This book, now in its second edition, fully covers the framework within which corporate finance deals are done in Canada. The discussion of the law relating to financing practices, financial instruments and financial institutions are integrated with a consideration of some of the topics that comprise modern finance theory.
New financial technologies have introduced complex financial system risks and legal and regulatory challenges. The international financial crisis that began in the U.S. subprime mortgage market in 2007, for example, is importantly linked to at least two of the innovative financial techniques discussed in this book: securitization and credit default swaps. Other topics include:
- The “Pooling” vs. “Purchase” accounting controversy
- Economic theory such as Efficient Market Theory, the Modigliani-Miller Theorem and the Capital Asset Pricing Model (CAPM)
- Simple bond and share valuation, NPV (Net Present Value) and IRR (Internal Rate of Return)
- The role of Canadian financial institutions, as well as a discussion of the forces underlying global consolidation in the financial industry
- The role of securities exchanges including Canadian stock exchange restructuring