A thoroughly researched Corporate Finance manual, the fruit of all the understanding the author has gained in this material over his years of professional practice. A rigorous approach to fundamental Ideas, avoiding unnecessary complications Highly convenient for those who: - Already know about these matters, but they would like to refresh them and keep a book for consulting by their side (financial managers, consultants, engineers, business & MBA students, etc). - Need to master financial concepts in order to enhance their professional or academic performance - Want to really know what their money & investments are worth. Here is the rationale.. The author deals with all questions clearly, pragmatically, allowing the readers intuition to guide them forward. However, he never sacrifices his rigorous analysis, necessary to meet the standards of the best business schools in the world. He includes some case studies which show how the key concepts are applied. In the Core chapters, written in an accessible style, the book presents the fundamentals it is necessary to master in order to understand corporate finance and its typical applications such as the valuation of companies and investments in general. The author leads us through questions like the cost of financial resources for the company, shareholders’ equity and external funds and the w.a.c.c, the search for the optimum capital structure and the strategic policies that ensure an adequate financial policy To explain all this, the analysis counts on solid tools and knowledge, which have been applied through the Gordon-Shapiro formula, the CAPM (Capital Asset Pricing Model) or the Modigliani and Miller model, among others. Suitable for beginners too: The first chapter starts at a basic level for inexpert readers and then moves into the key matters of corporate finance that it is necessary to master. This chapter deals with basic questions on the discounting and capitalization of different cashflows, methods for NPV (Net present Value), IRR (internal Rate of Return), Pay-back, etc. and the reasoning behind all of them. The book explains how to deal correctly with inflation when making any analysis. The author has explained the basic concepts in some exercises so that the reader can master them before moving on to more complex issues. There is also an Appendix on the value over time of money, a correct valuation of different structures of bonds and other basic financial concepts and some key basic exercises. The final part of the book explores the valuation of companies, applying all that the reader has learnt up to now. The author also brings together all the themes worked on and enriches them with a great deal of his experience and practical advice, reason why this book is such a useful tool for those who have to make investment decisions.

1. TABLE OF CONTENTS
1-Measuring the profitability of investments
Criteria for the analysis of investments
Project definition
Simple return on investment
First Considerations on other methods: calculation of cash flows
The Pay-back period
Net Present Value Method (NPV)
Internal Rate of Return (IRR)

2. Relationship between the Present Value and the IRR
Discounting Cash Flows with and without inflation
Indexed financial flows. Rates with or without inflation
The question can get more complicated
The practical effect of amortization on historical acquisition values
The effects of inflation on the Operational financial necessities
Other effects on the profits in accounting records and taxes
Conclusion
The IRONSOUHTH case
FINALTERNA case
The FERSA case
2-The cost of Permanent Resources ( Equity and external resources)
The cost of Debt
The cost of debt for the company. Introduction of the effect of taxes.
The cost of the capital
The Gordon-Shapiro model for the calculation of the cost of the company’s funds “Ke”
Estimating the “g” factor for the Gordon-Shapiro model
What is the best method to estimate “g”?
Average Cost of the Permanent Resources. The Weighted Average Cost of Capital:
WACC
Factors that affect the cost of the permanent resources
3-The Capital Structure and the Optimun Debt level
The theory of Optimal Capital Structure and the Modigliani & Miller formula
How the reality does not always match up to the theory ( Modigliani & Miller)
Avoiding serious mistakes. How the Modigliani and Miller formulas can lead you into
error
And even worse. The leveraged beta formulas and without leverage
And now what shall we do with the real problem of the structure of capital?
Putting a financial strategy into practice
Conclusions on the practice of taking financial decisions
Exercises on the cost of resources
4-The CAPM. Calculation of the Cost of Equity
Calculation of the cost of the resources wuith the Capital Asset Pricing Model
The CAPM formula is a simple Regression model
Calculating β
Conclusions reached so far
The CAPM for Asset pricing
For the cost of Capital: how to go from the CAPM one period model to the formula
Limitations of the CAPM model
5-Methods to Value a Company
Value and price
Methods based on the Balance sheet

3. Net Asset Value & Real Net Asset Value
Terminal Value & Replacement Value
Methods based on the Profit and Loss Account
Value of the profits. PER
Value of the dividends
Multiple of sales
Other multiples
Example. Use of the multiples method to value a company (case)
Multiples methods used to value companies in Internet
Methods based on Discounted Cash Flow
Present value, but of what? The concept of flows of funds
General method for discounting cash flows
Determination of the correct cash flow rate for discounting
Ensuring the company’s financial balance is correct
The “free cash flow”
The “cash flow” available for shares
“Capital cash flow”
Calculation of the company value through the free cash flow
Calculation of the unlevered company value plus the value of the tax savings due to the
debt (APV adjusted present value).
Calculation of the equity value from the cash flow available for the shares
A numerical example and reflections on market values
The main stages in company valuation by discounted flows
Critical aspects in a valuation
These methods give good results in any situation
The break up value of a company
The specialists’ opinion on the valuation
Key factors that affect the company’s value: growth, return, risk and the interest rates
Some commentaries on valuation
The most common errors when valuing companies
Case: CONSULTANCY vs. INVESTMENT BANK: valuation of a TELCO
6- Appendix: The Value of Money over Time
The time factor. The concept of compound interest
Elements: Time, Interest, Flows of funds
Equivalence between a present flow and a future flow.
Inflation and the Value of Money over time
Present value of a perpetual income
Solved exercises on basic concepts
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worth/dp/1478334118/ref=pd_rhf_ee_p_t_2
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