Fundamentals of Corporate Finance

Parrino's Fundamentals of Corporate Finance develops the key concepts of corporate finance with an intuitive approach while also emphasizing computational skills, enabling students to develop the critical judgments necessary to apply financial tools in real decision-making situations. The fourth edition offers a level of rigor that is appropriate for both business and finance majors.

1 The Financial Manager and the Firm 1-1

1.1 The Role of the Financial Manager 1-2

Stakeholders 1-2

It’s All About Cash Flows 1-2

Three Fundamental Decisions in Financial Management 1-4

1.2 Forms of Business Organization 1-6

Sole Proprietorships 1-7

Partnerships 1-8

Corporations 1-8

1.3 Managing the Financial Function 1-10

Organizational Structure 1-10

Positions Reporting to the CFO 1-11

External Auditor 1-11

The Audit Committee 1-12

The Compliance and Ethics Director 1-12

1.4 The Goal of the Firm 1-12

What Should Management Maximize? 1-12

Why Not Maximize Profits? 1-13

Maximize the Value of the Firm’s Stock 1-13

Can Management Decisions Affect Stock Prices? 1-14

1.5 Agency Conflicts: Separation of Ownership and Control 1-15

Ownership and Control 1-16

Agency Relationships 1-16

Do Managers Really Want to Maximize Stock Price? 1-16

Aligning the Interests of Managers and Stockholders 1-17

Sarbanes-Oxley and Other Regulatory Reforms 1-18

1.6 The Importance of Ethics in Business 1-21

Business Ethics 1-21

Are Business Ethics Different from Everyday Ethics? 1-21

Types of Ethical Conflicts in Business 1-22

The Importance of an Ethical Business Culture 1-23

Serious Consequences 1-23

Summary of Learning Objectives / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems / Sample Test Problems

