Fundamentals of Corporate Finance

Cover
	Title Page
	Copyright
	Dedication
	About the Authors
	Preface
	Organization and Coverage
	Proven Pedagogical Framework
	New to This Edition
	Instructor and Student Resources
	Brief Contents
	Contents
	PART 1 INTRODUCTION
		CHAPTER 1 The Financial Manager and the Firm
			1.1 THE ROLE OF THE FINANCIAL MANAGER
				Stakeholders
				It’s All about Cash Flows
				Building Intuition: Cash Flows Matter Most to Investors
				Three Fundamental Decisions in Financial Management
				Building Intuition: Sound Investments are Those Where the Value of the Benefits Exceeds Their Cost
				Building Intuition: Financing Decisions Affect the value of the firm
			1.2 FORMS OF BUSINESS ORGANIZATION
				Sole Proprietorships
				Partnerships
				Corporations
				Hybrid Forms of Business Organization
			1.3 MANAGING THE FINANCIAL FUNCTION
				Organizational Structure
				Positions Reporting to the CFO
				External Auditors
				The Audit Committee
				The Compliance and Ethics Director
			1.4 THE GOAL OF THE FIRM
				What Should Management Maximize?
				Why Not Maximize Profits?
				Building Intuition: The Timing of Cash Flows Affects Their Value
				Building Intuition: The Riskiness of Cash Flows Affects Their Value
				Maximize the Value of the Firm’s Stock
				Building Intuition: The Financial Manager’s Goal Is to Maximize the Value of the Firm’s Stock
				Can Management Decisions Affect Stock Prices?
			1.5 AGENCY CONFLICTS: SEPARATION OF OWNERSHIP AND CONTROL
				Ownership and Control
				Agency Relationships
				Do Managers Really Want to Maximize Stock Price?
				Aligning the Interests of Management and Stockholders
				Sarbanes-Oxley and Other Regulatory Reforms
			1.6 THE IMPORTANCE OF ETHICS IN BUSINESS
				Business Ethics
				Are Business Ethics Different from Everyday Ethics?
				Types of Ethical Conflicts in Business
				The Importance of an Ethical Business Culture
				Serious Consequences
			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 System and the Level of Interest Rates
			2.1 THE FINANCIAL SYSTEM
				The Financial System at Work
				How Funds Flow through the Financial System
			2.2 DIRECT FINANCING
				A Direct Market Transaction
				Investment Banks and Direct Financing
			2.3 TYPES OF FINANCIAL MARKETS
				Primary and Secondary Markets
				Exchanges and Over-the-Counter Markets
				Money and Capital Markets
				Public and Private Markets
				Futures and Options Markets
			2.4 MARKET EFFICIENCY
				Efficient Market Hypotheses
			2.5 FINANCIAL INSTITUTIONS AND INDIRECT FINANCING
				Indirect Market Transactions
				Financial Institutions and Their Services
				Corporations and the Financial System
			2.6 THE DETERMINANTS OF INTEREST RATE LEVELS
				The Real Rate of Interest
				Loan Contracts and Inflation
				The Fisher Equation and Inflation
				Cyclical and Long-Term Trends in 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 3 Financial Statements, Cash Flows, and Taxes
			3.1 FINANCIAL STATEMENTS AND ACCOUNTING PRINCIPLES
				The Annual Report
				Generally Accepted Accounting Principles
				Fundamental Accounting Principles
				International GAAP
				Illustrative Company: Diaz Manufacturing
			3.2 THE BALANCE SHEET
				Current Assets and Liabilities
				Long-Term Assets and Liabilities
				Equity
			3.3 MARKET VALUE VERSUS BOOK VALUE
				A More Informative Balance Sheet
				A Market-Value Balance Sheet
			3.4 THE INCOME STATEMENT AND THE STATEMENT OF RETAINED EARNINGS
				The Income Statement
				The Statement of Retained Earnings
			3.5 THE STATEMENT OF CASH FLOWS
				Sources and Uses of Cash
			3.6 TYING THE FINANCIAL STATEMENTS TOGETHER
			3.7 CASH FLOWS TO INVESTORS
				Net Income versus the Cash Flow to Investors
				Cash Flow To Investors: Putting It All Together
			3.8 FEDERAL INCOME TAX
				Corporate Income Tax Rates
				Average versus Marginal Tax Rates
				Unequal Treatment of Dividends and Interest Payments
			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
				Perspectives on Financial Statement Analysis
				Guidelines for Financial Statement Analysis
			4.2 COMMON-SIZE FINANCIAL STATEMENTS
				Common-Size Balance Sheets
				Common-Size Income Statements
			4.3 FINANCIAL RATIOS AND FIRM PERFORMANCE
				Why Ratios Are Better Measures
				Short-Term Liquidity Ratios
				Efficiency Ratios
				Leverage Ratios
				Profitability Ratios
				Market-Value Indicators
				Concluding Comments on Ratios
			4.4 THE DUPONT SYSTEM: A DIAGNOSTIC TOOL
				An Overview of the DuPont System
				The ROA Equation
				The ROE Equation
				The DuPont Equation
				Applying the DuPont System
				Is Maximizing ROE an Appropriate Goal?
