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Library | Item Barcode | Call Number | Material Type | Item Category 1 | Status |
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Searching... | 30000004995209 | HD30.4 G83 2005 | Open Access Book | Book | Searching... |
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Summary
Summary
A timely guide for those investing in research and development.
Completely updated and expanded, this edition examines the relationship between managing research development (R&D) and sustaining sound financial policy. Through extensive fieldwork and consulting, the author demonstrates how to balance and manage R&D efforts, capital investment, and new debt financing decisions. He also offers a framework for understanding the interdependence between these elements and tools that include financial modeling techniques for determining resource allocation.
Author Notes
John B. Guerard, Jr. is a faculty member at Rutgers University and a financial consultant to several financial institutions and money managers, including serving on the Virtual Research team of GlobeFlex Capital Management, Inc.
Table of Contents
Preface | p. ix |
About the Author | p. xi |
Chapter 1 Corporate Financial Policy and R&D Management | p. 1 |
Chapter 2 An Introduction to Financial Statements | p. 3 |
The Balance Sheet | p. 3 |
Assets | p. 4 |
Liabilities and Capital | p. 10 |
Current Liabilities | p. 10 |
Long-Term Debt | p. 11 |
Capital Section of the Balance Sheet | p. 12 |
Book Value of Common Stock | p. 14 |
Consolidated Balance Sheets | p. 14 |
The Operating Statements: The Income Statement and Sources and Uses of Funds | p. 18 |
Sources and Uses of Funds | p. 24 |
Chapter 3 Ratio Analysis | p. 31 |
Ratio Analysis and the Firm's Perceived Financial Health | p. 31 |
Current Analysis Ratios | p. 32 |
Leverage Ratio | p. 33 |
Sales Efficiency Ratio | p. 34 |
Profitability Ratios | p. 34 |
Financial Ratios and the Perceived Financial Health of Firms | p. 35 |
Time Series of Ratios in the United States, 1970-2003 | p. 37 |
Limitations of Ratio Analysis | p. 38 |
Chapter 4 Debt, Equity, Financial Structure, and the Investment Decision | p. 41 |
Definition of Leverage-Profits and Financial Risk | p. 42 |
The Pure Theory of the Optimal Financial Structure | p. 44 |
Modigliani and Miller-Constant Capital Costs | p. 46 |
The Optimal Capital Structure and the M&M Hypothesis | p. 48 |
Empirical Factors Influencing Financial Structures | p. 49 |
Cost of Capital | p. 50 |
Real Options and the Investment Decision | p. 53 |
Abandonment Value | p. 54 |
Option to Delay a Project | p. 66 |
Implications of Viewing the Right to Delay a Project as an Option | p. 67 |
Chapter 5 An Introduction to Statistical Analysis and Simultaneous Equations | p. 69 |
The Linear Regression Model | p. 71 |
Multiple Regression | p. 79 |
Least Squares Estimates of the Regression Coefficients | p. 80 |
Multiple Coefficient of Determination | p. 81 |
Estimation of Simultaneous Equations Systems | p. 82 |
Estimation of Parameters in Multiple Equation (Regression) Models | p. 84 |
Two-Stage Least Squares (2SLS) | p. 86 |
Three-Stage Least Squares (3SLS) | p. 89 |
The Three-Stage Least Squares Estimator | p. 89 |
Chapter 6 Interdependencies among Corporate Financial Policies | p. 93 |
The Model | p. 94 |
The Data | p. 178 |
Estimated Simultaneous Equations Results | p. 178 |
Chapter 7 Comparing Census/National Science Foundation R&D Data with Compustat R&D Data | p. 181 |
Innovation, R&D, and Stockholder Wealth | p. 182 |
Financial Decision Estimation Results | p. 183 |
Comparison of R&D Expenditure Data | p. 186 |
Comparison of Regression Results | p. 188 |
Relation of Current Results to Prior Research | p. 193 |
Extensions of the Simultaneous Equations Approach | p. 195 |
Summary and Conclusions | p. 197 |
Suggestions for Future Research | p. 198 |
Chapter 8 The Use of Financial Information in the Risk and Return of Equity | p. 201 |
Introduction to Modern Portfolio Theory | p. 209 |
Determinants of Stock Selection Models | p. 212 |
Further Estimations of a Composite Equity Valuation Model | p. 213 |
Appendix 8.A Multifactor Risk Models | p. 218 |
BARRA Model Mathematics | p. 219 |
Risk Prediction with Multiple-Factor Models | p. 220 |
Appendix 8.B US-E3 Descriptor Definitions | p. 227 |
Volatility | p. 227 |
Momentum | p. 229 |
Size | p. 229 |
Size Nonlinearity | p. 229 |
Trading Activity | p. 229 |
Growth | p. 230 |
Earnings Yield | p. 232 |
Value | p. 232 |
Earnings Variability | p. 233 |
Leverage | p. 233 |
Currency Sensitivity | p. 234 |
Dividend Yield | p. 235 |
Non-Estimation Universe Indicator | p. 235 |
Chapter 9 The Optimization of Efficient Portfolios: How the R&D Quadratic Term Enhances Stockholder Wealth | p. 237 |
Efficient Portfolio Optimization Results | p. 238 |
Chapter 10 The (Not So Special) Case of Social Investing | p. 249 |
Stock Selection in Unscreened and Screened Universes | p. 253 |
Stock Selection and the Domini Social Index Securities | p. 258 |
Recent Socially Responsible Research | p. 258 |
Summary and Conclusions | p. 259 |
Chapter 11 R&D Management and Corporate Financial Policy: Conclusions | p. 261 |
Exercises | p. 263 |
Notes | p. 265 |
References | p. 271 |
About the CD-ROM | p. 281 |
Index | p. 283 |