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 Modigliani–Miller Theorem
- Capital Structure and the Cost of Capital
- Capital Structure Under Conflicts of Interest
- Debt–Shareholders 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 of contents). Incorporating the latest developments, this construction provides an in-depth, integrated examination of financial management and corporate governance, two perspectives that are essential to managerial decisions but often treated separately
- The book covers the latest advanced topics such as the purpose of a corporation; ESG and stakeholder value considerations; the emergence of direct listings and SPACs in capital markets; competition laws, national security screening, and contractual arrangements in mergers and acquisitions; conflicts between controlling and minority shareholders in ownership structure; and the growing influence of activist funds, index investors and proxy advisors. It explains these topics through the dual lens of the asymmetric information and conflicts of interest underlying them, and thereby provides a coherent view towards understanding these various developments
- It provides practical financial modeling in the field of valuation and capital structure for ease of understanding these topics
