.
Taxes.
The opportunity cost
A sunk cost
Overhead expenses
Determining Free Cash Flow and NPV
Capital expenditures
Net working capital
Further Adjustments to Free Cash Flow
Unlevered Net Income
Marginal Corporate Tax Rate
Cannibalization
Opportunity Cost
Sunk Cost
Free Cash Flow
Trade Credit
Depreciation Tax Shield
Modified Accelerated Cost Recovery System (MACRS) Depreciation
Terminal Value, Continuation Value
Break-Even Analysis
Sensitivity Analysis
Scenario Analysis