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The objective of Corporate Financial Management, 4th Edition is to introduce students to those principles essential to the understanding of financial problems and the policies that financial managers use to contend with these problems. To achieve this objective, the text stresses practical application in a user-friendly format. This textbook is suitable for both undergraduate- and graduate-level core courses in finance: financial management and corporate finance. We have written the text in a clear, concise, and practical manner.
Students will be exposed to all of the key tools and techniques of financial management and corporate finance without a complex treatment of theoretical financial concepts. Students find different ways to master a subject, but we believe that the case-study approach is the most effective. Although this text is not a casebook, we have included 12 short cases designed to illustrate a series of real-life, current, and decision-oriented financial problems. These cases should be particularly useful for those instructors who wish to use this text for the two-semester sequence on financial management and corporate finance. The case-study approach allows instructors to use a "hands-on" orientation. They can use these cases for student presentations, homework assignments, or classroom discussions. These cases should enable students to strengthen their practical understanding of financial concepts and techniques. Without the added expense of a separate casebook, students can apply what they have learned in practical settings. Moreover, internet exercises at the end of each case has been added to explain how the Internet can be used to access financial data and obtain information on case concepts. It is important to remember that some of the internet exercise instructions may not apply because their website and their features change frequently.
The text focuses on investment and financing decisions, with an emphasis on providing the student with a real-world, practical understanding of concepts. Throughout the fifth edition of Corporate Financial Management, we have incorporated numerous examples to illustrate problem-solving, especially in present value analysis. The text illustrates problem-solving of all relevant concepts mathematically with equations and by financial calculator, using the Texas Instruments BA II Plus. Step-by-step financial calculator instructions are provided for all relevant problems.
The text's structure was carefully designed to ensure a smooth transition from accounting to financial management. A number of the text's earlier chapters include a thorough review of accounting principles, finance terminology, and financial statements. A variety of financial problems are examined as they relate to the financial statements and their impact on return—risk and stock price. We have used many numerical examples throughout the text to clarify discussions of financial concepts and techniques. In addition, a generous number of end-of-chapter problems support text discussions by emphasizing the application of theory. Most chapters have numerical examples within the text and end-of-chapter problems. Answers to end-of-chapter problems are found at the end of the text. Students may refer to these answers to check computation results for accuracy. All end-of-chapter problems are tied or keyed to the numerical examples presented in each chapter. We have highlighted key terms in bold type. Students may test their comprehension and retention by using the key terms provided at the end of each chapter. Another friendly feature of text is a quick reference glossary with 300 terms.
Instructors who want students to possess practical, job-oriented skills in finance will find that Corporate Financial Management speaks to their needs. Corporate recruiters often criticize business schools for turning out graduates who cannot contribute immediately. At the core of this criticism is the belief that while students are educated in various theories, little emphasis is placed on developing practical skills. For that reason, we were especially careful to ensure that such criticisms would not apply to those who have adopted a book that aims at developing students' skills in finance. In fact, we expect that many students will keep this book as a useful reference after they complete their course.
This text has seven parts. Part 1 (Chapters 1 and 2) discusses the primary goal of a firm an the operating environment of financial management. Part 2 (Chapters 3 through 5) explains key concepts and tools of financial planning and control. Part 3 (Chapters 6 though 8) covers management of working capital. Part 4 (Chapters 9 through 14) covers the time value of money and long-term investment decisions. Part 5 (Chapters 15 through 19) analyzes various sources of long-term financing. Part 6 (Chapters 20 and 21) examines topics of special interest, such as mergers and global finance. Part 7 discusses 12 cases in finance.
Part 1 Introduction
— Chapter 1 Goals and Functions of Finance
— Chapter 2 Operating Environment of Financial Management
Part 2 Financial Planning and Control
— Chapter 3 Financial Statement Analysis
— Chapter 4 Leverage and Risk Analysis
— Chapter 5 Financial Planning and Forecasting
Part 3 Working Capital Management
— Chapter 6 An Overview of Working Capital Management
— Chapter 7 Current Asset Management
— Chapter 8 Sources of Short-Term Financing
Part 4 Capital Expenditure Analysis
— Chapter 9 Time Value of Money
— Chapter 10 Valuation
— Chapter 11 Cost of Capital
— Chapter 12 Capital Budgeting under Certainty
— Chapter 13 Other Issues in Capital Budgeting
— Chapter 14 Capital Budgeting under Uncertainty
Part 5 Long Term Financing
— Chapter 15 Investment Bankers and Capital Markets
— Chapter 16 Fixed Income Securities: Bonds and Preferred Stocks
— Chapter 17 Common Stock
— Chapter 18 Dividend Policy and Retained Earnings
— Chapter 19 Term Loans and leases
Part 6 Special Topics in Finance
— Chapter 20 Corporate Growth through Mergers
— Chapter 21 Corporate Growth Through Globalization
Part 7 Case Study Problems in Finance
Also included: Interest Tables, Glossary of Financial Terms, Answers to Selected End-of-Chapter Problems, and Index