Intermediate Financial Management (with Thomson One)

State laws, to protect management, 376n
Statement of cash flows, 215, 222–224
Statement of corporate objectives, 289
Statement of retained earnings, 215,
218–219
Stepped-up exercise prices, 696
Sticky dividends, 601
Stock(s)
actual prices and returns, 175–178
changes in trading of, 179
constant growth, 160–164
cost of selling, 603
debt and, 510
international, 175–177
with nonconstant growth rate, 165–168
option leverage and, 193–194
preferred, 178–179, 686, 687–693
price manipulation and, 630n
rate of return on, 35
safety, 725, 726, 818–819
volatility of, 53
zero growth, 164
Stock analysis, ratio analysis used by, 271
Stock dividends, 605–607
Stockholders, 358. See also
Shareholder(s)
agency costs and, 11–12
clientele effect and, 589
vs. creditors, 15–16
vs. managers, 10–15
after mergers, 901
Stockholder value, as management goal,
4–10
Stock market(s)
international, 966
reporting on, 177–178
types of transactions, 156–157
Stock market equilibrium, 170–175
Stock market indices, global, 970
Stock offering, unsyndicated, 624–625
Stock options, 379–381. See also European
option; Option(s)
in compensation plans, 209
executive, 9, 12
Stock price
capital structure and, 535–540
as long- or short-term events, 163
splits, dividends, and, 606–607
Stock price maximization, 5–6
Stock repurchases, 597–600
Stock return, for General Electric, 57
Stock return variance. See Variance
Stock splits, 605, 606–607
Stock valuation
by free cash flow approach, 169
stocks with nonconstant growth rate,
165–168
Stock valuation models, 151, 157–160
constant growth model (Gordon
model), 160
expected dividends as basis for stock
values, 159–160
terms used in, 157–159
Straight-line method, 442–443
Strategic alliances, 930–931
Strategic options, 468
Strategic planning, 287–289
by Bell Electronics, 367–368
Stretching accounts payable, 741
Strike (exercise) price, 189
value of call option and, 191
Strong form, 11n
of EMH, 174
Structured notes, 846–847
Subordinated debentures, 135
Subordination provisions, in bond ratings,
136–137
Summary-of-years’ digits, 443
Sunk cost, 439–440
Sun Trust, 902
Supernormal (nonconstant) growth, 166
Supernormal growth stock, finding value
of, 168
Super poison put, 118
Supply chain management (SCM), 735
Swap, 843–846, 856–857
cash flows under, 844
currency, 845–846
Symmetric information, 524
Synchronization of cash flows, 731–732
Syndicated stock offering, 624–625
Synergistic benefits, 916
Synergy
mergers and, 896–898
sources of, 897
Synthetic leases, 662–663
Systematic risk, 49n
Takeover bid, taxes and, 919–923
Takeovers
friendly, 902–903
hostile, 14, 902–903
Tape watchers, 174
Target capital structure, 319–320, 508
Target cash balance, 728–731, 802–807
Target company, 902
Target distribution ratio, 585
Targeted share repurchases, 376
Target payout ratio, 585
Target stock, 155
Tariffs, 975
Taxable offer, 919
Taxation. See also Federal income tax system
annual flotation and, 643–644
on corporate income, 235–239
debt and, 511
of dividends, 240
of holding companies, 935
mergers and, 898
Miller on, 521–522, 560–563, 564–565
in MM models, 520–521, 550, 551–552,
555–559, 564–565
multinational inventory management
and, 976
on overseas income, 238–239
personal, 239–240, 560–563
preferred stock and, 690–691
progressive, 239
risk management and, 836
of small businesses, 239
takeover bid structure and, 919–923
Tax Code, improper accumulation
provision in, 237–238
Tax depreciation life, 443–446
Tax effects, 897
on cash flows, 442–446
Tax laws
leasing and, 663–664, 675–677
of 2003, 240
Tax preference theory
capital gains and, 586
dividends vs. capital gains and, 586, 587
Tax rates, weighted average cost of
capital and, 336
Tax shields, 914
mergers and, 917–918
in MM model, 565–566
Technology
cash balance information and, 802–803
for multinationals, 946
risk analysis and, 460
TECO Energy, 841
Telecom Italia, 902
Telecommunications, cash balance information
and, 802–803
Telecommunications industry, 841n
Temporary NOWC, 742
Tender offer, 902
Terminal (horizon) date, 167
Terminal value, 167, 363
Terminal year cash flow, 447
Termination opportunities, post-audit
for, 417
Terms of credit, 739
Terrorism, insurance against, 832–833
Three-factor model, Fama-French,
103–105
TIAA–CREF (pension fund), 378
Times-interest-earned (TIE) ratio, 136,
258, 265
Time Warner, 901
merger with AOL, 897–898
Timing, of cash flows, 442
Timing option. See Investment timing
options
Titles, of SOX, 17–18
TOPrS (Trust Originated Preferred Stock),
691
Total assets turnover ratio, 256–257, 265
Total debt ratio, 257
Total net operating capital, 224–227
Total quality management (TQM), 808
Tracking stock, 155
Trade
in foreign exchange, 957–958
in futures, 853
Trade credit, 739–742
Trade deficit, 953
Trade discounts, 727
Trademarks, 218
Trade-off theory, 522–523
of capital structure, 573–575
Trading, first day of, 626–627
Transactions, cash for, 726
Transactions balances, 726
Transfer price, 969
Transparency, 16–19
Transparency International (TI), risk
exposure and, 967, 968
Treasury, indexed bonds from, 20
Treasury bills (T-bills), 21, 114n
risk-return trade-off and, 42
short-term, 24
Treasury bonds, 114
Treasury stock, 597n
Trend analysis, 264
Treynor’s reward-to-volatility ratio, 93
Trustee, 134
for bankruptcy, 141, 872
for informal liquidation, 871
Trusts, antitrust issues, 927
Turner Broadcasting, junk bonds for
financing, 140
Subject Index • 1039