tailieunhanh - Ebook Principles of managerial finance (10th edition): Part 2

(BQ) Part 2 book "Principles of managerial finance" has contents: Stock valuation, capital budgeting cash flows, capital budgeting techniques, risk and refinements in capital budgeting, the cost of capital, leverage and capital structure, dividend policy. | CHAPTER 7 STOCK VALUATION L E A R N I N G LG1 LG2 LG3 LG4 Differentiate between debt and equity capital. G O A L S LG5 Discuss the rights, characteristics, and features of both common and preferred stock. Describe the process of issuing common stock, including in your discussion venture capital, going public, the investment banker’s role, and stock quotations. LG6 Discuss the free cash flow valuation model and the use of book value, liquidation value, and price/earnings (P/E) multiples to estimate common stock values. Explain the relationships among financial decisions, return, risk, and the firm’s value. Understand the concept of market efficiency and basic common stock valuation under each of three cases: zero growth, constant growth, and variable growth. Across the Disciplines WHY THIS CHAPTER MATTERS TO YO U Accounting: You need to understand the difference between debt and equity in terms of tax treatment; the ownership claims of capital providers, including venture capitalists and stockholders; and why book value per share is not a sophisticated basis for common stock valuation. Information systems: You need to understand the procedures used to issue common stock; the sources and types of information that impact stock value; and how such information can be used in stock valuation models to link proposed actions to share price. Management: You need to understand the difference between debt and equity capital; the rights and claims of stockholders; the process of raising funds from venture capi- 306 talists and through initial public offerings; and how the market will use various stock valuation models to value the firm’s common stock. Marketing: You need to understand that the firm’s ideas for products and services will greatly affect the willingness of venture capitalists and stockholders to contribute capital to the firm and also that a perceived increase in risk as a result of new projects may negatively affect the firm’s stock .

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