Fundamentals of Corporate Finance,

Cover
Title
Copyright
Dedication
Brief Contents
Detailed Contents
About the Authors
Bridging Theory and Practice
Applications That Reflect Real Practice
Teaching Every Student to Think Finance
Practice Finance to Learn Finance
Preface
Part 1: Introduction
	Chapter 1. Corporate Finance and the Financial Manager
		1.1 Why Study Finance?
		1.2 The Four Types of Firms
			Sole Proprietorships
			Partnerships
			Limited Liability Companies
			Corporations
			Tax Implications for Corporate Entities
			Corporate Taxation Around the World
		1.3 The Financial Manager
			Making Investment Decisions
			Global Financial Crisis The Dodd-Frank Act
			Making Financing Decisions
			Managing Short-Term Cash Needs
			The Goal of the Financial Manager
			Shareholder Value Versus Stakeholder Value
		1.4 The Financial Manager’s Place in the Corporation
			The Corporate Management Team
			Ethics and Incentives in Corporations
			Global Financial Crisis The Dodd-Frank Act on Corporate Compensation and Governance
			Citizens United v. Federal Election Commission
		1.5 The Stock Market
			The Largest Stock Markets
			Primary Versus Secondary Markets
			Traditional Trading Venues
			Interview With Frank Hatheway
			New Competition and Market Changes
			Dark Pools
			Listing Standards
			Other Financial Markets
			NYSE, BATS, DJIA, S&P 500: Awash in Acronyms
		1.6 Financial Institutions
			The Financial Cycle
			Types of Financial Institutions
			Role of Financial Institutions
			Summary
			Problems
	Chapter 2. Introduction to Financial Statement Analysis
		2.1 Firms’ Disclosure of Financial Information
			Preparation of Financial Statements
			I nternational Financial Reporting Standards
			Interview With Ruth Porat
			Types of Financial Statements
		2.2 The Balance Sheet
			Assets
			Liabilities
			Stockholders’ Equity
			Market Value Versus Book Value
			Market-to-Book Ratio
			Enterprise Value
		2.3 The Income Statement
			Earnings Calculations
			EBITDA
		2.4 The Statement of Cash Flows
			Operating Activity
			Investment Activity
			Financing Activity
		2.5 Other Financial Statement Information
			Statement of Stockholders’ Equity
			Management Discussion and Analysis
			Notes to the Financial Statements
		2.6 Financial Statement Analysis
			Profitability Ratios
			Liquidity Ratios
			Asset Efficiency
			Working Capital Ratios
			Interest Coverage Ratios
			Leverage Ratios
			Valuation Ratios
			Common Mistake Mismatched Ratios
			Operating Returns
			The DuPont Identity
		2.7 Financial Reporting in Practice
			Enron
			The Sarbanes-Oxley Act
			Dodd-Frank Act
			Global Financial Crisis Bernard Madoff’s Ponzi Scheme
			The Financial Statements: A Useful Starting Point
			Summary
			Critical Thinking
			Problems
			Data Case
Part 2: Interest Rates and Valuing Cash Flows
	Chapter 3. Time Value of Money: An Introduction
		3.1 Cost-Benefit Analysis
			Role of the Financial Manager
			Quantifying Costs and Benefits
		3.2 Market Prices and the Valuation Principle
			The Valuation Principle
			Why There Can Be Only One Competitive Price for a Good
			Your Personal Financial Decisions
		3.3 The Time Value of Money and Interest Rates
			The Time Value of Money
			The Interest Rate: Converting Cash Across Time
			Timelines
		3.4 Valuing Cash Flows at Different Points in Time
			Rule 1: Comparing and Combining Values
			Common Mistake Summing Cash Flows Across Time
			Rule 2: Compounding
			Rule of 72
			Rule 3: Discounting
			Using a Financial Calculator
			Summary
			Critical Thinking
			Problems
	Chapter 4. Time Value of Money: Valuing Cash Flow Streams
		4.1 Valuing a Stream of Cash Flows
			Applying the Rules of Valuing Cash Flows to a Cash Flow Stream
			Using a Financial Calculator: Solving for Present and Future Values of Cash Flow Streams
		4.2 Perpetuities
			Perpetuities
			Historical Examples of Perpetuities
			Common Mistake Discounting One Too Many Times
		4.3 Annuities
			Present Value of an Annuity
			Future Value of an Annuity
		4.4 Growing Cash Flows
			Growing Perpetuity
			Growing Annuity
		4.5 Solving for Variables Other Than Present Value or Future Value
			Solving for the Cash Flows
			Rate of Return
			Solving for the Number of Periods
		4.6 Non-Annual Cash Flows
			The Big Picture
			Summary
			Critical Thinking
			Problems
			Data Case
			Chapter 4 Appendix Using a Financial Calculator
	Chapter 5. Interest Rates
		5.1 Interest Rate Quotes and Adjustments
			The Effective Annual Rate
			Adjusting the Discount Rate to Different Time Periods
			Annual Percentage Rates
			Common Mistake Using the EAR in the Annuity Formula
		5.2 Application: Discount Rates and Loans
			Computing Loan Payments
			Global Financial Crisis Teaser Rates and Subprime Loans
			Computing the Outstanding Loan Balance
		5.3 The Determinants of Interest Rates
			Inflation and Real Versus Nominal Rates
			Investment and Interest Rate Policy
			How Is Inflation Actually Calculated?
