Fundamentals of Financial Management (Concise 6th Edition)

Index I-3

Current ratio, 88
Current yield, 205

D

D’Leon Inc., 81, 1 18
Days sales outstanding (DSO), 90
Dealer market, 40
Debenture, 215
Debt, 400
Debt " nancing, used to constrain
managers, 424
Debt management ratios, 92–95
Debt ratio, 94
Decision tree, 383
Declaration date, 453
Default risk, 214–220
Default risk premium (DRP), 172
Dell, 287, 368, 460
Delta Airlines, 173, 241
Demand deposits, 486
Depreciation of currency, 541, 550
Depreciation rates, effect of
different, 371
Depreciation, 63
Derivative, 33
Determinants of market interest
rates, 168–174
Deutsche Bank, 47
Devaluation of currency, 540
Direct investments, 551
Direct quotations, 544
Discount bond, 202
Discount on forward rate, 545
Discounted cash! ow (DCF)
approach, 315
Discounted dividend model,
275–278
vs. corporate valuation, 290
Discounted payback, 354
Discounting, 131
Discounting process, graphic
view, 132
Discounts, 490
Diversi" able risk, 243
Diversifying overseas, bene" ts
of, 250
Dividend distribution, 440
Dividend irrelevance theory, 442
Dividend policy,
alternative capital, 456
constraints on, 456
effects of, 457
factors in! uencing, 455–457
in practice, establishing, 446–454
investment opportunities, 456
issues in, 444–445
Dividend reinvestment plan
(DRIP), 454–455

Dividend yield, 276

Dividend yields around the

world, 449

Dividends,

earnings, and cash! ows, 451

reasons preferred, 442

vs. capital gains, 441–444

vs. growth, 280–282

Dividend-yield-plus-growth-rate

approach, 315

Domestic vs. multinational " nancial

management, 538–539

Dow Chemical, 534

Dow Jones Industrial Average, 45

DuPont equation, 101–102

Duration, 21 1

Dutch auction, 43

E

Eagle, 81

Earnings, cash! ows, and

dividends, 451

EBITDA, 63

Economic value added (EVA) vs.

net income, 108

Effective (equivalent) annual rate

(EFF% or EAR), 149

Ef" cient markets hypothesis

(EMH), 47, 49

semi-strong form, 47

strong form, 47

weak form, 47

Electronic communications

networks (ECNs), 38

Enron, 11, 14, 17, 15, 16, 106, 219

Equilibrium stock prices, changes

in, 302–303

Equilibrium, 12, 302

Eurobond, 552

Eurocredits, 551

Eurodollar, 551

European terms, 543

EVA approach, 290

Excess capacity adjustments, 517

Exchange rate, 540, 550–551

Exchange rate risk, 554

Exchange traded funds, 35

Ex-dividend date, 453

Executive compensation, intrinsic

values, stock prices, and, 10–13

Expansion project, analysis of,

369–372

Expected dividends, basis for

stock value, 277

Expected in! ation, impact of, 253

Expected rate of return, rˆ, 234, 276

Expected return on a portfolio,

(rˆp), 241

Expected risk premium, 315

Expected total return, 276

External capital, cost of raising, 319

External equity, when to use, 320

Externality, 367

environmental, 368

negative within-" rm, 367

positive within-" rm, 368

ExxonMobil, 14, 215, 299

F

Fannie Mae, 19

Federal budget de" cits or

surpluses, 184

Federal reserve policy, 183

Finance,

capital markets, 5

corporate, 5

de" ned, 4–6

investments, 5

jobs in, 6

vs. economics and accounting, 4

within an organization, 4

Finance theory, behavioral, 49

Financial analysis on the Internet, 68

Financial calculators, 127, 128

Financial! exibility, 402, 426

Financial institutions, 34–38

Financial leverage, 409

Financial management,

multinational, 534

multinational vs. domestic,

538–539

overview, 2

striking the right balance, 2

Financial markets, 30–34

and institutions, 26

recent trends, 31

types of, 30–31

Financial plan, 512

Financial planning and

forecasting, 509

strategic, 511–512

Financial report, balance sheet,

57–61

Financial risk, 403–407, 408 –413

de" ned, 408

Financial services corporation, 34

Financial statement analysis, 85

analyzing stocks, 85

Financial statements

and reports, 55–56

cash! ow, and taxes, 54

forecasted, 518–522

quality of, 54

warning signs, 106

Financing policies, current asset,

475–478