This book provides an integrative perspective on financial management and corporate governance deployed in management decisions. It analyzes wide-ranging issues such as valuation, capital investment, capital structure, mergers and acquisitions, shareholder and stakeholder value management, and corporate governance structure. Throughout the analyses, the book provides a coherent view of firms, laws and markets, and offers practical financial modeling techniques to assist in financial decisions.
This book also incorporates the latest developments in practice, such as direct listings and SPACs in capital markets, contractual arrangements in mergers and acquisitions, setting of corporate purpose, protection of minority investors in related party transactions, balancing of shareholder and stakeholder value from an ESG perspective, and the growing influence of activist funds, index investors and proxy advisors. It looks at these complex issues in firm management through the dual lens of asymmetric information and conflicts of interest that managers deal with, and gives coherency and clarity to the understanding of these key issues in management.
Contents:
Introduction:
What Is the Difference Between Management and Financial Management?
What Is the Difference Between Management and Financial Management?
What Is the Difference Between Individuals and Firms?
Organization of This Book
Understanding Value:
Overview
Measuring Value
The Capital Asset Pricing Model
Cash Flow
Valuing a Firm
Financial Modeling
Conclusion
Making Capital Investment Decisions:
Overview
Decision Rules
Performance Evaluations
Capability Building
Conclusion
Understanding Asymmetric Information in Financial Markets:
Asymmetric Information
Mitigating Asymmetric Information
Asymmetric Information in Initial Public Offerings
Asymmetric Information and the Agency Problem
Conclusion
Optimizing Capital Structure:
Debt and Equity
The ModiglianiMiller Theorem
Capital Structure and the Cost of Capital
Capital Structure Under Conflicts of Interest
DebtShareholders Conflict
Conclusion
Merging and Acquiring Businesses:
Overview
Choice of Payment
Legal Frameworks
Anti-takeover Measures
Post-merger Integration
Conclusion
Managing Shareholder and Stakeholder Value:
Overview
Framework of Duties
Disclosure and Measurement
Shareholders and Changing Paradigms
Conclusion
Structuring Corporate Governance:
Overview
Board of Directors
Conflicts of Interest
Proxy Advisors and Activism
Conclusion
Conclusion
Evolution of the Corporation
Evolution of the Board
Evolution of Financial Markets
Final Words
Readership: For students and researchers who are interested to understand more about financial management and corporate governance in management decisions. Key Features:
Each of the book's chapters deals with a decision that managers make, such as making capital investment decisions, optimizing capital structure, merging and acquiring businesses, and structuring corporate governance (see the table