In the wake of fast changing economic landscape—characterized by global financial crisis, volatile equity and bond markets, rising dominance of emerging markets and increasing investor activism—the role of financial managers in an organization has assumed significant importance.

This text aims at educating the students the fundamentals of Corporate Finance, and explains how various theories can be applied for efficient decision making for the financial managers.

The book is conceptualized on practical approach, and explores various topics in an easy and step-by-step approach, backed by numerous examples, self-test exercises and India-centric cases.

The complex financial concepts related to capital structure, risk and return analysis, valuation of financial securities, market efficiency and portfolio management have been explained in a reader-friendly manner to provide a unique learning experience.

The book is intended for the postgraduate students of Management, and practising financial managers.


Key features
• The chapters are backed by strong practical experience of in-depth financial analysis of Companies.
• Supplemented with real-life examples and scenarios in a concise and comprehensive presentation.
• India-centric cases to create an interactive class room environment.
• Topics for further research have been included on each major topic as ‘Researchable Issues’.
• Each chapter contains side-boxes to highlight the important points for quick revision.
• Each chapter is incorporated with Review Questions, Practice Exercises and Self-Test Questions to add analytical approach to the subject.
• Revision set and PPT slides provided as web support.
• Solutions Manual for instructors, available on request.

Part I: Introduction To Corporate Finance

1. Objectives, Scope and the Financial Environment

2. Time Value of Money

Part II: Capital Investment Decision

3. Principles of Investment Decision

4. Investment Decision DCF Methods of Appraising Projects

5. Risk Analysis for Investment Decisions

6. Investment Decision: Capital Rationing, Inflation and Real Options

Part III: Risk, Return and Valuation

7. Market Risk and Return

8. Portfolio Theory and Asset Pricing Models

9. Valuation of Bonds

10. Valuation of Shares

Part IV: Financing and Dividend Decision

11. Cost of Capital

12. Theories of Capital Structure

13. Capital Structure Decisions and Leverage Analysis

14. Dividend Payout Policy and Theories

Part V: Financial Ratios and Analysis

15. Financial Ratio and Analysis

Part VI: Working Capital Management

16. Working Capital Management 1: Operating Cycle and Financing Aspects

17. Working Capital Management 2: Inventory, Debtors and Cash Management

Part VII: Non-Profit Organizations

18. Financial Management in Non-Profit Organizations

Appendix A:

Table 1: Future Value of $1 at i % for n periods (FVIF)

Table 2: Present Value of $1 at i % for n periods (PVIF)

Table 3: Future Value of an Annuity Interest Factor (FVIFA): $1 per period at i % for n periods

Table 4: Present Value of an Annuity Interest Factor (PVIFA): $1 per period at i % for n periods

Appendix B: Answers to MCQ’s • Appendix C: Answers to Self-Test Questions

Index