I-4 Index
Financing, short-term, 500–501
Fixed assets turnover ratio, 91
Fixed exchange rate, 540
Fixed-peg arrangement, 542
Fixed-rate bond, 197
Float, 487
Floating exchange rate, 540
Floating-rate bond, 197
Flotation cost, F, 319
added to project cost, 318
Flotation cost adjustment, 319
Ford Motor Company, 43, 122,
241, 451, 492
Forecasted balance sheet, 519
Forecasted " nancial statements,
518 –522
inputs, 518
ratios and EPS, 520
used for operations, 520
Forecasted income statement, 519
Foreign bond, 196, 552
Foreign exchange rate quotations,
542–544
Foreign trade de" cit, 184
Formula approach, 127
Forward exchange rate, 540, 545
Founders’ shares, 273
Fractional time periods, 150
Free cash # ow, 68
and small businesses, 69
Free trade credit, 495
Freely-# oating regime, 541
Frito-Lay, 81
Funds, spontaneously
generated, 514
Future value (FVN), 125–130
Futures market, 30
FVAN, 135G
General Electric, 2–3, 9, 12, 14,
215, 231, 232, 306, 355, 492,
509–512
creating value at, 306
General Motors, 19, 231, 232, 273,
451, 492
General Motors Acceptance
Corporation (GMAC), 491
Georgia-Paci" c Corporation, 417
Global accounting standards, 97
Global corporations, 535–538
Global perspectives boxes, 14, 38,
97, 250, 322, 380, 428, 449, 555
Global variations in the cost of
capital, 322
Going public, 41
Goldman Sachs, 47
Goodyear, 460Google Inc., 3, 43, 45, 283, 287
Gordon-Lintner’s theory, 443
Greenmail, 460
Growth rate, g, 276
Growth vs. dividends, 280–282
Gulf Oil, 271H
Half-year convention, 397
Hamada equation, 415
Hedge funds, 35
Herman Miller, Inc., 489
Hewlett-Packard, 7, 368, 459, 534
Historical risk premium, 315
Holder-of-record date, 453
Home Depot Inc., 14, 364, 366, 367,
460, 475, 488
Horizon (terminal) value, 284
Hostile takeover, 19
Hughes Aircraft, 273
Humped yield curve, 176
Hypothesis, 444I
IBM, 14, 19, 33, 368, 460, 492, 534
Incentive signaling, 444
Income bond, 200
Income statement, 61–63
forecasted, 519
Income taxes, 70–75
Incremental cash # ow, 366
Indenture, 215
Independent projects, 340, 352
Indexed (purchasing power)
bond, 200
Indirect quotations, 544
In# ation, 163
and interest rates, link
between, 178
impact of expected, 253
interest rates and exchange
rates, 550–551
In# ation premium (IP), 170
Information content (signaling), 444
Initial public offering (IPO)
market, 41
Inputs, changes to, 372
Intel, 45, 368
Interbank foreign currency
quotations, 543
Interest, simple vs. compound, 126
Interest charges, calculating, 497, 498
Interest rate, I, " nding, 133–134, 140
Interest rate(s), 162, 550–551
and business decisions, 185–187
and in! ation, link between, 178
comparing, 148–150Effective (equivalent) annual
rate (EFF% or EAR), 149
term structure of, 175–176
yield curve used to estimate
future, 180–182
Interest rate (price) risk, 210
Interest rate levels, 165–168
macroeconomic factors
in! uence, 183–185
Interest rate parity, 546–547
Interest rate risk, 173
Internal rate of return (IRR),
341 –344
International capital budgeting,
556–558
International capital structures,
558–559
International credit markets, 551
International factors, 184
International money and capital
markets, 551–554
International monetary system,
540 –542
International money
terminology, 540
International stock markets,
552, 553
International stocks, investing in,
555–556
Internet, " nancial analysis on
the, 68
Intrinsic value vs. stock price,
273–275
Intrinsic value, 11, 274
investor concerns, 274
stock prices, and executive
compensation, 10–13
Inventories, 488–489
modifying, 524
Inventory conversion period, 479
Inventory turnover ratio, 90
Inverted (abnormal) yield
curve, 176
Investing overseas, 554
Investment, vertically
integrated, 536
Investment bank, 34
Investment horizon, 213
Investment opportunities, 456
Investment policies, current asset,
474–475
Investment-grade bond, 216
Investor, marginal, 12
IRR compared to NPV, 343J
JPMorgan Chase, 34
Junk bond, 216