			4.5 SELECTING A BENCHMARK
				Trend Analysis
				Industry Analysis
				Peer Group Analysis
			4.6 USING FINANCIAL RATIOS
				Performance Analysis of Diaz Manufacturing
				Limitations of Financial Statement Analysis
			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
				Consuming Today or Tomorrow
				Building Intuition: The Value of Money Changes with Time
				Time Lines as Aids to Problem Solving
				Financial Calculator
			5.2 FUTURE VALUE AND COMPOUNDING
				Single-Period Investment
				Two-Period Investment
				The Future Value Equation
				The Future Value Factor
				Applying the Future Value Formula
				Building Intuition: Compounding Drives Much of the Earnings on Long-Term Investments
				Calculator Tips for Future Value Problems
			5.3 PRESENT VALUE AND DISCOUNTING
				Single-Period Investment
				Multiple-Period Investment
				The Present Value Equation
				Future and Present Value Equations Are the Same
				Applying the Present Value Formula
				The Relations among Time, the Discount Rate, and Present Value
				Calculator Tips for Present Value Problems
				Future Value versus Present Value
			5.4 ADDITIONAL CONCEPTS AND APPLICATIONS
				Finding the Interest Rate
				Finding How Many Periods It Takes an Investment to Grow a Certain Amount
				The Rule of 72
				Compound Growth Rates
				Concluding Comments
			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
				Future Value of Multiple Cash Flows
				Present Value of Multiple Cash Flows
			6.2 LEVEL CASH FLOWS: ANNUITIES AND PERPETUITIES
				Present Value of an Annuity
				Future Valueof an Annuity
				Perpetuities
				Annuities Due
			6.3 CASH FLOWS THAT GROW AT A CONSTANTRATE
				Growing Annuity
				Growing Perpetuity
			6.4 THE EFFECTIVE ANNUAL INTEREST RATE
				Why the Confusion?
				Calculating the Effective Annual Interest Rate
				Comparing Interest Rates
				Consumer Protection Acts and Interest Rate Disclosure
				The AppropriateInterest Rate Factor
			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
				Holding Period Returns
				Expected Returns
			7.3 THE VARIANCE AND STANDARD DEVIATION AS MEASURES OF RISK
				Calculating the Variance and Standard Deviation
				Interpreting the Variance and Standard Deviation
				Historical Market Performance
			7.4 RISK AND DIVERSIFICATION
				Single-Asset Portfolios
				Portfolios with More Than One Asset
				Building Intuition: Diversified Portfolios are Less Risky
				The Limits of Diversification
			7.5 SYSTEMATIC RISK
				Why Systematic Risk Is All That Matters
				Building Intuition: Systematic Risk Is the Risk That Matters
				Measuring Systematic Risk
			7.6 COMPENSATION FOR BEARING SYSTEMATIC RISK
			7.7 THE CAPITAL ASSET PRICING MODEL
				The Security Market Line
				The Capital Asset Pricing Model and Portfolio Returns
			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 CORPORATE BONDS
				Market for Corporate Bonds
				Bond Price Information
				Types of Corporate Bonds
			8.2 BOND VALUATION
				The Bond Valuation Formula
				Calculator Tip: Bond Valuation Problems
				Par, Premium, and Discount Bonds
				Semiannual Compounding
				Zero Coupon Bonds
			8.3 BOND YIELDS
				Yield to Maturity
				Effective Annual Yield
				Realized Yield
			8.4 INTEREST RATE RISK
				Bond Theorems
				Bond Theorem Applications
			8.5 THE STRUCTURE OF INTEREST RATES
				Marketability
				Call Provision
				Default Risk
				The Term 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
			ETHICS CASE: The Subprime Mortgage Market Meltdown: How Did It Happen?
