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Fundamentals of Corporate Finance

Book Description

Essentials of Corporate Finance with WileyPLUS offers a focused choice for instructors teaching the fundamentals of value creation by offering a balance of intuitive conceptual understanding, problem solving and analysis, and decision making skills.

Students who understand the intuition underlying the basic concepts of finance are better able to develop the critical judgments necessary to apply financial tools in real decision-making situations. Authors Bob Parrino, Tom Bates, and David Kidwell present a concise treatment of foundational topics while maintaining the same effective Learning by Doing pedagogy found in the successful Fundamentals edition. With WileyPLUS, students come to class prepared after working through Orion's adaptive learning module, develop problem solving skills with instant feedback on their work, and are guided through examples with Animated Learning by Doing.

Essentials of Corporate Finance includes every resource found in Fundamentals, giving instructors and students all the resources they need to be successful. This briefer edition will help your students develop a clear understanding of the material as well as how to apply Corporate Finance to their future studies and career paths.

WileyPLUS sold separately from text.

Table of Contents

  1. Cover Page
  2. Title Page
  3. Copyright
  4. Dedication
  5. About the Authors
  6. Preface
  7. Organization and Coverage
  8. Proven Pedagogical Framework
  9. Instructor and Student Resources
  10. Brief Contents
  11. Contents
  12. Chapter 1: The Financial Manager and the Firm
    1. 1.1 THE ROLE OF THE FINANCIAL MANAGER
    2. 1.2 FORMS OF BUSINESS ORGANIZATION
    3. 1.3 MANAGING THE FINANCIAL FUNCTION
    4. 1.4 THE GOAL OF THE FIRM
    5. 1.5 AGENCY CONFLICTS: SEPARATION OF OWNERSHIP AND CONTROL
    6. 1.6 THE IMPORTANCE OF ETHICS IN BUSINESS
    7. SUMMARY OF Learning Objectives
    8. Self-Study Problems
    9. Solutions to Self-Study Problems
    10. Critical Thinking Questions
    11. Questions and Problems
    12. Sample Test Problems
  13. Chapter 2: The Financial System and the Level of Interest Rates
    1. 2.1 THE FINANCIAL SYSTEM
    2. 2.2 DIRECT FINANCING
    3. 2.3 TYPES OF FINANCIAL MARKETS
    4. 2.4 MARKET EFFICIENCY
    5. 2.5 FINANCIAL INSTITUTIONS AND INDIRECT FINANCING
    6. 2.6 THE DETERMINANTS OF INTEREST RATE LEVELS
    7. SUMMARY OF Learning Objectives
    8. SUMMARY OF Key Equations
    9. Self-Study Problems
    10. Solutions to Self-Study Problems
    11. Critical Thinking Questions
    12. Questions and Problems
    13. Sample Test Problems
  14. Chapter 3: Financial Statements, Cash Flows, and Taxes
    1. 3.1 FINANCIAL STATEMENTS AND ACCOUNTING PRINCIPLES
    2. 3.2 THE BALANCE SHEET
    3. 3.3 MARKET VALUE VERSUS BOOK VALUE
    4. 3.4 THE INCOME STATEMENT AND THE STATEMENT OF RETAINED EARNINGS
    5. 3.5 THE STATEMENT OF CASH FLOWS
    6. 3.6 TYING TOGETHER THE FINANCIAL STATEMENTS
    7. 3.7 CASH FLOWS TO INVESTORS
    8. 3.8 FEDERAL INCOME TAX
    9. SUMMARY OF Learning Objectives
    10. SUMMARY OF Key Equations
    11. Self-Study Problems
    12. Solutions to Self-Study Problems
    13. Critical Thinking Questions
    14. Questions and Problems
    15. Sample Test Problems
  15. Chapter 4: Analyzing Financial Statements
    1. 4.1 BACKGROUND FOR FINANCIAL STATEMENT ANALYSIS
    2. 4.2 COMMON-SIZE FINANCIAL STATEMENTS
    3. 4.3 FINANCIAL RATIOS AND FIRM PERFORMANCE
    4. 4.4 THE DUPONT SYSTEM: A DIAGNOSTIC TOOL