Ethics Case: Incentives And Ethics: Cross-Selling at Wells Fargo 1-27

2 The Financial System and the Level of Interest Rates 2-1

2.1 The Financial System 2-2

The Financial System at Work 2-3

How Funds Flow through the Financial System 2-3

2.2 Direct Financing 2-4

A Direct Market Transaction 2-5

Investment Banks and Direct Financing 2-5

2.3 Types of Financial Markets 2-7

Primary and Secondary Markets 2-7

Exchanges and Over-the-Counter Markets 2-8

Money and Capital Markets 2-8

Public and Private Markets 2-9

Futures and Options Markets 2-10

2.4 Market Efficiency 2-10

Efficient Market Hypotheses 2-11

2.5 Financial Institutions and Indirect Financing 2-12

Indirect Market Transactions 2-12

Financial Institutions and Their Services 2-13

Corporations and the Financial System 2-14

2.6 The Determinants of Interest Rate Levels 2-16

The Real Rate of Interest 2-16

Loan Contracts and Inflation 2-18

The Fisher Equation and Inflation 2-18

Cyclical and Long-Term Trends in Interest Rates 2-20

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

3 Financial Statements, Cash Flows, and Taxes 3-1

3.1 Financial Statements and Accounting Principles 3-2

The Annual Report 3-2

Generally Accepted Accounting Principles 3-3

Fundamental Accounting Principles 3-3

International GAAP 3-4

Illustrative Company: Diaz Manufacturing 3-5

3.2 The Balance Sheet 3-5

Current Assets and Liabilities 3-7

Long-Term Assets and Liabilities 3-8

Equity 3-9

3.3 Market Value versus Book Value 3-11

A More Informative Balance Sheet 3-11

A Market-Value Balance Sheet 3-12

3.4 The Income Statement and the Statement of Retained Earnings 3-14

The Income Statement 3-14

The Statement of Retained Earnings 3-16

3.5 The Statement of Cash Flows 3-17

Sources and Uses of Cash 3-17

3.6 Tying Together the Financial Statements 3-20

3.7 Cash Flow to Investors 3-22

Net Income versus the Cash Flow to Investors 3-22

Cash Flow to Investors: Putting It All Together 3-26

3.8 Federal Income Tax 3-27

Corporate Income Tax Rates 3-27

Average versus Marginal Tax Rates 3-28

Unequal Treatment of Dividends and Interest Payments 3-28

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

4 Analyzing Financial Statements 4-1

4.1 Background for Financial Statement Analysis 4-2

Perspectives on Financial Statement Analysis 4-2

Guidelines for Financial Statement Analysis 4-3

4.2 Common-Size Financial Statements 4-4

Common-Size Balance Sheets 4-4

Common-Size Income Statements 4-6

4.3 Financial Ratios and Firm Performance 4-7

Why Ratios are Better Measures 4-7

Short-Term Liquidity Ratios 4-8

Efficiency Ratios 4-11

Leverage Ratios 4-14

Profitability Ratios 4-18

Market-Value Indicators 4-21

Concluding Comments on Ratios 4-22

4.4 The Dupont System: A Diagnostic Tool 4-22

An Overview of the DuPont System 4-22

The ROA Equation 4-23

The ROE Equation 4-24

The DuPont Equation 4-25

Applying the DuPont System 4-25

Is Maximizing ROE an Appropriate Goal? 4-27

4.5 Selecting a Benchmark 4-27

Trend Analysis 4-27

Industry Analysis 4-28

Peer Group Analysis 4-28

4.6 Using Financial Ratios 4-30

Performance Analysis of Diaz Manufacturing 4-30

Limitations of Financial Statement Analysis 4-33

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Ethics Case: A Sad Tale: The Demise of Arthur Andersen 4-45

5 The Time Value of Money 5-1

5.1 The Time Value of Money 5-2

Consuming Today or Tomorrow 5-2

Time Lines as Aids to Problem Solving 5-3

Financial Calculator 5-3

5.2 Future Value and Compounding 5-4

Single-Period Investment 5-4

Two-Period Investment 5-5

The Future Value Equation 5-6

Using a Calculator to Compute the Future Value Factor 5-8

Future Value Factor Tables 5-8

Applying the Future Value Formula 5-8

Calculator Tips for Future Value Problems 5-13

5.3 Present Value and Discounting 5-16

Single-Period Investment 5-16

Multiple-Period Investment 5-17

The Present Value Equation 5-17

Future and Present Value Equations Are the Same 5-17

Applying the Present Value Formula 5-18

The Relations Among Time, the Discount Rate, and Present Value 5-20

Calculator Tips for Present Value Problems 5-20

Future Value Versus Present Value 5-21

5.4 Additional Concepts and Applications 5-22

Finding the Interest Rate 5-23

Finding How Many Periods It Takes an Investment to Grow a Certain Amount 5-24

The Rule of 72 5-25

Compound Growth Rates 5-25

Concluding Comments 5-27

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

6 Discounted Cash Flows and Valuation 6-1

6.1 Multiple Cash Flows 6-2

Future Value of Multiple Cash Flows 6-2

Present Value of Multiple Cash Flows 6-5

6.2 Level Cash Flows: Annuities and Perpetuities 6-9

Present Value of an Annuity 6-9

Future Value of an Annuity 6-18

Perpetuities 6-20

Annuities Due 6-21

6.3 Cash Flows That Grow at a Constant Rate 6-24

Growing Annuity 6-24

Growing Perpetuity 6-25

6.4 The Effective Annual Interest Rate 6-26

Why the Confusion? 6-26

Calculating the Effective Annual Interest Rate 6-26

Comparing Interest Rates 6-27

Consumer Protection Acts and Interest Rate Disclosure 6-29

The Appropriate Interest Rate Factor 6-29

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity 6-37

Problem 6-38

Ethics Case: America’s Ailing Drug Prices 6-38

7 Risk and Return 7-1

7.1 Risk and Return 7-2

7.2 Quantitative Measures of Return 7-3

Holding Period Returns 7-3

Expected Returns 7-4

7.3 Variance and Standard Deviation as Measures of Risk 7-8

Calculating Variance and Standard Deviation 7-8

Interpreting Variance and Standard Deviation 7-9

Historical Market Performance 7-12

Arithmetic Average and Geometric (Compounded) Average Returns 7-15

7.4 Risk and Diversification 7-17

Single-Asset Portfolios 7-17

Portfolios with More Than One Asset 7-19

The Limits of Diversification 7-25

7.5 Systematic Risk 7-26

Why Systematic Risk Is All That Matters 7-27

Measuring Systematic Risk 7-27

7.6 Compensation for Bearing Systematic Risk 7-30

7.7 The Capital Asset Pricing Model 7-31

The Security Market Line 7-32

The Capital Asset Pricing Model and Portfolio Returns 7-33

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

8 Bond Valuation and the Structure of Interest Rates 8-1

8.1 Corporate Bonds 8-2

Market for Corporate Bonds 8-2

Bond Price Information 8-3

Types of Corporate Bonds 8-3

8.2 Bond Valuation 8-4

The Bond Valuation Formula 8-5

Calculator Tip: Bond Valuation Problems 8-6

Par, Premium, and Discount Bonds 8-7

Semiannual Compounding 8-9

Zero Coupon Bonds 8-10

8.3 Bond Yields 8-12

Yield to Maturity 8-12

Effective Annual Yield 8-13

Realized Yield 8-15

8.4 Interest Rate Risk 8-15

Bond Theorems 8-16

Bond Theorem Applications 8-17

8.5 The Structure of Interest Rates 8-18

Marketability 8-19

Call Provision 8-19

Default Risk 8-19

The Term Structure of Interest Rates 8-21

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Ethics Case: The Subprime Mortgage Market Meltdown: How Did It Happen? 8-29

