This book examines the nature of the stock market and its implications for corporate management. It provides an introduction to core issues in finance and differs from traditional textbooks in its recognition that "finance is not physics" — in the sense that how markets behave today is not necessarily how they will behave tomorrow. Nevertheless, a certain level of "physics" can be recognized as underpinning the development of stock market valuations and corporate financial decision-making.
In short, the objective of the text is to instill insight in regards to the functioning of markets and corporate behavior, as opposed to algebraic derivations from unrealistic assumptions. Rather than subscribe unthinkingly to an "efficient market hypothesis", at each stage of the development of the text's conceptual framework, we also recognize the reality of market "sentiment" and the fundamental uncertainty that managers face in their decisions.
Based around a teaching programme with worked questions and solutions, Stock Markets and Corporate Finance is the perfect accompaniment for MBA, undergraduate and graduate students looking for a critical textbook on the nature of the financial sector and corporate finance.
Sample Chapter(s)
Introduction (519 KB)
Power-point slides and short videos (with enhanced captions) of each chapter, as well as suggested exam papers with solutions are accompanied with this book.
Power-point Slides
Chapter 1: Introduction (2 MB)
Chapter 2 (Part 1): The Players (1 MB)
Chapter 2 (Part 2): Black Monday (1 MB)
Chapter 2 (Part 3): The dot.com Bubble (799 KB)
Chapter 2 (Part 4): The GFC (1 MB)
Chapter 3: The Time Value of Money and Financial Planning (3 MB)
Chapter 4: Market Debt, Interest Rates and Bond Valuation (2 MB)
Chapter 5: The Valuation of Equity Shares (3 MB)
Chapter 6: Shareholders' Required Rate of Return (CAPM) (2 MB)
Chapter 7: Accounting Statements and Ratio Analysis (2 MB)
Chapter 8: Financial Leverage (4 MB)
Chapter 9: Valuation of Cash Flows (2 MB)
Chapter 10: Currency Exchange Rates (3 MB)
Chapter 11: Derivative Instruments_Hedging Currency Risk (3 MB)
Chapter 12: Investment Decision-Making_Theory and Practice (1 MB)
Chapter 13: Equity Value and Personal Taxe (2 MB)
Chapter 14: Financial Leverage (Revisited) (3 MB)
Chapter 15: Valuation of the Firm's Cash Flows (Revisited) (2 MB)
Chapter 16: Ethical Behaviour (3 MB)
Introductory Videos (Chapters 1–12)
Chapter 1: Introduction
Chapter 2: A Short History of Stock Markets
Chapter 3: The Time Value of Money and Financial Planning
Chapter 4: Market Debt, Interest Rates and Bond Valuation
Chapter 5: The Valuation of Equity Shares
Chapter 6: Shareholders' Required Rate of Return (The Cost of Equity Capital)
Chapter 7: Accounting Statements and Ratio Analysis
Chapter 8: Financial Leverage
Chapter 9: Valuation of Cash Flows
Chapter 10: Currency Exchange Rates
Chapter 11: Derivatives Instruments: Futures and Options and Hedging Currency Risk
Chapter 12: Investment Decision-Making
Sample Exam Papers
Exam Paper 1 (with Solutions) (66 KB)
Exam Paper 2 (with Solutions) (65 KB)