Corporate Finance 7/E

Corporate Finance: Core Principles and Applications was developed for the graduate (MBA) level as a concise, up-to-date, and to-the-point product, the majority of which can be realistically covered in a single term or course. To achieve the objective of reaching out to the many different types of students and the varying course settings, corporate finance is distilled down to its core, while maintaining a decidedly modern approach. Purely theoretical issues are downplayed, and the use of extensive and elaborate calculations is minimized to illustrate points that are either intuitively obvious or of limited practical use. The goal was to focus on what students really need to carry away from a principles course. A balance is struck by introducing and covering the essentials, while leaving more specialized topics to follow-up courses. Net present value is treated as the underlying and unifying concept in corporate finance. Every subject covered is firmly rooted in valuation, and care is taken throughout to explain how particular decisions have valuation effects. Also, the role of the financial manager as decision maker is emphasized, and the need for managerial input and judgment is stressed.

PART ONE: OVERVIEW

Chapter One: Introduction to Corporate Finance

Chapter Two: Financial Statements and Cash Flow

Chapter Three: Financial Statements Analysis and FinancialModels

PART TWO: VALUATION AND CAPITAL BUDGETING

Chapter Four: Discounted Cash Flow Valuation

Chapter Five: Interest Rates and Bond Valuation

Chapter Six: Stock Valuation

Chapter Seven: Net Present Value and Other Investment Rules

Chapter Eight: Making Capital Investment Decisions

Chapter Nine: Risk Analysis, Real Options, and CapitalBudgeting

PART THREE: RISK AND RETURN

Chapter Ten: Risk and Return: Lessons from Market History

Chapter Eleven: Return and Risk: The Capital Asset PricingModel (CAPM)

Chapter Twelve: Risk, Cost of Capital, and Valuation

PART FOUR: CAPITAL STRUCTURE AND DIVIDEND POLICY

Chapter Thirteen: Efficient Capital Markets and BehavioralChallenges

Chapter Fourteen: Capital Structure: Basic Concepts

Chapter Fifteen: Capital Structure: Limits to the Use ofDebt

Chapter Sixteen: Dividends and Other Payouts

PART FIVE: SPECIAL TOPICS

Chapter Seventeen: Options and Corporate Finance

Chapter Eighteen: Short-Term Finance and Planning

Chapter Nineteen: Raising Capital

Chapter Twenty: International Corporate Finance

Chapter Twenty-One: Mergers and Acquisitions (web only)

APPENDIXES

A: Mathematical Tables

B: Solutions to Selected End-of-Chapter Problems

C: Using the HP 10B and TI BA II Plus FinancialCalculators

D: Key Equations

Stephen Ross

The late Stephen A. Ross was the Franco Modigliani Professor of Finance and Economics at the Sloan School of Management, Massachusetts Institute of Technology. One of the most widely published authors in finance and economics, Professor Ross was known for his work in developing the Arbitrage Pricing Theory as well as his substantial contributions to the discipline through his research on signaling, agency theory, option pricing, and the theory of the term structure of interest rates, among other topics. A past president of the American Finance Association, he also served as an associate editor of various academic and practitioner journals. He was a trustee of CalTech.

Randolph Westerfield

Randolph W. Westerfield is Dean Emeritus and the Charles B. Thornton Professor in Finance Emeritus at the University of Southern California’s Marshall School of Business. Professor Westerfield came to USC from the Wharton School, University of Pennsylvania, where he was the chairman of the finance department and a member of the finance faculty for 20 years. He is a member of the board of trustees of Oaktree Capital mutual funds. His areas of expertise include corporate financial policy, investment management, and stock market price behavior.

Jeffrey Jaffe

Jeffrey F. Jaffe has been a frequent contributor to finance and economic literature in such journals as the Quarterly Economic Journal, The Journal of Finance, The Journal of Financial and Quantitative Analysis, The Journal of Financial Economics, and The Financial Analysts Journal . His best-known work concerns insider trading, where he showed both that corporate insiders earn abnormal profits from their trades and that regulation has little effect on these profits. He has also made contributions concerning initial public offerings, the regulation of utilities, the behavior of market makers, the fluctuation of gold prices, the theoretical effect of inflation on the interest rate, the empirical effect of inflation on capital asset prices, the relationship between small-capitalization stocks and the January effect, and the capital structure decision.

Bradford Jordan

Bradford D. Jordan is Visiting Scholar in the Warrington College of Business at the University of Florida. He previously held the duPont Endowed Chair in Banking and Financial Services at the University of Kentucky, where he was department chair for many years. Professor Jordan has published numerous articles in top journals on issues such as cost of capital, capital structure, and the behavior of security prices. He is a past president of the Southern Finance Association, and he is coauthor of Fundamentals of Investments: Valuation and Management, 9e, a leading investments text, also published by McGraw Hill.