    5. 4.5 SELECTING A BENCHMARK
    6. 4.6 USING FINANCIAL RATIOS
    7. SUMMARY OF Learning Objectives
    8. SUMMARY OF Key Equations
    9. Self-Study Problems
    10. Solutions to Self-Study Problems
    11. Critical Thinking Questions
    12. Questions and Problems
    13. Sample Test Problems
    14. ETHICS CASE
  16. Chapter 5: The Time Value of Money, Discounted Cash Flows, and Valuation
    1. 5.1 THE TIME VALUE OF MONEY
    2. 5.2 FUTURE VALUE AND COMPOUNDING
    3. 5.3 PRESENT VALUE AND DISCOUNTING
    4. 5.4 MULTIPLE CASH FLOWS
    5. 5.5 LEVEL CASH FLOWS: ANNUITIES AND PERPETUITIES
    6. 5.6 CASH FLOWS THAT GROW AT A CONSTANT RATE
    7. 5.7 THE EFFECTIVE ANNUAL INTEREST RATE
    8. SUMMARY OF Learning Objectives
    9. SUMMARY OF Key Equations
    10. Self-Study Problems
    11. Solutions to Self-Study Problems
    12. Critical Thinking Questions
    13. Questions and Problems
    14. Sample Test Problems
    15. ETHICS CASE
  17. Chapter 6: Risk and Return
    1. 6.1 RISK AND RETURN
    2. 6.2 QUANTITATIVE MEASURES OF RETURN
    3. 6.3 VARIANCE AND STANDARD DEVIATION AS MEASURES OF RISK
    4. 6.4 RISK AND DIVERSIFICATION
    5. 6.5 SYSTEMATIC RISK
    6. 6.6 COMPENSATION FOR BEARING SYSTEMATIC RISK
    7. 6.7 THE CAPITAL ASSET PRICING MODEL
    8. SUMMARY OF Learning Objectives
    9. SUMMARY OF Key Equations
    10. Self-Study Problems
    11. Solutions to Self-Study Problems
    12. Critical Thinking Questions
    13. Questions and Problems
    14. Sample Test Problems
  18. Chapter 7: Bond Valuation and the Structure of Interest Rates
    1. 7.1 CORPORATE BONDS
    2. 7.2 BOND VALUATION
    3. 7.3 BOND YIELDS
    4. 7.4 INTEREST RATE RISK
    5. 7.5 THE STRUCTURE OF INTEREST RATES
    6. SUMMARY OF Learning Objectives
    7. SUMMARY OF Key Equations
    8. Self-Study Problems
    9. Solutions to Self-Study Problems
    10. Critical Thinking Questions
    11. Questions and Problems
    12. Sample Test Problems
    13. ETHICS CASE
  19. Chapter 8: Stock Valuation
    1. 8.1 THE MARKET FOR STOCKS
    2. 8.2 COMMON STOCK VALUATION
    3. 8.3 STOCK VALUATION: SOME SIMPLIFYING ASSUMPTIONS
    4. 8.4 VALUING PREFERRED STOCK
    5. SUMMARY OF Learning Objectives
    6. SUMMARY OF Key Equations
    7. Self-Study Problems
    8. Solutions to Self-Study Problems
    9. Critical Thinking Questions
    10. Questions and Problems
    11. Sample Test Problems
    12. ETHICS CASE
  20. Chapter 9: The Fundamentals of Capital Budgeting
    1. 9.1 AN INTRODUCTION TO CAPITAL BUDGETING
    2. 9.2 NET PRESENT VALUE
    3. 9.3 THE PAYBACK PERIOD
    4. 9.4 THE ACCOUNTING RATE OF RETURN
    5. 9.5 INTERNAL RATE OF RETURN
    6. 9.6 INVESTMENT DECISIONS WITH CAPITAL RATIONING
    7. 9.7 CAPITAL BUDGETING IN PRACTICE
    8. SUMMARY OF Learning Objectives
    9. SUMMARY OF Key Equations
    10. Self-Study Problems
    11. Solutions to Self-Study Problems
    12. Critical Thinking Questions
    13. Questions and Problems
    14. Sample Test Problems
  21. Chapter 10: Cash Flows and Capital Budgeting
    1. 10.1 CALCULATING PROJECT CASH FLOWS
    2. 10.2 ESTIMATING CASH FLOWS IN PRACTICE
    3. 10.3 FORECASTING FREE CASH FLOWS
    4. 10.4 EVALUATING PROJECTS WITH DIFFERENT LIVES
    5. SUMMARY OF Learning Objectives
    6. SUMMARY OF Key Equations
    7. Self-Study Problems
    8. Solutions to Self-Study Problems
    9. Critical Thinking Questions
    10. Questions and Problems
    11. Sample Test Problems
    12. ETHICS CASE
  22. Chapter 11: The Cost of Capital
    1. 11.1 THE FIRM'S OVERALL COST OF CAPITAL
    2. 11.2 THE COST OF DEBT