			The Yield Curve and Discount Rates
			Interview With Dr. Janet Yellen
			Common Mistake Using the Annuity Formula When Discount Rates Vary
			The Yield Curve and the Economy
		5.4 The Opportunity Cost of Capital
			Interest Rates, Discount Rates, and the Cost of Capital
			Common Mistake States Dig a $3 Trillion Hole by Discounting at the Wrong Rate
			Summary
			Critical Thinking
			Problems
	Chapter 6. Bonds
		6.1 Bond Terminology
		6.2 Zero-Coupon Bonds
			Zero-Coupon Bond Cash Flows
			Yield to Maturity of a Zero-Coupon Bond
			Global Financial Crisis Negative Bond Yields
			Risk-Free Interest Rates
		6.3 Coupon Bonds
			Coupon Bond Cash Flows
			The U.S. Treasury Market
			Yield to Maturity of a Coupon Bond
			Finding Bond Prices on the Web
			Coupon Bond Price Quotes
		6.4 Why Bond Prices Change
			Interest Rate Changes and Bond Prices
			Time and Bond Prices
			Interest Rate Risk and Bond Prices
			Clean and Dirty Prices for Coupon Bonds
			Bond Prices in Practice
		6.5 Corporate Bonds
			Credit Risk
			Are Treasuries Really Default-Free Securities?
			Interview With Lisa Black
			Corporate Bond Yields
			Bond Ratings
			Corporate Yield Curves
			The Credit Crisis and Bond Yields
			Summary
			Critical Thinking
			Problems
			Data Case
			Chapter 6 Appendix A Solving for the Yield to Maturity of a Bond Using a Financial Calculator
			Chapter 6 Appendix B The Yield Curve and the Law of One Price
	Chapter 7. Stock Valuation
		7.1 Stock Basics
			Stock Market Reporting: Stock Quotes
			Common Stock
			Preferred Stock
		7.2 The Mechanics of Stock Trades
		7.3 The Dividend-Discount Model
			A One-Year Investor
			Dividend Yields, Capital Gains, and Total Returns
			A Multiyear Investor
			Dividend-Discount Model Equation
		7.4 Estimating Dividends in the Dividend-Discount Model
			Constant Dividend Growth
			Dividends Versus Investment and Growth
			Changing Growth Rates
			Common Mistake Forgetting to “Grow” This Year’s Dividend
			Value Drivers and the Dividend-Discount Model
		7.5 Limitations of the Dividend-Discount Model
			Uncertain Dividend Forecasts
			Non-Dividend-Paying Stocks
		7.6 Share Repurchases and the Total Payout Model
		7.7 Putting It All Together
			Summary
			Critical Thinking
			Problems
			Part 2 Integrative Case
Part 3: Valuation and the Firm
	Chapter 8. Investment Decision Rules
		8.1 The NPV Decision Rule
			Net Present Value
			The NPV Decision Rule
		8.2 Using the NPV Rule
			Organizing the Cash Flows and Computing the NPV
			The NPV Profile
			Measuring Sensitivity with IRR
			Alternative Rules Versus the NPV Rule
		8.3 Alternative Decision Rules
			Using Excel Computing NPV and IRR
			The Payback Rule
			The Internal Rate of Return Rule
			Common Mistake IRR Versus the IRR Rule
			Modified Internal Rate of Return
			Why Do Rules Other Than the NPV Rule Persist?