		CHAPTER 9 Stock Valuation
			9.1 THE MARKET FOR STOCKS
				Secondary Markets
				Secondary Markets and Their Efficiency
				Stock Market Indexes
				Reading the Stock Market Listings
				Common and Preferred Stock
				Preferred Stock: Debt or Equity?
			9.2 COMMON STOCK VALUATION
				A One-Period Model
				A Perpetuity Model
				The General Dividend Valuation Model
				The Growth Stock Pricing Paradox
			9.3 STOCK VALUATION: SOME SIMPLIFYING ASSUMPTIONS
				Zero-Growth Dividend Model
				Constant-Growth Dividend Model
				Computing Future Stock Prices
				The Relationship between R and g
				Mixed (Supernormal) Growth Dividend Model
			9.4 VALUING PREFERRED STOCK
				Preferred Stock with a Fixed Maturity
				Preferred Stock with No Maturity
			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
				The Importance of Capital Budgeting
				The Capital Budgeting Process
				Sources of Information
				Classification of Investment Projects
				Basic Capital Budgeting Terms
				Building Intuition: Investment Decisions Have Opportunity Costs
			10.2 NET PRESENT VALUE
				Valuation of Real Assets
				NPV—The Basic Concept
				NPV and Value Creation
				Framework for Calculating NPV
				Net Present Value Techniques
				Concluding Comments on NPV
			10.3 THE PAYBACK PERIOD
				Computing the Payback Period
				How the Payback Period Performs
				Discounted Payback Period
				Evaluating the Payback Rule
			10.4 THE ACCOUNTING RATE OF RETURN
			10.5 INTERNAL RATE OF RETURN
				Calculating the IRR
				When the IRR and NPV Methods Agree
				When the NPV and IRR Methods Disagree
				Modified Internal Rate of Return(MIRR)
				IRR versus NPV: A Final Comment
			10.6 CAPITAL BUDGETING IN PRACTICE
				Practitioners’ Methods of Choice
				Postaudit and Ongoing Reviews
			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
				Building Intuition: Capital Budgeting is Forward Looking
				Incremental After-Tax Free Cash Flows
				The FCF Calculation
				Building Intuition: Incremental After-Tax Free Cash Flows Are What Stockholders Care About in Capital Budgeting
				Cash Flows from Operations
				Cash Flows Associated with Capital Expenditures and Net Working Capital
				The FCF Calculation: An Example
				FCF versus Accounting Earnings
			11.2 ESTIMATING CASH FLOWS IN PRACTICE
				Five General Rules for Incremental After-Tax Free Cash Flow Calculations
				Nominal versus Real Cash Flows
				Tax Rates and Depreciation
				Computing the Terminal-Year FCF
				Expected Cash Flows
				Building Intuition: We Discount Expected Cash Flows in an NPV Analysis
			11.3 FORECASTING FREE CASH FLOWS
				Cash Flows from Operations
				Cash Flows Associated with Capital Expenditures and Net Working Capital
			11.4 SPECIAL CASES (OPTIONAL)
				Projects with Different Lives
				When to Harvest an Asset
				When to Replace an Existing Asset
				The Cost of Using an Existing Asset
			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: Unilever’s Sustainable Living Plan
		CHAPTER 12 Evaluating Project Economics and Capital Rationing
			12.1 VARIABLE COSTS, FIXED COSTS, AND PROJECT RISK
				Cost Structure and Sensitivity of EBITDA to Revenue Changes
				Cost Structure and Sensitivity of EBIT to Revenue Changes
				Building Intuition: High Fixed Costs Mean Larger Fluctuations in Cash Flows and Profits
			12.2 CALCULATING OPERATING LEVERAGE
				Degree of Pretax Cash Flow Operating Leverage
				Degree of Accounting Operating Leverage
				Building Intuition: Revenue Changes Drive Profit Volatility Through Operating Leverage
			12.3 BREAK-EVEN ANALYSIS
				Pretax Operating Cash Flow Break-Even
				Accounting Break-Even
			12.4 RISK ANALYSIS
				Sensitivity Analysis
				Scenario Analysis
				Simulation Analysis
			12.5 INVESTMENT DECISIONS WITH CAPITAL RATIONING
				Capital Rationing in a Single Period
				Capital Rationing across Multiple Periods
			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
				The Finance Balance Sheet
				Building Intuition: The Market Value of a Firm’s Assets Equals the Market Value of the Claims on Those Assets
