Corporate Finance (Revised Edition)

Author: Huang Jisheng
Publisher:
Publish Date: 2001-01-01
Features: With the development of China's socialist market economy and the increasing openness of its economy, the gradual formation of modern corporate systems has led to greater emphasis on modern financial management theories and methods in Chinese enterprises. Mastering these theories and methods has become a fundamental quality required of qualified corporate operators and managers. This book was written as a teaching material for the undergraduate programs in "Finance" and "International Economics and Trade" at the School of Finance, East China Normal University. The book has the following characteristics in terms of content and structure:
First, in terms of content, this book focuses on elaborating the basic theories of modern corporate financial management and the technical methods of analysis and management. The author believes that a country's corporate financial regulations and rules are subject to frequent changes, especially in China, where the economy is still undergoing a transformation, and both corporate systems and capital markets are yet to be fully developed and refined. Excessive discussion of financial regulations and rules in the content would hinder students' grasp of basic theories and analytical management methods. At the same time, considering that the target audience of this textbook will increasingly engage in international business activities, it is important to enhance their understanding of general international practices. Therefore, the book emphasizes the introduction of general norms and common practices in areas such as financial markets, government taxation, and corporate financing methods.
Second, modern financial management theory is built on a developed financial market. Therefore, in connection with this:
1. Its basic analytical method is cash flow analysis, particularly the discounted cash flow method. For this reason, the book introduces the concept of cash flows generated by assets after explaining the cash flow identity in Chapter 3. In subsequent chapters on investment project evaluation and corporate asset evaluation, it provides an in-depth discussion of categories such as project cash flows and corporate total asset cash flows, to help readers grasp this analytical method.
2. The core content of modern financial management is the trade-off between risk and return. Risk-return analysis is essentially financial analysis and decision-making, including capital project decisions, corporate capital cost and capital structure decisions, and short-term financial decisions. The book provides a relatively detailed introduction to the theory and basic methods of risk-return analysis in Chapter 5, with a focus on explaining the relationship between the expected return on financial assets and corporate capital costs.
Third, to facilitate readers' learning and understanding, the book avoids abstract discussions of relevant theories and methods, primarily explaining them through examples. To make the content more accessible, practical, and actionable, the book does not delve into certain theoretical differences and excludes some advanced mathematical content. For further research and study, the book includes a reference list at the end.