    3. 11.3 THE COST OF EQUITY
    4. 11.4 USING THE WACC IN PRACTICE
    5. SUMMARY OF Learning Objectives
    6. SUMMARY OF Key Equations
    7. Self-Study Problems
    8. Solutions to Self-Study Problems
    9. Critical Thinking Questions
    10. Questions and Problems
    11. Sample Test Problems
  23. Chapter 12: Working Capital Management
    1. 12.1 WORKING CAPITAL BASICS
    2. 12.2 THE OPERATING AND CASH CONVERSION CYCLES
    3. 12.3 WORKING CAPITAL MANAGEMENT STRATEGIES
    4. 12.4 ACCOUNTS RECEIVABLE
    5. 12.5 INVENTORY MANAGEMENT
    6. 12.6 CASH MANAGEMENT AND BUDGETING
    7. 12.7 FINANCING WORKING CAPITAL
    8. SUMMARY OF Learning Objectives
    9. SUMMARY OF Key Equations
    10. Self-Study Problems
    11. Solutions to Self-Study Problems
    12. Critical Thinking Questions
    13. Questions and Problems
    14. Sample Test Problems
  24. Chapter 13: How Firms Raise Capital
    1. 13.1 BOOTSTRAPPING
    2. 13.2 VENTURE CAPITAL
    3. 13.3 INITIAL PUBLIC OFFERING
    4. 13.4 IPO PRICING AND COST
    5. 13.5 GENERAL CASH OFFER BY A PUBLIC COMPANY
    6. 13.6 PRIVATE MARKETS AND BANK LOANS
    7. SUMMARY OF Learning Objectives
    8. SUMMARY OF Key Equations
    9. Self-Study Problems
    10. Solutions to Self-Study Problems
    11. Critical Thinking Questions
    12. Questions and Problems
    13. Sample Test Problems
    14. ETHICS CASE
  25. Chapter 14: Capital Structure Policy
    1. 14.1 CAPITAL STRUCTURE AND FIRM VALUE
    2. 14.2 THE BENEFITS AND COSTS OF USING DEBT
    3. 14.3 TWO THEORIES OF CAPITAL STRUCTURE
    4. 14.4 PRACTICAL CONSIDERATIONS IN CHOOSING A CAPITAL STRUCTURE
    5. SUMMARY OF Learning Objectives
    6. SUMMARY OF Key Equations
    7. Self-Study Problems
    8. Solutions to Self-Study Problems
    9. Critical Thinking Questions
    10. Questions and Problems
    11. Sample Test Problems
    12. Appendix: Leasing
    13. SUMMARY OF Learning Objective
    14. Critical Thinking Question
    15. Questions and Problems
  26. Chapter 15: Dividends, Stock Repurchases, and Payout Policy
    1. 15.1 DIVIDENDS
    2. 15.2 STOCK REPURCHASES
    3. 15.3 DIVIDENDS AND FIRM VALUE
    4. 15.4 STOCK DIVIDENDS AND STOCK SPLITS
    5. 15.5 SETTING A DIVIDEND PAYOUT
    6. SUMMARY OF Learning Objectives
    7. Self-Study Problems
    8. Solutions to Self-Study Problems
    9. Critical Thinking Questions
    10. Questions and Problems
    11. Sample Test Problems
  27. Chapter 16: Financial Planning and Managing Growth
    1. 16.1 FINANCIAL PLANNING
    2. 16.2 FINANCIAL PLANNING MODELS
    3. 16.3 A BETTER FINANCIAL PLANNING MODEL
    4. 16.4 BEYOND THE BASIC PLANNING MODELS
    5. 16.5 MANAGING AND FINANCING GROWTH
    6. SUMMARY OF Learning Objectives
    7. SUMMARY OF Key Equations
    8. Self-Study Problems
    9. Solutions to Self-Study Problems
    10. Critical Thinking Questions
    11. Questions and Problems
    12. Sample Test Problems
  28. Chapter 17: International Financial Management
    1. 17.1 INTRODUCTION TO INTERNATIONAL FINANCIAL MANAGEMENT
    2. 17.2 FOREIGN EXCHANGE MARKETS
    3. 17.3 INTERNATIONAL CAPITAL BUDGETING
    4. 17.4 GLOBAL MONEY AND CAPITAL MARKETS
    5. 17.5 INTERNATIONAL BANKING
    6. SUMMARY OF Learning Objectives
    7. SUMMARY OF Key Equations
    8. Self-Study Problems
    9. Solutions to Self-Study Problems
    10. Critical Thinking Questions
    11. Questions and Problems
    12. Sample Test Problems
  29. Appendix A: Future Value and Present Value Tables
  30. Appendix B: Solutions to Selected Questions and Problems
  31. Glossary
  32. Subject Index
  33. Company Index