Aug pages. Select type: Paperback. E-Book € · Paperback This book covers the theory and practice of Corporate Finance from a truly Website with free access to statistics, a glossary & lexicon;. I’m glad to hear that Vernimmen’s unique book on finance is now available for Vernimmen’s Corporate Finance, long overdue in English, is an outstandingly. With thousands of copies of the latest edition sold, Corporate Finance, Theory To have a look on the contents of the edition of the Vernimmen click here.

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The new edition of the Vernimmen We are pleased to announce that the third edition of The Vernimmen is now available from all good bookstores and on-line retailers. With thousands of copies of the latest edition sold, Corporate FinanceTheory and Practice has emerged as one of the most popular financial textbook, thanks to its four unique features:. The chapters on financial markets, LBOs, investments and capital structures have been thoroughly overhauled as a result of the crisis.

As most of our professional readers have recently spent a large part of their time in managing working capital, i. We have also done a major updating job to create a tool that is accurate, reliable, comprehensive and relevant.

To make sure that you get the most out of your Vernimmeneach chapter ends with a summary, a series of problems and questions solutions provided. For those interested in exploring the topics discussed in greater depth, there is an end-of-chapter bibliography and suggestions for further reading, covering fundamental research papers, articles in the press and published books. A large number of graphics and tables over have been included in both the appendix and in the body of the text which can be used for comparative analyses.

There are over 3, entries in the index. To have a look on the contents of the edition of the Vernimmen click here and to buy the edition of The Vernimmen, click here.

Corporate Finance is a very useful reference book for students and for operators who will get a great help in the present complex environment to learn the principles of the financial markets and their practical application.

Written in a consequential and logical approach it shows also some interesting cases that make vernijmen study easier and stimulating. After having spent just a few weekends reading it, I felt better equipped for my role in financial management at Paribas.

Recipes and pontification are replaced by a scientific approach. And, thanks to the Newsletter, this is done practically in real time! The Vernimmen is a true bible of corporate finance. With regular updates through their monthly newsletter and upgrades, the authors have fiannce it applicable to any place, any time. This is pretty unique in the field. The 10 eternal truths in finance 2 6.

Letter number 61 of Octobre 2011

In emerging countries, diversified groups are common as the relative lack of development of financial markets makes this form of organisation a substitute for such markets. The xorporate allocates capital among its subsidiaries as if it were a financial market itself. Finande when financial markets develop, this type of organisation must prove that it is still effective. As the vernnimmen of LBO groups changes constantly, they do not have a business line, except the activity of selling companies using leverage finamce then reselling them again!


Tax issues have no role to play here, and believing that they do is a dangerous illusion. Unlike accounting, finance takes the future — and thus risk — into account. We could even go as far as to say that finance is concerned only with the future, and that accounting, by construction is only concerned with the past. Accordingly, accounting cannot take risk into account, as risk is a dimension that does not exist in the past but that is essential to the future. A rise in these figures is not synonymous with an increase in value if it is obtained in exchange for an increase in risk which is not taken into account by the accounting criteria see chapter 28 of the Vernimmen.

Nobody really enjoys paying taxes and many companies and investors spend a lot of time putting existing regulations to the best use in order to pay as little tax as possible.

Our experience has shown us that this time would be put to better finanxe if spent thinking in terms of finance rather than in terms of tax.

Corporate Finance: Theory and Practice by Pierre Vernimmen

We have in fact often seen cases of financial decisions based on tax criteria that vernmimen the end, resulted in fundamental losses that amounted to a lot more than the tax saving made. Any tax gain will have been more than set off by the financial loss! We believe that it is better to take a financial decision and then to apply it, by optimising the tax issues, and not the opposite. History gives us grounds for confidence in the future as illustrated by the trend of the French share price index since This graph is one of the new graphs created for the edition of the Vernimmen, which is now available in bookshops and from the www.

Why european firms make IPOs?

Most frequently, results show that these companies over-perform in the very short term, and under-perform over a period of five years following the initial public offering IPO. On the other hand, very little has been published on the consequences of IPOs on other companies in the sector.

This is why they decided to look at the performance stock market and operational of companies that are already listed when there is a major IPO in their sector. On the basis of a sample of IPOs announced between and corporwte completed and 37 cancelled 3 financs, the study provides an empirical response to two questions. Hsu et al show that the shares of a company react negatively to a major IPO in their sector. On the day of the announcement of the IPO, the market under-performs by 0.

Successful completion of the operation results in an additional loss of 0. Moreover, the operating performance of these companies declines in the years following the IPO, which justifies the negative reaction of the markets. These companies are negatively impacted by the greater competitiveness of recently IPOed companies. Three additional explanations are cotporate. What features will increase or reduce a companies sensitivity to an IPO in its sector? Results are consistent with the explanations set out above.


Company performances suffer less of a negative impact as a result of an IPO in the same sector if:. The survival probability of companies when a competitor is IPOed is also greater when these three conditions are met. Finally, by showing that companies are negatively impacted by the IPO of a competitor, the article suggests that a company that carries out an IPO, will improve its competitiveness. They also focussed on non-financial sectors. We can assume that the announcement of the cancellation of a planned IPO makes another IPO in the same sector less likely in the near future.

To buy an asset or a company? When this question comes up, even though this is far from being systematically the case as the seller rarely gives the buyer a choice, here are a few factors to bear in mind:. When the seller sells the assets of a company, he does not directly recover the procedds from the sale.

This income goes to the company since it is the owner of the assets. This situation may suit the seller if he intends to convert the company into a holding company and to reinvest the income from the sale in new activities.

If, however, the seller needs cash, for example to pay off personal debts, he would naturally prefer to get the cash directly and will thus sell the company. In the vast majority of cases, assets sold directly fetch a higher price than their book value which means that the buyer can depreciate them on the basis of their market value and accordingly benefit from a lower tax rate as depreciation and amortisation will be higher.

This is not possible when a company is bought, unless a revaluation of assets is carried out, which is only done when the company has large tax loss carryforwards that it is unlikely to be able to use. Depending on the country, the purchase of assets or shares is subject to stamp duty, which has to be factored into calculations.

When a company is bought, all of its assets and all of its declared liabilities are acquired at the same time, unless a special agreement is reached with the seller.

More specifically, without knowing it, the buyer acquires any latent liabilities that have not yet come to light. The buyer does, of course, usually get a guarantee from the seller, but not always, and the seller will have to be solvent when the guarantee is called on. Sometimes a decision will be made to buy the assets or the company in an attempt to avoid having to seek administrative or regulatory authorisation, to get around a right of pre-emption or an approval right 2.

Beware, however, of abusing any rights, as the regulator is rarely the village idiot!