9 Stock Valuation 9-1

9.1 The Market for Stocks 9-2

Secondary Markets 9-2

Secondary Markets and Their Efficiency 9-3

Stock Market Indexes 9-5

Reading the Stock Market Listings 9-5

Common and Preferred Stock 9-6

Preferred Stock: Debt or Equity? 9-7

9.2 Common Stock Valuation 9-8

A One-Period Model 9-8

A Perpetuity Model 9-9

The General Dividend-Valuation Model 9-11

The Growth Stock Pricing Paradox 9-11

9.3 Stock Valuation: Some Simplifying Assumptions 9-12

Zero-Growth Dividend Model 9-13

Constant-Growth Dividend Model 9-13

Computing Future Stock Prices 9-16

The Relation between R and g 9-17

Mixed (Supernormal) Growth Dividend Model 9-18

9.4 Valuing Preferred Stock 9-21

Preferred Stock with a Fixed Maturity 9-22

Preferred Stock with No Maturity 9-23

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Ethics Case: Insider Trading: Have I Got a Stock Tip for You! 9-29

10 The Fundamentals of Capital Budgeting 10-1

10.1 An Introduction to Capital Budgeting 10-2

The Importance of Capital Budgeting 10-2

The Capital Budgeting Process 10-3

Sources of Information 10-4

Classification of Investment Projects 10-4

Basic Capital Budgeting Terms 10-5

10.2 Net Present Value 10-6

Valuation of Real Assets 10-6

NPV—The Basic Concept 10-6

NPV and Value Creation 10-7

Framework for Calculating NPV 10-8

Net Present Value Techniques 10-9

Concluding Comments on NPV 10-13

10.3 The Payback Period 10-14

Computing the Payback Period 10-14

How the Payback Period Performs 10-15

Discounted Payback Period 10-16

Evaluating the Payback Rule 10-17

10.4 The Accounting Rate of Return 10-18

10.5 Internal Rate of Return 10-19

Calculating the IRRy 10-20

When the IRR and NPV Methods Agree 10-21

When the NPV and IRR Methods Disagree 10-23

Modified Internal Rate of Return (MIRR) 10-26

IRR versus NPV: A Final Comment 10-28

10.6 Investment Decisions with Capital Rationing 10-29

Capital Rationing in a Single Period 10-30

Capital Rationing across Multiple Periods 10-32

10.7 Capital Budgeting in Practice 10-33

Practitioners’ Methods of Choice 10-33

Postaudit and Periodic Reviews 10-34

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

11 Cash Flows and Capital Budgeting 11-1

11.1 Calculating Project Cash Flows 11-2

Incremental After-Tax Free Cash Flows 11-3

The FCF Calculation 11-3

Cash Flows from Operations 11-5

Cash Flows Associated with Capital Expenditures and Net Working Capital 11-6

The FCF Calculation: An Example 11-6

FCF versus Accounting Earnings 11-8

11.2 Estimating Cash Flows in Practice 11-10

Five General Rules for Incremental After-Tax Free Cash Flow Calculations 11-11

Nominal versus Real Cash Flows 11-14

Tax Rates and Depreciation 11-16

Computing the Terminal-Year FCF 11-19

Expected Cash Flows 11-22

11.3 Forecasting Free Cash Flows 11-23

Cash Flows from Operations 11-24

Cash Flows Associated with Capital Expenditures and Net Working Capital 11-24

11.4 Special Cases (Optional) 11-26

Projects with Different Lives 11-26

When to Replace an Existing Asset 11-28

The Cost of Using an Existing Asset 11-29

When to Harvest an Asset 11-30

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Ethics Case: Unilever’s Sustainable Living Plan 11-37

