A Practical Guide to Corporate Finance Breaking the Financial Ice

This textbook offers an approachable guide to all key concepts within corporate finance. Emphasizing the use of common sense rather than number-crunching models, it provides a compact, easy to read experience for any reader, practitioners and students ali

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A Practical Guide to Corporate Finance Breaking the Financial Ice Christophe Thibierge Associate Professor of Finance, ESCP Europe

and

Andrew Beresford Adjunct Professor of Business Communications, ESCP Europe

© Christophe Thibierge and Andrew Beresford 2015 Foreword © Ouahcene Ourahmoune 2015 Softcover reprint of the hardcover 1st edition 2015 978-1-137-49251-7 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published in French 2013 as Comprendre Toute la Finance By Les Éditions Vuibert, Paris First published in English 2015 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-55265-8 ISBN 978-1-137-49254-8 (eBook) DOI 10.1057/9781137492548 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Thibierge, Christophe. A practical guide to corporate finance : breaking the financial ice / Christophe Thibierge, Associate Professor of Finance, ESCP Europe, Andrew Beresford, Adjunct Professor of Business Communications, ESCP Europe. pages cm Includes index. 1. Corporations – Finance. 2. Investments. 3. Corporations – Valuation. I. Beresford, Andrew, 1965– II. Title. HG4026.T48 2015 658.15—dc23

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Writing, when properly managed (as you may be sure I think mine is) is but a different name for conversation. Laurence Stern, The Life and Opinions of Tristram Shandy, Gentleman (1759—1767)

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Contents List of Figures

viii

List of Tables

ix

Foreword Ouahcene Ourahmoune

xii

Unpaid Debts

xiv

Presentation and User’s Guide

xv

Introducti