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Executive Corporate Finance: The Business of enhancing shareholder value

Book Description

"One of the more comprehensive books available covering corporate finance and related managerial discussions, this book explains financial concepts in an easy to understand manner. The real life examples enliven the discussion, illustrating the central concepts, and one of the strongest aspects is the depth of the explanations by Samir Asaf.  It should serve as a reference for CEOs and CFOs."  

John Mulvey, Professor,BendheimCenterfor Finance,PrincetonUniversity

"It was said once that war is too important to be left to generals.  Similarly, Finance is too important to be left to accountants and finance specialists.  It should be part of every executive¿s toolkit.  There is no doubt that this book will help develop and spread a deep understanding of corporate finance and therefore greatly enhance value for the business reader."

Marc Bertoneche,Professeur des Universites,Bordeaux&Paris andVisiting Professor of Finance,HarvardBusinessSchool

"A well-written, succinct, comprehensive and practical assessment of best-practices in corporate finance, risk management and reporting standards.  I found it equally useful as a textbook or as a handy reference guide."                

Youssef A. Nasr, Group General Manager, South America, HSBC Bank

"This book is chock-full of useful ideas, insightful observations, and illuminating real-world case studies of the underlying corporate finance propositions.  It will teach you a lot about corporate strategy and contemporary business history."

Danny Quah, Professor of Economics,LondonSchoolof Economics and Political Science

"If you need a reference for what, why, and how financial departments of leading multinational companies increase their shareholder value, this is the book for you."                                       

Alexander Kaganovich, Director, Funds Development Group, Credit Suisse FirstBoston

In this book, you can experience first hand, how high-performance finance organizations across a broad spectrum of industries go about their business of creating and sustaining shareholder value, and can selectively apply best practices to your corporation's unique circumstances.

Table of Contents

  1. Copyright
    1. Dedication
  2. Financial Times Prentice Hall
  3. Preface
  4. Acknowledgements
  5. Chapter executive summaries
    1. 1. Optimizing the corporate finance function
    2. 2. Shareholder value maximization
    3. 3. Financial policy
    4. 4. Risk management
    5. 5. Financial reporting, planning, and control
    6. 6. Performance management
    7. Appendix: Applied optimization modeling
    8. Financial data: Annual revenue, asset utilization, and financial leverage
  6. 1. Optimizing the corporate finance function
    1. Introduction
    2. The external business environment and corporate financial strategy
      1. Characteristics of the US capital markets
    3. The strategic logic of high growth
      1. Hypergrowth
      2. One-time events
      3. Dynamic value management
    4. Notes
  7. 2. Shareholder value maximization
    1. Introduction
    2. Corporate valuation
    3. Valuation models: Public company
      1. Effective Borrowing Rate (EBR)
    4. Valuation models: Closely held company
    5. Corporate performance measurement: Economic value added (EVA)
    6. Notes
  8. 3. Financial policy
    1. Introduction
    2. Capital structure
      1. The life-cycle of the business
      2. Impact on market value
      3. Providing adequate liquidity
      4. Financial flexibility
      5. Structured financial vehicles
      6. Alternative financing vehicles
      7. Operating and Capital Leases
      8. Mezzanine Financing
    3. Operating leverage
    4. Dividend policy
      1. Effect on bond prices
      2. Changes in dividend policy
      3. Alternatives to dividends
    5. Pricing strategy
      1. The goal of pricing
      2. Pricing strategies
      3. Profit impact of price change
    6. Tax planning
      1. The global perspective
      2. Tax implications
    7. Optimal capital budgeting with real options
    8. Mergers and acquisitions
      1. Shareholder concerns
      2. Steps to protect and enhance value
    9. Asset-liability management: Optimizing the balance sheet
    10. Notes
  9. 4. Risk management
    1. Introduction
    2. Identifying and estimating risk exposure
      1. The risk groups
      2. The VAR measure
      3. Risk Budgeting
      4. Operational risks that cannot be affected
      5. Identifying all material risk exposures
      6. Scale of materiality
      7. Cash flow at risk (CFAR)
    3. Off-balance-sheet (OBS) risks
      1. OBS risks related to enterprise value
      2. Variable interest entities (VIEs)
      3. Securitization
    4. Financial risk management
      1. Measuring financial risks
      2. Controlling financial risk
    5. Operational risk management
      1. Reducing the risk of operational losses
      2. Other types of operational risk
      3. Key trends
      4. Drivers of change
      5. Different perspectives
      6. Delta – EVT
    6. Enterprise-wide risk management (EWRM)
      1. EWRM defined
      2. VAR and stress testing
      3. Popular measures
      4. Cash flow at risk (CFAR)
      5. The Basel II Capital Accord
      6. EAR and CFAR estimation
    7. Risk hedging strategies
      1. Credit Default Swaps
      2. The IAS 39 standard
      3. Risk management as integral to the business
      4. Risk classes
      5. Disciplined risk taking
      6. Three main options
      7. Insurance as a risk hedging strategy
    8. Notes
  10. 5. Financial reporting, planning, and control
    1. Introduction
    2. Financial reporting: GAAP convergence
      1. Beyond financial reporting
    3. Business and financial planning
      1. The complete business modeling solution
      2. Selecting the proper planning horizon
      3. The array of plans and budgets
      4. Sensitivity analysis
      5. Components of the budget
      6. Making optimal financial decisions
      7. Forecasting techniques
    4. Treasury management
      1. Improving treasury operations
      2. The Operating Cycle & Cash Flow Timeline
      3. More demands on treasurers
      4. New technology
      5. Straight through processing (STP) – some examples
      6. Managing the banking relationship
    5. Financial control and audit
    6. Optimize amid changing operating conditions
      1. Method one
      2. Method two
    7. Notes
  11. 6. Corporate performance management: The balancing act?
    1. Introduction
      1. Survey results
      2. Key performance measures in active use
      3. Software in use
    2. The execution problem
    3. The balanced scorecard
    4. Real-time financial systems: Corporate performance management (CPM)
      1. The new-generation systems
      2. Compliance and other global features
      3. BPM in detail
      4. Real-time capabilities
    5. Integrated financial management
    6. Notes
  12. Applied financial optimization modeling
    1. Value maximization: Analytical techniques
    2. Company size, asset utilization, and financial leverage
  13. Acronyms
  14. Bibliography