		8.4 Choosing Among Projects
			Differences in Scale
			Interview With Dick Grannis
			Timing of the Cash Flows
		8.5 Evaluating Projects with Different Lives
			Important Considerations When Using the Equivalent Annual Annuity
		8.6 Choosing Among Projects When Resources Are Limited
			Evaluating Projects with Different Resource Requirements
		8.7 Putting It All Together
			Summary
			Critical Thinking
			Problems
			Data Case
			Chapter 8 Appendix Creating the NPV Profile Using Excel\'s Data Table Function
	Chapter 9. Fundamentals of Capital Budgeting
		9.1 The Capital Budgeting Process
		9.2 Forecasting Incremental Earnings
			Operating Expenses Versus Capital Expenditures
			Incremental Revenue and Cost Estimates
			Taxes
			Incremental Earnings Forecast
		9.3 Determining Incremental Free Cash Flow
			Converting from Earnings to Free Cash Flow
			Calculating Free Cash Flow Directly
			Calculating the NPV
			Using Excel Capital Budgeting Using a Spreadsheet Program
		9.4 Other Effects on Incremental Free Cash Flows
			Opportunity Costs
			Common Mistake The Opportunity Cost of an Idle Asset
			Project Externalities
			Sunk Costs
			Common Mistake The Sunk Cost Fallacy
			Adjusting Free Cash Flow
			Replacement Decisions
		9.5 Analyzing the Project
			Sensitivity Analysis
			Break-Even Analysis
			Interview With David Holland
			Scenario Analysis
			Using Excel Project Analysis Using Excel
		9.6 Real Options in Capital Budgeting
			Option to Delay
			Option to Expand
			Option to Abandon
			Summary
			Critical Thinking
			Problems
			Data Case
			Chapter 9 Appendix MACRS Depreciation
	Chapter 10. Stock Valuation: A Second Look
		10.1 The Discounted Free Cash Flow Model
			Valuing the Enterprise
			Implementing the Model
			Connection to Capital Budgeting
		10.2 Valuation Based on Comparable Firms
			Valuation Multiples
			Limitations of Multiples
			Comparison with Discounted Cash Flow Methods
		10.3 Stock Valuation Techniques: A Final Word
			Interview With Douglas Kehring
		10.4 Information, Competition, and Stock Prices
			Information in Stock Prices
			Competition and Efficient Markets
			Forms of Market Efficiency
			Lessons for Investors and Corporate Managers
			Nobel Prize The 2013 Prize: An Enigma?
			The Efficient Markets Hypothesis Versus No Arbitrage
		10.5 Individual Biases and Trading
			Excessive Trading and Overconfidence
			Hanging On to Losers and the Disposition Effect
			Investor Attention, Mood, and Experience
			Summary
			Critical Thinking
			Problems
			Data Case
			Part 3 Integrative Case
Part 4: Risk and Return
	Chapter 11. Risk and Return in Capital Markets
		11.1 A First Look at Risk and Return
		11.2 Historical Risks and Returns of Stocks
			Computing Historical Returns
			Average Annual Returns
			Arithmetic Average Returns Versus Compound Annual Returns
			The Variance and Volatility of Returns
			Common Mistake Mistakes When Computing Standard Deviation
			Using Excel Computing the Standard Deviation of Historical Returns
			The Normal Distribution
		11.3 The Historical Tradeoff Between Risk and Return
			The Returns of Large Portfolios
			The Returns of Individual Stocks
		11.4 Common Versus Independent Risk
			Theft Versus Earthquake Insurance: An Example
			Types of Risk
		11.5 Diversification in Stock Portfolios
			Unsystematic Versus Systematic Risk
			Global Financial Crisis Diversification Benefits During Market Crashes
			Diversifiable Risk and the Risk Premium
			The Importance of Systematic Risk
			Common Mistake A Fallacy of Long-Run Diversification
			Summary
			Critical Thinking
			Problems
			Data Case
	Chapter 12. Systematic Risk and the Equity Risk Premium
		12.1 The Expected Return of a Portfolio
			Portfolio Weights
			Portfolio Returns
			Expected Portfolio Return
		12.2 The Volatility of a Portfolio
			Diversifying Risks
			Measuring Stocks’ Co-Movement: Correlation
			Using Excel Calculating the Correlation Between Two Sets of Returns
			Computing a Portfolio’s Variance and Standard Deviation
			The Volatility of a Large Portfolio
			Nobel Prize Harry Markowitz
		12.3 Measuring Systematic Risk
			Role of the Market Portfolio
			Stock Market Indexes as the Market Portfolio
			Market Risk and Beta
			Index Funds
			Common Mistake Mixing Standard Deviation and Beta
			Estimating Beta from Historical Returns
			Using Excel Calculating a Stock’s Beta
		12.4 Putting It All Together: The Capital Asset Pricing Model
			The CAPM Equation Relating Risk to Expected Return
			Why Not Estimate Expected Returns Directly?
