Index 651story model, 263–265
types of, 261–262
Buy-sell agreements, 345–347
Cabot, Louis B, 513
California First Bank, 360, 361
Capital asset pricing model (CAPM), 613– 615
Capital budgeting, 188, 291–313
cost of debt financing, 303–304, 606,
615– 616
decision rules, 292, 307–311
discount rate, 303–307, 613
divisional vs. firm cost of capital, 307
economic value added (EVA), 311, 312
forecasting cash f low, 297–299
leverage effects, 305–307
real options, 312
recent innovations in, 311–312
weighted average cost of capital (WACC),
304–305
Capitalization rate/factor, 612
Cash:
budget, 184–185, 189–190
deals, acquisitions (vs. stock deals), 582–583
equivalents, 18
synthetic, 439
Cash f lows:
forecasting, 292–299
nonrecurring items, 54–58, 90
statement of, 8–10, 11, 15, 54–58, 77,
190–191
Cerent Corporation, 572–573
Chambers, John, 572
Champion Enterprises, 46
Chase Manhattan, 576
Chief executive officers (CEO), 526 –527
acquisitions and, 566
appraisal of, 512–513
board of directors and, 512–514
compensation, 520–522
terminating, 518–519
Cisco Systems, 530–531, 543, 566, 571–573, 582,
587, 588
Citicorp, 575
Client-server network, 164, 165
Collateralized mortgage obligations (CMOs), 428
Comfort letter, 472, 505–509
Commodities, 409
Company/product description (business plan
section), 271–273
Compaq, 373, 374
Compensation, 283, 315–317, 325–330, 520–523
Competitors. See also Industry(ies)
analysis, 269–270, 271, 274
financial ratio comparisons, 29
risks section of business plan (competitor
actions/retaliation), 284–285
Computer components, 152–155
Computing,“ubiquitous,” 538
Conglomerate merger, 563–564
Conoco Inc., 405
Consolidation, 562
Control(s):
budgeting and, 174, 178–181, 201–208,
219–220
business entities/forms and, 228, 237–244
discount for lack of, 622
information technology, 551–552
interest, 622
premium, 619
Cookies, 169
Core earnings. See Sustainable earnings
Corporation:
continuity of life, 234–235
control, 238–243
directors, 241–243
formation, 229–231
liability, 245–247
officers, 243
out-of-state operation, 232
professional, 227, 233
sale of, 350–351
stockholders, 239–240
subchapter S, 227, 252–253, 318–322
taxation, 249, 250–253, 318–322
transferability of interest, 236
Cost(s):
awareness (budgeting function), 176
behavior estimation (methods of ), 116 –120
benefits, mergers/acquisitions, 576
of capital, 304–305, 307, 606 – 608
of debt, 303–304, 606, 615– 616
of equity, 606, 613– 615
estimating headcount schedule, 287–288
fixed, 215–217, 218–219
of goods sold (budgets), 183–186
opportunity, 298
standard, 218–219
structure analysis, 104–106
sunk, 299
variable, 208–213, 218
Cost-volume-profit (CVP) analysis, 102–125
CVP analysis chart, 107, 108
for decision making, 109–111
high-low analysis, 118–119
in multiple product situation, 112–115
price discrimination, 111–112
regression analysis, 119–120
role of pricing, 121–123
sensitivity analysis, 113, 116
visual fit, 118–119
Coverage ratios (valuation), 601
Covey Systems, 588
Covisint, 555
CPA (certified public accountant), 12–13
Cross-border deals, 586