				How Firms Estimate Their Cost of Capital
				Building Intuition: A Firm’s Cost of Capital Is a Weighted Average of All of Its Financing Costs
			13.2 THE COST OF DEBT
				Key Concepts for Estimating the Cost of Debt
				Building Intuition: The Current Cost of Long-Term Debt Is What Matters When Calculating WACC
				Estimating the Current Cost of a Bond or an Outstanding Loan
				Taxes and the Cost of Debt
				Estimating the Cost of Debt for a Firm
			13.3 THE COST OF EQUITY
				Common Stock
				Preferred Stock
			13.4 USING THE WACC IN PRACTICE
				Calculating WACC: An Example
				Limitations of WACC as a Discount Rate for Evaluating Projects
				Alternatives to Using WACC for Evaluating Projects
			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 WORKING CAPITAL MANAGEMENT AND FINANCING DECISIONS
		CHAPTER 14 Working Capital Management
			14.1 WORKING CAPITAL BASICS
				Working Capital Terms and Concepts
				Working Capital Accounts and Trade-Offs
			14.2 THE OPERATING AND CASH CONVERSION CYCLES
				Operating Cycle
				Cash Conversion Cycle
			14.3 WORKING CAPITAL MANAGEMENT STRATEGIES
				Flexible Current Asset Management Strategy
				Restrictive Current Asset Management Strategy
				The Working Capital Trade-Off
			14.4 ACCOUNTS RECEIVABLE
				Terms of Sale
				Aging Accounts Receivable
			14.5 INVENTORY MANAGEMENT
				Economic Order Quantity
				Just-in-Time InventoryManagement
				Reasons for Holding Cash
			14.6 CASH MANAGEMENT AND BUDGETING
			Cash Collection
			14.7 FINANCING WORKING CAPITAL
				Strategies for Financing Working Capital
				Financing Working Capital in Practice
				Sources of Short-Term Financing
			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
				How New Businesses Get Started
				Initial Funding of the Firm
			15.2 VENTURE CAPITAL
				The Venture Capital Industry
				Why Venture Capital Funding Is Different
				The Venture Capital Funding Cycle
				Venture Capitalists Provide More Than Financing
				The Cost of Venture Capital Funding
			15.3 INITIAL PUBLIC OFFERING
				Advantages and Disadvantages of Going Public
				Building Intuition: Investors View Seasoned Securities as Less Risky Than Unseasoned Securities
				Investment Banking Services
				Origination
				Underwriting
				Distribution
				The Proceeds
			15.4 IPO PRICING AND COST
				The Underpricing Debate
				IPOs Are Consistently Underpriced
				The Cost of an IPO
			15.5 GENERAL CASH OFFER BY A PUBLIC COMPANY
				Competitive versus Negotiated Sale
				The Cost of a General Cash Offer
			15.6 PRIVATE MARKETS AND BANK LOANS
				Private versus Public Markets
				Private Placements
				Private Equity Firms
				Private Investments in Public Equity
				Commercial Bank Lending
				Concluding Comments on Funding the Firm
			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
				The Optimal Capital Structure
				Building Intuition: The Optimal Capital Structure Minimizes the Cost of Financing a Firm’s Activities
				The Modigliani and Miller Propositions
				Building Intuition: Capital Structure Choices Do Not Affect Firm Value If They Do Not Affect the Value of the Free Cash Flows to Investors
				Building Intuition: The Cost of Equity Increases With Financial Leverage
			16.2 THE BENEFITS AND COSTS OF USING DEBT
				The Benefits of Debt
				The Costs of Debt
				Building Intuition: People Behave Differently toward a Firm in Financial Distress, and This Increases Bankruptcy Costs
			16.3 TWO THEORIES OF CAPITAL STRUCTURE
				The Trade-Off Theory
				The Pecking Order Theory
				The Empirical Evidence
			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
			APPENDIX: Leasing
		CHAPTER 17 Dividends, Stock Repurchases, and Payout Policy
			17.1 DIVIDENDS
				Building Intuition: Dividends Reduce the Stockholders’ Investment in a Firm
				Types of Dividends
				The Dividend Payment Process
				Building Intuition: Dividend Announcements Send Signals to Investors
			17.2 STOCK REPURCHASES
				How Stock Repurchases Differ from Dividends
				How Stock Is Repurchased
