Master Corporate Finance: 143 Flashcards from NPV to the Pecking Order Theory

The deck is filed as "Corporate & Personal Finance", but read the 143 cards and the picture is sharper than that: this is a corporate finance course. Budgeting, capital structure, dividend policy, working capital, valuation, M&A — there is no personal budgeting or retirement planning in it at all. That makes LF2274 on Flip It a genuinely useful revision tool for a corporate finance exam, an FP&A interview or a CFA Level 1 refresh, as long as you know what you are picking up.

The six territories the deck maps

• Investment appraisal: NPV, IRR, WACC, hurdle rate, discounted cash flow, discounted payback period, ROI, EVA, MVA, adjusted present value, residual income valuation.
• Handling uncertainty: sensitivity analysis, scenario analysis, the First Chicago Method, Monte Carlo simulation, decision tree analysis, real options valuation, the binomial options model, triangular and beta distributions, certainty equivalent, expected value.
• Capital structure: Modigliani-Miller, Trade-Off Theory, Pecking Order Theory, capital structure substitution, market timing hypothesis, tax benefits and bankruptcy costs of debt, cost of equity, cost of debt, CAPM, APT.
• Dividend policy: the Lintner model, the Walter model, residual dividend policy, the clientele effect, dividend signalling, share buybacks, growth versus value stocks.
• Working capital: cash conversion cycle, net operating cycle, current assets and liabilities, inventory management, debtors management, credit scoring, factoring, overdrafts, ROC, ROE.
• Instruments and transactions: callable and zero-coupon bonds, sinking funds, preferred stock, convertibles, hybrid securities, securitisation, IPOs and seasoned equity offerings, underwriting, due diligence, enterprise value, divestitures.

Eight cards that carry the most weight

Study the families, not the cards

The named theories are where people lose marks, because the deck holds five dividend models and five capital structure models and they blur together under time pressure. Drill them as pairs in tension, not as isolated definitions: Trade-Off Theory says there is an optimal debt level (tax shield versus bankruptcy cost), Pecking Order says there is no target at all, only a preference ordering. Modigliani-Miller is the frictionless baseline both of them deviate from. Lintner is about smoothing payouts, Walter about whether to pay at all (only if ROE < Ke). Write those four contrasts on one sheet and the twenty-odd surrounding cards fall into place.

Second tip: every appraisal card ultimately reduces to a discount rate. WACC, hurdle rate, cost of equity, cost of debt, CAPM and APT are six cards answering one question — what return does this money have to beat? Group them and review them in a single block rather than wherever the shuffle drops them.

One historical card is worth keeping for interviews: the world's first IPO was the Dutch East India Company (VOC) in 1602.

Open deck LF2274 in your library at flip-it.app. For the market-side counterpart — bonds, trade instruments and the Basel accords — see How to Learn Banking, Trade & Investments.