12 Evaluating Project Economics 12-1

12.1 Variable Costs, Fixed Costs, and Project Risk 12-2

Cost Structure and Sensitivity of EBITDA to Revenue Changes 12-3

Cost Structure and Sensitivity of EBIT to Revenue Changes 12-5

12.2 Calculating Operating Leverage 12-9

Degree of Pretax Cash Flow Operating Leverage 12-9

Degree of Accounting Operating Leverage 12-10

12.3 Break-Even Analysis 12-11

Pretax Operating Cash Flow Break-Even 12-12

Accounting Operating Profit (EBIT) Break-Even 12-13

12.4 The Economic Break-Even Point 12-15

12.5 Risk Analysis 12-19

Sensitivity Analysis 12-20

Scenario Analysis 12-20

Simulation Analysis 12-21

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

13 The Cost of Capital 13-1

13.1 The Firm’s Overall Cost of Capital 13-2

The Finance Balance Sheet 13-3

Estimating a Firm’s Cost of Capital 13-5

13.2 The Cost of Debt 13-7

Key Concepts for Estimating the Cost of Debt 13-7

Estimating the Current Cost of a Bond or an Outstanding Loan 13-8

Taxes and the Cost of Debt 13-10

Estimating the Cost of Debt for a Firm 13-11

13.3 The Cost of Equity 13-13

Common Stock 13-13

Preferred Stock 13-19

13.4 Using the WACC in Practice 13-21

Calculating WACC: An Example 13-21

Limitations of WACC as a Discount Rate for Evaluating Projects 13-23

Alternatives to Using WACC for Evaluating Projects 13-26

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

14 Working Capital Management 14-1

14.1 Working Capital Basics 14-2

Working Capital Terms and Concepts 14-3

Working Capital Accounts and Trade-Offs 14-4

14.2 The Operating and Cash Conversion Cycles 14-5

Operating Cycle 14-7

Cash Conversion Cycle 14-8

14.3 Working Capital Management Strategies 14-10

Flexible Current Asset Management Strategy 14-11

Restrictive Current Asset Management Strategy 14-11

The Working Capital Trade-Off 14-11

14.4 Accounts Receivable 14-13

Terms of Sale 14-13

Aging Accounts Receivable 14-14

14.5 Inventory Management 14-16

Economic Order Quantity 14-16

Just-in-Time Inventory Management 14-17

14.6 Cash Management and Budgeting 14-18

Reasons for Holding Cash 14-18

Cash Collection 14-19

14.7 Financing Working Capital 14-20

Strategies for Financing Working Capital 14-20

Financing Working Capital in Practice 14-22

Sources of Short-Term Financing 14-22

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

15 How Firms Raise Capital 15-1

15.1 Bootstrapping 15-2

How New Businesses Get Started 15-3

Initial Funding of the Firm 15-3

15.2 Venture Capital 15-4

The Venture Capital Industry 15-4

Why Venture Capital Funding Is Different 15-4

The Venture Capital Funding Cycle 15-5

Venture Capitalists Provide More Than Financing 15-8

The Cost of Venture Capital Funding 15-9

15.3 Initial Public Offering 15-9

Advantages and Disadvantages of Going Public 15-10

Investment Banking Services 15-11

Origination 15-11

Underwriting 15-12

Distribution 15-13

The Proceeds 15-13

15.4 IPO Pricing and Cost 15-15

The Underpricing Debate 15-15

IPOs Are Consistently Underpriced 15-15

The Cost of an IPO 15-16

15.5 General Cash Offer by a Public Company 15-18

Competitive versus Negotiated Sale 15-19

The Cost of a General Cash Offer 15-21

15.6 Private Markets and Bank Loans 15-22

Private versus Public Markets 15-22

Private Placements 15-22

Private Equity Firms 15-23

Private Investments in Public Equity 15-24

Commercial Bank Lending 15-25

Concluding Comments on Funding the Firm 15-27

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Ethics Case: Profiting from Death: “Janitor’s Insurance” 15-31

16 Capital Structure Policy 16-1

16.1 Capital Structure and Firm Value 16-2

The Optimal Capital Structure 16-2

The Modigliani and Miller Propositions 16-3

16.2 The Benefits and Costs of Using Debt 16-11

The Benefits of Debt 16-11

The Costs of Debt 16-18

16.3 Two Theories of Capital Structure 16-24

The Trade-Off Theory 16-24

The Pecking Order Theory 16-24

The Empirical Evidence 16-25

16.4 Practical Considerations in Choosing a Capital Structure 16-26

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Appendix: Leasing 16-33

Two Types of Leases 16-33

Motivations for Leasing 16-34

Conflicts between Lessees and Lessors 16-37

Evaluating a Leasing Opportunity 16-39

Summary of Learning Objective / Summary of Key Equations / Self-Study Problem / Solutions to Self-Study Problem / Discussion Questions / Questions and Problems

