Corporate finance books typically focus too much on computations or theories without providing an intuitive understanding of the basic principles. This book offers a unique approach helping corporate finance professionals develop the critical judgments necessary to apply financial tools in real-world decision-making situations.

Part 1: Introduction. Chapter 1: The Financial Manager and the Firm. 1.1 The Role of the Financial Manager. 1.2 Forms of Business Organization. 1.3 Managing the Financial Function. 1.4 The Goal of the Firm. 1.5 Agency Conflicts: Separation of Ownership and Control. 1.6 The Importance of Ethics in Business. Summary of Learning Objectives / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Part 2: Foundations. Chapter 2:The Financial Environment and the Level of Interest Rates. 2.1 The Financial System. 2.2 Direct Financing. 2.3 Types of Financial Markets. 2.4 The Stock Market. 2.5 Financial Institutions and Indirect Financing. 2.6 The Determinants of Interest Rate Levels. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 3: Financial Statements, Cash Flows, and Taxes. 3.1 Financial Statements and Accounting Principles. 3.2 The Balance Sheet. 3.3 Market Value versus Book Value. 3.4 The Income Statement and the Statement of Retained Earnings. 3.5 Cash Flows. 3.6 Tying the Financial Statements Together. 3.7 Federal Income Tax. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 4: Analyzing Financial Statements. 4.1 Background for Financial Statement Analysis. 4.2 Common-Size Financial Statements. 4.3 Financial Statement Analysis. 4.4 The DuPont System: A Diagnostic Tool. 4.5 Selecting a Benchmark. 4.6 Using Financial Ratios. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Ethics Case: A Sad Tale: The Demise of Arthur Andersen. Part 3: Valuation of Future Cash Flows and Risk. Chapter 5: The Time Value of Money. 5.1 The Time Value of Money. 5.2 Future Value and Compounding. 5.3 Present Value and Discounting. 5.4 Additional Concepts and Applications. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 6: Discounted Cash Flows and Valuation. 6.1 Multiple Cash Flows. 6.2 Level Cash Flows: Annuities and Perpetuities. 6.3 Cash Flows That Grow at a Constant Rate. 6.4 The Effective Annual Interest Rate. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Appendix: Deriving the Formula for the Present Value of an Ordinary Annuity. Problem. Ethics Case: Buy It on Credit and Be True to Your School. Chapter 7: Risk and Return. 7.1 Risk and Return. Building Intuition: More Risk Means a Higher Expected Return. 7.2 Quantitative Measures of Return. 7.3 The Variance and Standard Deviation as Measures of Risk. 7.4 Risk and Diversification. 7.5 Systematic Risk. 7.6 Compensation for Bearing Systematic Risk. 7.7 The Capital Asset Pricing Model. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 8: Bond Valuation and the Structure of Interest Rates. 8.1 Capital Market Efficiency. Efficient Market Hypotheses. 8.2 Corporate Bonds. 8.3 Bond Valuation. 8.4 Bond Yields. 8.5 Interest Rate Risk. 8.6 The Structure of Interest Rates. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 9: Stock Valuation. 9.1 The Market for Stocks. 9.2 Common Stock Valuation. 9.3 Stock Valuation: Some Simplifying Assumptions. 9.4 Valuing Preferred Stock. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Ethics Case: Insider Trading: Have I Got a Stock Tip for You! Part 4: Capital Budgeting Decisions. Chapter 10: The Fundamentals of Capital Budgeting. 10.1 An Introduction to Capital Budgeting. 10.2 Net Present Value. 10.3 The Payback Period. 10.4 The Accounting Rate of Return. 10.5 Internal Rate of Return. 10.6 Capital Budgeting in Practice. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 11: Cash Flows and Capital Budgeting. 11.1 Calculating Project Cash Flows. 11.2 Estimating Cash Flows in Practice. 11.3 Forecasting Free Cash Flows. 11.4 Special Cases (Optional). Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Ethics Case: Doing the Right Thing: The Schwan Food Company. Chapter 12: Evaluating Project Economics and Capital Rationing. 12.1 Variable Costs, Fixed Costs, and Project Risk. 12.2 Calculating Operating Leverage. 12.3 Break-Even Analysis. 12.4 Risk Analysis. 12.5 Investment Decisions with Capital Rationing. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 13: The Cost of Capital. 13.1 The Firm's Overall Cost of Capital. 13.2 The Cost of Debt. 13.3 The Cost of Equity. 13.4 Using the WACC in Practice. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Part 5: Financing Decisions. Chapter 14: Working Capital Management. 14.1 Working Capital Basics. 14.2 The Operating and Cash Conversion Cycles. 14.3 Working Capital Investment Strategies. 14.4 Accounts Receivable. 14.5 Inventory Management. 14.6 Cash Management and Budgeting. 14.7 Financing Working Capital. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 15: How Firms Raise Capital. 15.1 Bootstrapping. 15.2 Venture Capital. 15.3 Initial Public Offering. 15.4 IPO Pricing and Cost. 15.5 General Cash Offer by a Public Company. 15.6 Private Markets and Bank Loans. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Ethics Case: Profiting from Death: "Janitor's Insurance". Chapter 16: Capital Structure Policy. 16.1 Capital Structure and Firm Value. 16.2 The Benefits and Costs of Using Debt. 16.3 Two Theories of Capital Structure. 16.4 Practical Considerations in Choosing a Capital Structure. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Chapter 17: Dividends and Dividend Policy. 17.1 Dividends. 17.2 Stock Repurchases. 17.3 Dividend Policy and Firm Value. 17.4 Stock Dividends and Stock Splits. 17.5 Setting a Dividend Policy. Summary of Learning Objectives / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Part 6: Business Formation, Valuation, and Financial Planning. Chapter 18: Business Formation, Growth, and Valuation. 18.1 Starting a Business. 18.2 The Role of the Business Plan. 18.3 Valuing a Business. 18.4 Important Issues in Valuation. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Ethics Case: The Subprime Mortgage Market Meltdown: How Did It Happen? Chapter 19: Financial Planning and Forecasting. 19.1 Financial Planning. 19.2 Financial Planning Models. 19.3 A Better Financial Planning Model. 19.4 Beyond the Basic Planning Models. 19.5 Managing and Financing Growth. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Part 7: Valuation and International Decisions. Chapter 20: Options and Corporate Finance. 20.1 Financial Options. 20.2 Option Valuation. 20.3 Real Options. 20.4 Agency Costs. 20.5 Options and Risk Management. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems. Ethics Case: Compensation-How Much Is Enough? Chapter 21: International Financial Management. 21.1 Introduction to International Finance Management. 21.2 Foreign Exchange Markets. 21.3 International Capital Budgeting. 21.4 Global Money and Capital Markets. 21.5 International Banking. Summary of Learning Objectives / Summary of Key Equations / Self-Study Problems / Solutions to Self-Study Problems / Critical Thinking Questions / Questions and Problems / Sample Test Problems.