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" Advanced Capital Budgeting : "
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BL
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| Record Number
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556035
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b384662
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| Main Entry
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Jr Harold Bierman
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| Title & Author
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Advanced Capital Budgeting : : Refinements in the Economic Analysis of Investment Projects.
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| Publication Statement
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Hoboken : Taylor and Francis,, 2014.
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(386 pages)
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| ISBN
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1317828836
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: 9781317828839
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| Notes
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7 Diversification and Risk Reduction.; Written by authors of established texts in this area, this book is a companion volume to the classic The Capital Budgeting Decision. Exploring this key topic in corporate finance the authors examine the complexities of capital budgeting as well as the opportunities to improve the decision process where risk and time are important elements. Containing 'Global Aspects' sections that cover cross-border decision-making, this book also emphasizes the application of capital budgeting techniques to a variety of issues, including the hugely significant 'buy versus lease' decision th.
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| Contents
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Cover Half Title Title Page Copyright Page Table of Contents List of illustrations Preface Part I Capital Budgeting and Valuation Under Certainty 1 The State of the Art of Capital Budgeting Decision-making and corporate objectives The evolution of capital budgeting practice Surveys of practice The discount rate Cash flow components The calculation of the discount rate The time risk interaction Real options Three problems Time discounting Present value addition rule Present value multiplication rule The term structure of interest rates Risk and diversification. Strategic considerationsThree basic generalizations The capital market Global business aspects Conclusions Problems Discussion question Bibliography 2 Amounts Discounted and Discount Rates The FCF method The CCF method The adjusted present value method Equivalence of the methods The FCF method The CCF calculation: the value to investors Adjusted present value Costs of financial distress The costs of capital The WACC with debt Valuation: a summary With no debt With 600 of debt substituted for stock With debt (use of APV) The use of r* (the CCF method). Calculation of discount ratesFinite-lived assets Global business aspects Conclusions Problems Discussion question Bibliography Appendix derivations Part II Capital Budgeting and Valuation Under Uncertainty 3 Capital Budgeting with Uncertainty Tree diagrams Period-by-period summaries Sensitivity analysis Simulation Risk preferences Certainty equivalents Time and risk Risk adjusted discount rates The required return Default-free rate of discount The borrowing rate Changing the uncertainty Global business aspects Conclusions Problems Discussion question Bibliography. 4 Elements of Time and UncertaintyThe investment process The discount rate Converting expected cash flows The discount rate assumption Capital budgeting with constant risk aversion Capital budgeting with a constant risk adjusted rate A capital market perspective A qualification of the CAPM decision rule Global business aspects Conclusions Quiz Problems Discussion question Solution to quiz Bibliography 5 The State Preference Approach Prices with certainty Prices with uncertainty The three factors The expected risk-adjustment Countercyclical assets Required rates of return. Application of the risk-adjusted present value approachMultiperiod investments Applying the risk-adjusted present value factors Global business aspects Conclusions Problems Discussion question Bibliography 6 Resolution of Uncertainty Risks, returns and the resolution of uncertainty Introducing the three assets Asset values by node Expected rates of return by asset and node Conclusions about the three assets An alternative calculation Introducing the two projects Global business aspects Generalizations Problems Discussion question Bibliography.
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Electronic books
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Seymour Smidt
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