			Nobel Prize William Sharpe
			The Security Market Line
			The CAPM and Portfolios
			Summary of the Capital Asset Pricing Model
			The Big Picture
			Summary
			Critical Thinking
			Problems
			Chapter 12 Appendix Alternative Models of Systematic Risk
	Chapter 13. The Cost of Capital
		13.1 A First Look at the Weighted Average Cost of Capital
			The Firm’s Capital Structure
			Opportunity Cost and the Overall Cost of Capital
			Weighted Averages and the Overall Cost of Capital
			Weighted Average Cost of Capital Calculations
		13.2 The Firm’s Costs of Debt and Equity Capital
			Cost of Debt Capital
			Common Mistake Using the Coupon Rate as the Cost of Debt
			Cost of Preferred Stock Capital
			Cost of Common Stock Capital
		13.3 A Second Look at the Weighted Average Cost of Capital
			WACC Equation
			Weighted Average Cost of Capital in Practice
			Methods in Practice
		13.4 Using the WACC to Value a Project
			Key Assumptions
			WACC Method Application: Extending the Life of an AT&T Facility
			Summary of the WACC Method
		13.5 Project-Based Costs of Capital
			Common Mistake Using a Single Cost of Capital in Multi-Divisional Firms
			Cost of Capital for a New Acquisition
			Divisional Costs of Capital
			Interview With Shelagh Glaser
		13.6 When Raising External Capital Is Costly
			Summary
			Critical Thinking
			Problems
			Data Case
			Part 4 Integrative Case
Part 5: Long-Term Financing
	Chapter 14. Raising Equity Capital
		14.1 Equity Financing for Private Companies
			Sources of Funding
			Interview With Kevin Laws
			Crowdfunding: The Wave of the Future?
			Securities and Valuation
			Exiting an Investment in a Private Company
		14.2 Taking Your Firm Public: The Initial Public Offering
			Advantages and Disadvantages of Going Public
			Primary and Secondary IPO Offerings
			Other IPO Types
			Google’s IPO
			An Alternative to the Traditional IPO: Spotify\'s Direct Listing
		14.3 IPO Puzzles
			Underpriced IPOs
			“Hot” and “Cold” IPO Markets
			Global Financial Crisis 2008–2009: A Very Cold IPO Market
			High Cost of Issuing an IPO
			Poor Post-IPO Long-Run Stock Performance
		14.4 Raising Additional Capital: The Seasoned Equity Offering
			SEO Process
			SEO Price Reaction
			SEO Costs
			Summary
			Critical Thinking
			Problems
			Data Case
	Chapter 15. Debt Financing
		15.1 Corporate Debt
			Private Debt
			Debt Financing at Hertz: Bank Loans
			Debt Financing at Hertz: Private Placements
			Public Debt
			Debt Financing at Hertz: Public Debt
		15.2 Other Types of Debt
			Sovereign Debt
			Municipal Bonds
			Detroit’s Art Museum at Risk
			Asset-Backed Securities
			Global Financial Crisis CDOs, Subprime Mortgages, and the Financial Crisis
		15.3 Bond Covenants
			Types of Covenants
			Advantages of Covenants
			Application: Hertz’s Covenants
		15.4 Repayment Provisions
			Call Provisions
			New York City Calls Its Municipal Bonds
			Sinking Funds
			Convertible Provisions
			Summary
			Critical Thinking
			Problems
			Data Case
			Chapter 15 Appendix Using a Financial Calculatorto Calculate Yield to Call
			Part 5 Integrative Case
Part 6: Capital Structure and Payout Policy
	Chapter 16. Capital Structure
		16.1 Capital Structure Choices
			Capital Structure Choices Across Industries
			Capital Structure Choices Within Industries
		16.2 Capital Structure in Perfect Capital Markets
			Application: Financing a New Business
			Leverage and Firm Value
			The Effect of Leverage on Risk and Return
			Homemade Leverage
			Leverage and the Cost of Capital
			Common Mistake Capital Structure Fallacies
			Global Financial Crisis Bank Capital Regulation and the ROE Fallacy
			MM and the Real World
			Nobel Prize Franco Modigliani and Merton Miller
		16.3 Debt and Taxes
			The Interest Tax Deduction and Firm Value
			Value of the Interest Tax Shield
			The Interest Tax Shield with Permanent Debt 541
			Leverage and the WACC with Taxes
			Debt and Taxes: The Bottom Line
		16.4 The Costs of Bankruptcy and Financial Distress
			Direct Costs of Bankruptcy
