Description
Book SynopsisThis book provides innovative solutions to fundamental problems in finance, such as the valuation of bond and equity, the pricing of debt, equity and total asset, the determination of optimal capital structure, etc., which are unsolved or poor-solved so far.
The solutions in this book all have the following features:
Based on essential assumptions in line with reality, the final solutions are analytical solutions with closed-form models, the forms and variables of the models are determined by strict and objective logic processes rather than chosen or presumed subjectively, such as the new growth model for stock valuation, the new CAPM accounting for total risk rather than only systematic risk, the real solution to optimal capital structure based on the trade-off between tax shield and bankruptcy cost. In addition, these basic solutions or models are adjusted easily to various application scenarios.
Table of ContentsPart I Asset Valuation
Chapter 1 Finance and its Fundamental Problems
Chapter 2 Discounting and Bond Valuation
Chapter 3 Stock and Equity Valuation: Where Discounting Does Not Work
Appendix IA: Is Practice Ahead of Theory? ——Based on the Case of Finance
Appendix IB: On the Basic Classification of Social Science
Part II Asset Pricing
Chapter 4 Option Pricing and Valuation of Contingent Cash Flow
Chapter 5 Certainty Equivalent, Risk Premium and Asset Pricing
Chapter 6 Debt/Loan Risk, Bankruptcy Cost and Debt/Loan Pricing
Chapter 7 Capital Asset Pricing: An Easy and Unified Solution
Part III Leverage and Risks
Chapter 8 Tax Shield, Bankruptcy Cost and Optimal Capital Structure
Chapter 9 Some Extensive Discussions of ZZ Leverage Model
Chapter 10 Bankruptcy Probability and Firm Life Expectancy
