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Frequently Asked Questions in Corporate Finance



Frequently Asked Questions in Corporate Finance

Pascal Quiry, Yann Le Fur, Antonio Salvi, Maurizio Dallocchio

ISBN: 978-1-119-96065-2 September 2011 516 Pages


The definitive question and answer guide to understanding corporate finance

From the team behind the popular corporate finance website, comes a concise guide to the subject, presented in an easy-to-use, highly accessible "question and answer" format. An essential reference for students of corporate finance and practising corporate financiers alike, Frequently Asked Questions in Corporate Finance answers key questions in financial engineering, valuation, financial policy, cost of capital, financial analysis, and financial management. Covering both the theory and practice of corporate finance, the book demonstrates how financial theory can be put to use solving practical problems.

  • What advantages are there to a business looking to spin off its divisions into subsidiaries?
  • Is there a formula that can be used to determine the change in normalised free cash flows?
  • What are the possible reasons behind a share buyback? What are the pros and cons of off-market share buy-back?

Filled with the answers to all of the most common, and not so common, questions about corporate finance, the book presents authoritative, reliable information from a respected team of experts from the banking, corporate, and academic worlds.

1 Frequently Asked Questions 1

2 Topics 409

50 years of research in finance 410

Ten deadly mistakes in corporate finance 412

Five mistakes in corporate valuation 423

M&A: Six mistakes to be avoided 429

Rating agencies 432

Credit scoring 435

Behavioral finance: are investors really rational? 438

Micro-finance: helping the poor 444

Project finance 449

Corporate finance in Europe: confronting theory with

practice 454

Capital markets: some useful definitions 457

Transaction multiples: before and during the crisis 459

The making of an investment banker 469

Corporate finance books 472

Brainteasers – PART I 475

Brainteasers – PART II 478

Answers 481

True or false: test yourself 482

Answers 484

Crossword 487

Index 493