			Bankruptcy Can Be Expensive
			Indirect Costs of Financial Distress
		16.5 Optimal Capital Structure: The Tradeoff Theory
			Differences Across Firms
			Optimal Leverage
		16.6 Additional Consequences of Leverage: Agency Costs and Information
			Agency Costs
			Airlines Use Financial Distress to Their Advantage
			Global Financial Crisis Moral Hazard and Government Bailouts
			Financial Distress and Rolling the Dice, Literally
			Debt and Information
		16.7 Capital Structure: Putting It All Together
		Summary
		Critical Thinking
		Problems
		Chapter 16 Appendix The Bankruptcy Code
	Chapter 17. Payout Policy
		17.1 Cash Distributions to Shareholders
			Dividends
			Share Repurchases
		17.2 Dividends Versus Share Repurchases in a Perfect Capital Market
			Alternative Policy 1: Pay a Dividend with Excess Cash
			Alternative Policy 2: Share Repurchase (No Dividend)
			Common Mistake Repurchases and the Supply of Shares
			Alternative Policy 3: High Dividend (Equity Issue)
			Modigliani-Miller and Dividend Policy Irrelevance
			Common Mistake The Bird in the Hand Fallacy
			Dividend Policy with Perfect Capital Markets
		17.3 The Tax Disadvantage of Dividends
			Taxes on Dividends and Capital Gains
			Optimal Dividend Policy with Taxes
			Tax Differences Across Investors
		17.4 Payout Versus Retention of Cash
			Retaining Cash with Perfect Capital Markets
			Retaining Cash with Imperfect Capital Markets
		17.5 Signaling with Payout Policy
			Dividend Smoothing
			Dividend Signaling
			Royal & SunAlliance’s Dividend Cut
			Signaling and Share Repurchases
			Interview With John Connors
		17.6 Stock Dividends, Splits, and Spin-Offs
			Stock Dividends and Splits
			Berkshire Hathaway’s A and B Shares
			Spin-Offs
		17.7 Advice for the Financial Manager
			Summary
			Critical Thinking
			Problems
			Data Case
			Part 6 Integrative Case
Part 7: Financial Planning and Forecasting
	Chapter 18. Financial Modeling and Pro Forma Analysis
		18.1 Goals of Long-Term Financial Planning
			Identify Important Linkages
			Analyze the Impact of Potential Business Plans
			Plan for Future Funding Needs
		18.2 Forecasting Financial Statements: The Percent of Sales Method
			Percent of Sales Method
			Pro Forma Income Statement
			Pro Forma Balance Sheet
			Common Mistake Confusing Stockholders’ Equity with Retained Earnings
			Making the Balance Sheet Balance: Net New Financing
			Choosing a Forecast Target
		18.3 Forecasting a Planned Expansion
			KMS Designs’ Expansion: Financing Needs
			KMS Designs’ Expansion: Pro Forma Income Statement
			Common Mistake Treating Forecasts as Fact
			Forecasting the Balance Sheet
		18.4 Growth and Firm Value
			Sustainable Growth Rate and External Financing
		18.5 Valuing the Expansion
			Forecasting Free Cash Flows
			Common Mistake Confusing Totaland Incremental Net Working Capital
			KMS Designs’ Expansion: Effect on Firm Value
			Optimal Timing and the Option to Delay
			Summary
			Critical Thinking
			Problems
			Chapter 18 Appendix The Balance Sheetand Statement of Cash Flows
	Chapter 19. Working Capital Management
		19.1 Overview of Working Capital
			The Cash Cycle
			Working Capital Needs by Industry
			Firm Value and Working Capital
		19.2 Trade Credit
			Trade Credit Terms
			Trade Credit and Market Frictions
			Common Mistake Using APR Instead of EARto Compute the Cost of Trade Credit
			Managing Float
		19.3 Receivables Management
			Determining the Credit Policy
			The 5 C’s of Credit
			Monitoring Accounts Receivable
		19.4 Payables Management
			Determining Accounts Payable Days Outstanding
			Stretching Accounts Payable
		19.5 Inventory Management
			Benefits of Holding Inventory
			Costs of Holding Inventory
			Inventory Management Adds to the Bottom Line at Gap
		19.6 Cash Management
			Motivation for Holding Cash
			Alternative Investments
			Hoarding Cash
			Summary
			Critical Thinking
			Problems
			Data Case
	Chapter 20. Short-Term Financial Planning
		20.1 Forecasting Short-Term Financing Needs
			Application: Springfield Snowboards, Inc.