17 Dividends, Stock Repurchases, and Payout Policy 17-1

17.1 Dividends 17-2

Types of Dividends 17-3

The Dividend Payment Process 17-4

17.2 Stock Repurchases 17-7

How Stock Repurchases Differ from Dividends 17-8

How Stock Is Repurchased 17-9

17.3 Dividends and Firm Value 17-10

Benefits and Costs of Dividends 17-11

Stock Price Reactions to Dividend Announcements 17-13

Dividends versus Stock Repurchases 17-14

17.4 Stock Dividends and Stock Splits 17-16

Stock Dividends 17-17

Stock Splits 17-17

Reasons for Stock Dividends and Splits 17-18

17.5 Setting a Dividend Payout 17-19

What Managers Tell Us 17-19

Practical Considerations in Setting a Dividend Payout 17-19

Summary of Learning Objectives / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems / Sample Test Problems

18 Business Formation, Growth, and Valuation 18-1

18.1 Starting a Business 18-2

Making the Decision to Proceed 18-3

Choosing the Right Organizational Form 18-3

Financial Considerations 18-5

18.2 The Role of the Business Plan 18-10

Why Business Plans Are Important 18-10

The Key Elements of a Business Plan 18-10

18.3 Valuing a Business 18-11

Fundamental Business Valuation Principles 18-12

Business Valuation Approaches 18-13

18.4 Important Issues in Valuation 18-26

Public versus Private Companies 18-26

Young (Rapidly Growing) versus Mature Companies 18-27

Controlling Interest versus Minority Interest 18-28

Key People 18-28

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

19 Financial Planning and Managing Growth 19-1

19.1 Financial Planning 19-2

The Planning Documents 19-2

Concluding Comments 19-5

19.2 Financial Planning Models 19-5

The Sales Forecast 19-5

Building a Financial Planning Model 19-6

A Simple Planning Model 19-7

19.3 A Better Financial Planning Model 19-11

The Blackwell Sales Company 19-11

The Income Statement 19-12

The Balance Sheet 19-12

The Preliminary Pro Forma Balance Sheet 19-15

The Final Pro Forma Balance Sheet 19-17

19.4 Beyond the Basic Planning Models 19-18

Improving Financial Planning Models 19-18

19.5 Managing and Financing Growth 19-20

External Funding Needed 19-21

A Graphical View of Growth 19-23

The Sustainable Growth Rate 19-25

Growth Rates and Profits 19-27

Growth as a Planning Goal 19-27

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

20 Options and Corporate Finance 20-1

20.1 Financial Options 20-2

Call Options 20-2

Put Options 20-4

American, European, and Bermudan Options 20-5

More on the Shapes of Option Payoff Functions 20-5

20.2 Option Valuation 20-6

Limits on Option Values 20-6

Variables That Affect Option Values 20-8

The Binomial Option Pricing Model 20-9

Put-Call Parity 20-12

Valuing Options Associated with the Financial Securities That Firms Issue 20-13

20.3 Real Options 20-15

Options to Defer Investment 20-15

Options to Make Follow-On Investments 20-16

Options to Change Operations 20-17

Options to Abandon Projects 20-17

Concluding Comments on NPV Analysis and Real Options 20-18

20.4 Agency Costs 20-19

Agency Costs of Debt 20-19

Agency Costs of Equity 20-21

20.5 Options and Risk Management 20-22

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

21 International Financial Management 21-1

21.1 Introduction to International Financial Management 21-2

Globalization of the World Economy 21-3

The Rise of Multinational Corporations 21-3

Factors Affecting International Financial Management 21-3

Goals of International Financial Management 21-6

Basic Principles Remain the Same 21-6

21.2 Foreign Exchange Markets 21-7

Market Structure and Major Participants 21-8

Foreign Exchange Rates 21-8

The Equilibrium Exchange Rate 21-10

Foreign Currency Quotations 21-11

21.3 International Capital Budgeting 21-17

Determining Cash Flows 21-17

Exchange Rate Risk 21-17

Country Risk 21-18

The Barcelona Example 21-18

21.4 Global Money and Capital Markets 21-21

The Emergence of the Euromarkets 21-21

The Eurocurrency Market 21-22

The Eurocredit Market 21-22

International Bond Markets 21-22

21.5 International Banking 21-24

Risks Involved in International Bank Lending 21-25

Eurocredit Bank Loans 21-26

Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Discussion Questions / Questions and Problems /
Sample Test Problems

Appendix A Future Value and Present Value Tables A-1

Appendix B Solutions to Odd Problems B-1

Glossary / Subject Index / Company Index

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