I-13IndexI-13outsourcing 641
overdrafts 506
oversubscribe (offerings) 180, 450
over-the-counter (OTC) markets 143,
181, 266
over-the-counter options 806
ownership 33, 138, 377, 451, 502, 548,
792
private to public ownership – benefits
and drawbacks 432, 452–4
ownership rights agreements 702
P
paid-in capital in excess of par 33
par value 33, 124, 130, 192
participation rights 702
partnerships 17, 692 , 699 – 700
passively managed mutual funds 251
patents 32, 689
payback decision rule 312–13
payback method 312–15
pros and cons 313–14
payback period 312, 318, 325, 339–40
payment dates (term loans) 505
payment-pattern monitoring 650 – 1
payments systems 671–2
minimum payments 672
receiving, processing and collection
640
payoff 269
payoff diagrams 269
payout policy 535, 536–41
cash dividend payment procedures
536–8
key lessons 555
payment to convey information 553
real-world influences 550–4
types 538–9
pecking-order theory 488–90
pension funds 694 , 696
percentage returns 193–4, 194, 198, 203
percentage-of-sales method 578
perfect capital markets 472, 545–7
performance reporting 700
perpetual bonds 92
perpetuities 86, 92–4, 160–1, 320
personal debt 486
personal income taxes 551
M & M model with 480–1
plain-vanilla bonds 123, 511
plug figure 578
point-of-sale (POS) information systems
667
Ponzi scheme 24
portfolio beta 244
portfolio expected return 237–9
portfolio risk 239–42, 694
portfolio weights 237, 239
portfolios 208, 237–42, 677 , 694 ,
730 , 792
going global 189
payoffs for options portfolios 272–5
risk-free portfolios 283–5
standard deviation–shares number,
relationship 209
positive covenants 142, 501–2, 702
positive pay 674–5
precautionary motive 677
precedent transactions 735
pre-emptive bidding hypothesis 739
pre-emptive rights 458
preferred habitat theory 150–1
preferred shareholders 14
claims senior to ordinary shares;
junior to bonds 139, 159–60
loss endured – extra preferred
dividends 93
no dividends, yet increased share
value 93–4
preferred shares 14, 33, 92, 158–60, 192
valuing 160–1
premium 127
present value (PV) 146, 324
of cash flow streams 86–95
equation 73–5
graphical view 75
of interest tax shields 479–80
of lump sum received in future 72–5
of portfolios 285
pre-tax income 34
price/earnings (P/E) ratio 52
price-to-book ratio see book value
price-to-cash-flow ratio 367
price-to-earnings (PE) ratio 175
pricing 700
pricing multiples 175
primary issues 438
primary market trading 136
primary markets 178–82
primary offerings 445
primary-market transactions 15
prime cost method 362
prime or cash rate 678
principal 14, 42, 69, 124
preservation of 677
principal value 124–5principal–agent problems 314, 472
private debt 501
private equity financing 708
private equity investment
by company development stage 696 – 7
economic effect 697 – 8
fund raising 708 – 9
investment patterns 693 – 4
pricing 704
profitability 705
venture capital and 690–8
private equity limited partnerships
699 – 700
private equity managers
convertible securities use 703 – 4
exit strategies 706 – 7
investments structure 700–3
private equity (PE) 689
commitments 691
comparative performance 705
divestments 706
international markets for 708 – 11
R&D expenditures 709 – 10
private placements 458–9, 501, 504–5,
512
pro forma financial statements 41, 571,
577–82
constructing 578–81
facts–assumptions mix 578
probability 228–9, 514
usage rates/delivery delays 638
probability distribution 202
problem scenarios 572
processing float 663
profit, barometers 21
profit maximisation 21, 443
profitability index (PI) 310, 376, 378
calculating 336–8
profitability ratios 47–51
profit-and-loss (P & L) statement 33
profit/profitability 33, 323, 553, 575
project beta 620
project finance (PF) loans 507–8
project IRR 325–8
project life 318
project risk 317
project size, risk adjustments for 401
promissory notes 120
property 767
property, plant and equipment
(gross and net) 32
proprietary limited companies 18
proprietorship 16