			Negative Cash Flow Shocks
			Positive Cash Flow Shocks
			Seasonalities
			The Cash Budget
		20.2 The Matching Principle
			Permanent Working Capital
			Temporary Working Capital
			Permanent Versus Temporary Working Capital
			Financing Policy Choices
		20.3 Short-Term Financing with Bank Loans
			Single, End-of-Period Payment Loan
			Line of Credit
			Bridge Loan
			Common Loan Stipulations and Fees
		20.4 Short-Term Financing with Commercial paper
			Short-Term Financing and the Financial Crisis of the Fall of 2008
		20.5 Short-Term Financing with Secured Financing
			Accounts Receivable as Collateral
			A Seventeenth-Century Financing Solution
			Inventory as Collateral
			Loan Guarantees: The Ex-Im Bank Controversy
		20.6 Putting It All Together: Creating a Short-Term Financial Plan
			Summary
			Critical Thinking
			Problems
			Part 7 Integrative Case
Part 8: Special Topics
	Chapter 21. Option Applications and Corporate Finance
		21.1 Option Basics
			Option Contracts
			Stock Option Quotations
			Options on Other Financial Securities
			Options Are for More Than Just Stocks
		21.2 Option Payoffs at Expiration
			The Long Position in an Option Contract
			The Short Position in an Option Contract
			Profits for Holding an Option to Expiration
			Returns for Holding an Option to Expiration
		21.3 Factors Affecting Option Prices
			Strike Price and Stock Price
			Option Prices and the Exercise Date
			Option Prices and the Risk-Free Rate
			Option Prices and Volatility
		21.4 The Black-Scholes Option Pricing Formula
		21.5 Put-Call Parity
			Portfolio Insurance
		21.6 Options and Corporate Finance
			Summary
			Critical Thinking
			Problems
			Data Case
	Chapter 22. Mergers and Acquisitions
		22.1 Background and Historical Trends
			Merger Waves
			Types of Mergers
		22.2 Market Reaction to a Takeover
		22.3 Reasons to Acquire
			Economies of Scale and Scope
			Vertical Integration
			Expertise
			Monopoly Gains
			Efficiency Gains
			Tax Savings from Operating Losses
			Diversification
			Earnings Growth
			Managerial Motives to Merge
		22.4 The Takeover Process
			Valuation
			The Offer
			Merger “Arbitrage”
			Tax and Accounting Issues
			Board and Shareholder Approval
		22.5 Takeover Defenses
			Poison Pills
			Staggered Boards
			White Knights
			Golden Parachutes
			Recapitalization
			Other Defensive Strategies
			Regulatory Approval
			Weyerhaeuser’s Hostile Bid for Willamette Industries
		22.6 Who Gets the Value Added from a Takeover?
			The Free Rider Problem
			Toeholds
			The Leveraged Buyout
			The Leveraged Buyout of RJR-Nabisco by KKR
			The Freezeout Merger
			Competition
			Summary
			Critical Thinking
			Problems
	Chapter 23. International Corporate Finance
		23.1 Foreign Exchange
			The Foreign Exchange Market
			Exchange Rates
		23.2 Exchange Rate Risk
			Exchange Rate Fluctuations
			Brexit
			Hedging with Forward Contracts
			Cash-and-Carry and the Pricing of Currency Forwards
			Hedging Exchange Rate Risk with Options
		23.3 Internationally Integrated Capital Markets
			Common Mistake Forgetting to Flip theExchange Rate
		23.4 Valuation of Foreign Currency Cash Flows
			Application: Ityesi, Inc.
			The Law of One Price as a Robustness Check
		23.5 Valuation and International Taxation
			The TCJA: A New Approach to International Taxation
		23.6 Internationally Segmented Capital Markets
			Differential Access to Markets
			Macro-Level Distortions
			Implications of Internationally Segmented Capital Markets
		23.7 Capital Budgeting with Exchange Rate Risk
			Application: Ityesi, Inc.
			Conclusion
			Summary
			Critical Thinking
			Problems
			Data Case
Index
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