			17.3 DIVIDENDS AND FIRM VALUE
				Benefits and Costs of Dividends
				Stock Price Reactions to Dividend Announcements
				Dividends versus Stock Repurchases
			17.4 STOCK DIVIDENDS AND STOCK SPLITS
				Stock Dividends
				Stock Splits
				Reasons for Stock Dividends and Splits
			17.5 SETTING A DIVIDEND PAYOUT
				What Managers Tell Us
				Practical Considerations in Setting a Dividend Payout
			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
				Making the Decision to Proceed
				Choosing the Right Organizational Form
				Financial Considerations
			18.2 THE ROLE OF THE BUSINESS PLAN
				Why Business Plans Are Important
				The Key Elements of a Business Plan
			18.3 VALUING A BUSINESS
				Fundamental Business Valuation Principles
				Building Intuition: The Value of a Business Is Specific to a Point in Time
				Building Intuition: The Value of a Business Is Not the Same to All Investors
				Business Valuation Approaches
			18.4 IMPORTANT ISSUES IN VALUATION
				Public versus Private Companies
				Young (Rapidly Growing) versus Mature Companies
				Controlling Interest versus Minority Interest
				Key People
			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 19 Financial Planning and Forecasting
			19.1 FINANCIAL PLANNING
				The Planning Documents
				Building Intuition: A Firm’s Strategy Drives Its Business Decisions
				Concluding Comments
			19.2 FINANCIAL PLANNING MODELS
				The Sales Forecast
				Building a Financial Planning Model
				A Simple Planning Model
			19.3 A BETTER FINANCIAL PLANNING MODEL
				The Blackwell Sales Company
				The Income Statement
				The Balance Sheet
				The Preliminary Pro Forma Balance Sheet
				The Final Pro Forma Balance Sheet
			19.4 BEYOND THE BASIC PLANNING MODELS
				Improving Financial Planning Models
			19.5 MANAGING AND FINANCING GROWTH
				External Funding Needed
				A Graphical View of Growth
				The Sustainable Growth Rate
				Growth Rates and Profits
				Growth As a Planning Goal
			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 OPTIONS IN CORPORATE FINANCE AND INTERNATIONAL DECISIONS
		CHAPTER 20 Options and Corporate Finance
			20.1 FINANCIAL OPTIONS
				Call Options
				Put Options
				American, European, and Bermudan Options
				More on the Shapes of Option Payoff Functions
				Building Intuition: Payoff Functions for Options Are Not Linear
			20.2 OPTION VALUATION
				Limits on Option Values
				Variables That Affect Option Values
				The Binomial Option Pricing Model
				Put-Call Parity
				Valuing Options Associated with the Financial Securities That Firms Issue
			20.3 REAL OPTIONS
				Options to Defer Investment
				Options to Make Follow-On Investments
				Options to Change Operations
				Options to Abandon Projects
				Concluding Comments on NPV Analysis and Real Options
			20.4 AGENCY COSTS
				Agency Costs of Debt
				Agency Costs of Equity
			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 FINANCIAL MANAGEMENT
				Globalization of the World Economy
				The Rise of Multinational Corporations
				Factors Affecting International Financial Management
				Goals of International Financial Management
				Basic Principles Remain the Same
				Building Intuition: The Basic Principles of Finance Apply No Matter Where You Do Business
			21.2 FOREIGN EXCHANGE MARKETS
				Market Structure and Major Participants
				Foreign Exchange Rates
				The Equilibrium Exchange Rate
				Foreign Currency Quotations
			21.3 INTERNATIONAL CAPITAL BUDGETING
				Determining Cash Flows
				Exchange Rate Risk
				Country Risk
				The Barcelona Example
			21.4 GLOBAL MONEY AND CAPITAL MARKETS
				The Emergence of the Euromarkets
				The Eurocurrency Market
				The Eurocredit Market
				International Bond Markets
			21.5 INTERNATIONAL BANKING
				Risks Involved in International Bank Lending
				Eurocredit 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
		Appendix A: Future Value and Present Value Tables
		Appendix B: Solutions to Selected Questions and Problems
		Glossary
		Subject Index
		Company Index