I-11IndexI-11pools 669
returns rate see rate of return
storytelling 382
tax relief stimulus? 355–6
worked example 338–42
see also beta; future value; time value
of money
investment bankers 137, 437, 442
investment banking 8–9
conflicts within 180, 443
primary markets and 178–80
public sale of securities and 440–5
investment flows 37
investment function see capital
budgeting
investment horizon 76
investment-grade bonds 513
investors 149, 170, 448, 458, 612–13
borrowing at same rate 472
IPO initial return 448
by country 449
IPO underpricing 448, 450
irrelevance proposition 473–4
Islamic finance 502–3
issuer risk, changes in 135–6
J
Japan
foreign bond markets 514
venture capital and private equity
markets 709 – 11
Japanese yen 609, 789
joint and several liability 17
junk bonds 145, 513
just-in-time (JIT) system 639
K
Kangaroo bonds 439, 514
key value drivers 410
L
lawyers 437
lead underwriter 179
lease contracts 521
leasehold improvements 526
leases
arrangements 521
types 519–20
lease-versus-purchase (or -buy) decision
521–4
leasing
advantages and disadvantages 525–6
arrangements 521
effect on future financing 524–5
long-term debt and 500–26
types 519–20
legal organisational structure 16–20
lending-versus-borrowing problem 330
lessee 519, 524
lessor 519, 524
leverage
earnings per share (EPS) 469–70
increased value? 471
leveraged buyouts (LBOs) 689 , 718
leveraged leases 521
leveraged recapitalisation 743
leveraged-buyout (LBO) 742 – 3
liabilities 31, 73–4, 435, 574–6,
767–8, 790
‘spontaneous liabilities’ 32, 39
liability 16
lien 505, 648
limited liability companies (LLCs) 19–20
limited partners 17
limited partnerships (LPs) 17–18, 692 ,
693 , 699
line of credit 506, 589, 632 , 678 ,
679–80, 690
liquid assets 677
liquidation 14, 503, 765 , 767 , 769 ,
773 , 775–6
proof of debt 771
liquidation value 173, 367
liquidity 452, 525, 583, 633 , 635 ,
677 , 678 , 694
of debt markets 720
descending order – balance sheet 31
motive for maintaining 676–7
liquidity management 662 , 686
liquidity preference theory 150
liquidity ratios 43–4
litigation 443
case study 564–5
loan agreements 538
loan amortisation 100–3
level payment streams 100–2
loan amortisation schedules 100
monthly payments 103
loan covenants 486, 501–3
loans 501, 504–8, 632 , 690
lending versus borrowing (IRRs) 330
maturity and size 503–4
local currency (LCY) bond markets 499
lockbox systems 667 , 668–9, 674
London Interbank Offered Rate
(LIBOR) 139, 501, 503, 506, 509,
678 , 800 , 804 , 808long position 265
long-term debt 33, 500–4
cost 503–4
leasing and 500–26
long-term financing 433–59, 464
advisers 437
basic choices 433–9
long-term investment 617–20
long-term planning 571
finance, role of 571–2
losses 18, 54, 135–6, 192, 410–11,
737–8, 791 , 805
low-regular and extra payout policy 539
lump sums 76–8
future value 68–72
general equation, compounding
considerations 97
present value of 72–5
‘waiting time’ 75M
mail float 663
mail-based collection systems 667
maintenance clauses 521
maintenance margin 803
managed floating rate system 603–4
management buyouts (MBOs) 718 ,
742 – 3
management consulting 9–10
managerial acquisitions 731 – 3
managerial flexibility 323
managing director 19
margin account 803
marginal bad debts 646 – 7
margins 29, 33, 42–3
market capitalisation 230–1, 459
market demand 570, 578
market index 230
market makers 180
market multiples 174–8, 367
market portfolio 243
market position 728 – 9
market ratios 51–2
market research 415
market risk premium 244–8
market segmentation theory 150–1
market valuation 174, 453
market value 317, 544
marketable securities see short-term
investment 31, 41, 633
market/book (M/B) ratio 52
markets 14–15, 435–8, 447
for bonds 143–6