H1 Exam Notes

Description

Comprehensive exam notes with self-made explanatory diagrams Topic 1: Raising capital – Equity 2 Equity characteristics 2 Initial public offerings 2 seasoned equity offerings 4 Topic 2: Raising capital – Debt and leasing 6 The nature of debt 6 Leasing 7 Topic 3: Issues with WACC and capital structure policy 9 WACC 9 Capital structure 10 topic 4: Payout policy 13 MM Dividend irrelevance theory 13 Factors affecting payment of dividends 14 Share buybacks 15 Topic 5: Advanced topics in capital budgeting: Comparing mutually exclusive projects with different lives 16 Constant chain of replacement (CCR) 16 Retirement decisions 18 Replacement decisions 18 Conflicts between methods 19 Topic 6: Advanced topics in capital budgeting: Sensitivity, break-even and decision tree analyses 19 sensitivity analysis 19 Break-even analysis 20 simulation analysis 20 decision-tree analysis 21 Topic 7: Real options analysis 22 Three Common Examples of real options 22 Topic 8: Analysis of takeovers 25 types of acquisitions: Terminology 25 method of payment 25 Regulation of takeovers 26 takeover defences 27 Financial evaluation of a takeover 28 economic rationale for takeovers 29 empirical evidence 30 Topic 9: Corporate restructuring 31 rationale for restructuring 31 alternative types of restructuring 31 empirical evidence for restructuring 32 topic 10: Risk management 33 reasons for hedging 33 Risk management methods 34