Corporate Finance: Study Session 11
Study Session Materials
New Readings from the 2008 CFA Program
Complete List of CFA Program Readings
Topic Overview
Corporate Finance
This study session covers the principles that corporations use to make
their investing and financing decisions. Capital budgeting is the process
of making decisions about which long-term projects the corporation should
accept for investment, and which it should reject. Both the expected
return of a project and the financing cost should be taken into account.
The cost of capital, or the rate of return required for a project, must
be developed using economically sound methods.
Corporate managers are concerned with liquidity and solvency, and use financial statements to evaluate performance as well as to develop and communicate future plans. The final reading in this study session is on corporate governance practices, which can expose the firm to a heightened risk of ethical lapses.
Although these practices may not be inherently unethical, they create
the potential for conflicts of interest to develop between shareholders
and managers, and the extent of that conflict affects the firm’s
valuation.
View learning outcome statements (LOS) for reading objectives.
New Readings from the 2008 CFA Program
|
"Working Capital Management"
Edgar A. Norton, Jr., Kenneth L. Parkinson, and Pamela P. Peterson (CFA Institute, 2006) |
View LOS |
|
"Financial Statement Analysis" Pamela P. Peterson (CFA Institute, 2006) |
View LOS |
Complete List of Readings from the CFA Program
|
Members may download these designated readings. Log in for access. |
|
“Capital Budgeting” Ch. 2, pp. 1-22, John Stowe and Jacques R. Gagne, Corporate Finance for the CFA Program (CFA Institute, 2007) Member download (PDF) |
|
View LOS |
|
“Cost of Capital" Ch. 3, pp. 1-20, Yves Courtois, Gene C. Lai and Pamela P. Peterson, Corporate Finance for the CFA Program (CFA Institute, 2007) Member download (PDF) |
|
View LOS |
|
"Working Capital Management"
Edgar A. Norton, Jr., Kenneth L. Parkinson, and Pamela P. Peterson (CFA Institute, 2006) |
View LOS | |
|
"Financial Statement Analysis" Pamela P. Peterson (CFA Institute, 2006) |
View LOS | |
|
“The Corporate Governance of Listed Companies: A
Manual for Investors” (CFA Institute, 2005) Free download (PDF) |
View LOS |