Principles of Corporate Finance_ 12th Edition

Index I-9

bre44380_idx_I1-I24 9 09/30/15 01:56 PM

Frank, M., 482n

Franks, J. R., 470, 470n, 664 n, 827 n, 861 n,

863, 863n, 874n

Fraud, 10 –12

Fraudulent conveyance, 474n

Freddie Mac, 52, 344, 374, 624, 802, 852

Free cash flow (FCF)

in business valuation, 94–95, 496–498

financial slack and, 94, 97–98, 483,

496–498

valuing businesses, 496–498

Free-cash-flow problem, 303

French, Kenneth R., 167n, 205 n, 205n, 209,

209 n, 335 n, 339 n, 350, 478n, 482 n,

891, 891n

Fried, J., 321

Friedman, E., 880, 880n

Froot, K. A., 337n, 677 n, 698, 713n, 726

Full-payout leases, 653

Full (dirty) price, 49n

Full-service leases, 653

Fürstenberg, Carl, 876n

Futures contracts, 680–686, 709

commodity, 684–686

hedging with, 680–686, 691–693

mechanics of trading, 681–683

speculation in, 695–696

trading and pricing, 683–684

valuing, 684

Futures exchanges, 680–686

Futures markets, 284, 680–686

Future value

of annuity, 33

calculating, 19–20

defined, 19–20

net present value and, 25

G

Gabaix, X., 308n

Gadanecz, B., 638n

Galai, D., 822n

Gale, D., 377, 881n, 884

Gambling for redemption, 304, 304n, 675 n

Gao, P., 641n

Gaspar, V., 881n

Gates, Bill, 27

Gavazza, A., 659n

Gazprom, 852

Gearing. See Financial leverage

GE Capital Aviation Services, 652

GE Capital Corporation, 640, 652

Geely, 835

Geithner, Tim, 68

Geltner, D., 229n

Genentech, 383

General cash offers, 394–398

costs of, 395–396

international security issues, 395

market reaction to, 396–398

General Electric (GE), 76–78, 136, 320n,

813,  827

General Growth Properties, 858

Generally accepted accounting principles

(GAAP), 79, 306, 734

General Motors (GM), 132, 384, 415, 484, 619,

641, 762, 817, 858, 859, 861

Fixed-cost beta, 231–232

Fixed-income market, 48

Fixed-rate debt, 364

Flat (clean) price, 49n

Flexible production and procurement,

583–587

Floating charge, 639

Floating-price convertibles, 634–635

Floating-rate debt, 364, 600, 600n, 687–689

Floating-rate notes, 620

Floor, 620

Flooring charge, 639n

Flow-to-equity method of valuing companies,

500–501

Fluidigm, 396

FMC Corporation, 849

Forcing conversion, 631

Ford Credit, 484, 641

Ford, Henry, 872, 872n

Ford Motor Company, 38, 174, 175, 175 –179,

181, 181, 193–197, 195, 196, 200, 309, 483,

484, 641, 723, 817, 835, 872, 878

Forecasts

in capital budgeting process, 250–251,

284–287

cash flow, 25–26, 107–108, 140–141, 500

correcting optimistic, 234–235

earnings per share, 319–320

economic rents in, 284–287

market values in, 279–282

prediction markets, 347

Foreign bonds, 629

Foreign Credit Insurance Association

(FCIA), 795n

Foreign currency debt, 67–68

Foreign exchange risk, 707–723

basic relationships, 709–717

economic exposure, 719

foreign exchange market, 707–723

hedging currency risk, 676, 717–719

international investment decisions,

720–723

transaction exposure, 719

Forelle, C., 563n

Forest Laboratories, 813

Forest Labs, 830

Fortis, 375

Forward contracts, 679

forward exchange rates, 708–709

forward market, defined, 708

forward rate agreements (FRAs), 686

homemade, 686, 687

simple, 679

speculation in, 695–696

Forward exchange rates, 708–709

Forward interest rate, 686

Forward premium, 709, 710–711

Forward prices, 679

Forward rate agreements (FRAs), 686

Forward rate, expectations theory of,

713–714

Forward rate of interest, 59n

France

compounding intervals in, 47–48

government bond valuation, 47–48

nominal versus real interest rates,

715–717

ownership and control in, 875

current versus future consumption
and, 17–18
financial institutions in, 358–359,
370–372, 867–871
information provided by, 373–374
initial public offerings (IPOs),
384–394, 854
international capital markets, 395,
867–871
investor protection and, 871
nature of, 8, 8n, 367
new, 893
pooling risk and, 373, 676–678
role of, 372–375
as source of financing, 372–375
Financial planning, 759–779
choosing a plan, 776–777
growth and external financing, 777–778
long-term, 772–777
models for, 759–762
pitfalls in model design, 776
short-term, 653, 759–762, 769–772
Financial ratios, 732–752
Du Pont system, 743–744
efficiency, 741–743
for Home Depot, 751, 752
interpreting, 748–752
leverage, 744 –746
liquidity, 746 –748
p er for ma nce, 737–741
Financial risk, 443–446
Financial slack
defined, 483
free cash flow and, 94, 97–98, 483,
496–498
Financial statements, 733–752
balance sheet, 734–736, 763
common-size, 748–750
income statement, 736–737, 763
in merger analysis, 828–829
statement of cash flows, 762–766
Financial structure. See Capital structure
Financial Times, 75
Financing decisions. See also Capital
structure; Corporate financing; Debt
financing; Efficient-market hypothesis;
Equity financing; Leasing; Mergers
adjusted present value (APV), 491,
508 –511
adjusting discount rate through weighted
average cost of capital (WACC),
4 48 – 452, 491–507, 512 –515
defined, 2
examples, 3
investing decisions versus, 5, 138, 141, 329
mergers in, 821–822
net present value and, 138, 141
valuing businesses, 496–501
weighted-average cost of capital in,
448–452, 491–496
Firms. See Corporations
First Data, 844
First-stage financing, 380
Fisher, A. C., 283n
Fisher, F., 522n
Fisher, Irving, 63–64, 712n
Fisher Scientific, 851
Fitch credit ratings, 66, 608, 640n