Corporate finance,11th ed.
The teaching and the practice of corporate finance are more challenging and exciting than ever before. The last decade has seen fundamental changes in financial markets and financial instruments. In the early years of the 21st century, we still see announcements in the financial press about takeo...
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| Format: | Book |
| Language: | English |
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McGraw Hill
2020
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| Online Access: | http://dspace.uniten.edu.my/jspui/handle/123456789/15368 |
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| Summary: | The teaching and the practice of corporate finance are more challenging and exciting
than ever before. The last decade has seen fundamental changes in financial markets
and financial instruments. In the early years of the 21st century, we still see announcements
in the financial press about takeovers, junk bonds, financial restructuring, initial
public offerings, bankruptcies, and derivatives. In addition, there are the new recognitions
of “real” options, private equity and venture capital, subprime mortgages, bailouts,
and credit spreads. As we have learned in the recent global credit crisis and stock market
collapse, the world’s financial markets are more integrated than ever before. Both the
theory and practice of corporate finance have been moving ahead with uncommon speed,
and our teaching must keep pace.
These developments have placed new burdens on the teaching of corporate finance.
On one hand, the changing world of finance makes it more difficult to keep materials
up to date. On the other hand, the teacher must distinguish the permanent from the
temporary and avoid the temptation to follow fads. Our solution to this problem is to
emphasize the modern fundamentals of the theory of finance and make the theory come
to life with contemporary examples. Increasingly, many of these examples are outside
the United States.
All too often the beginning student views corporate finance as a collection of unrelated
topics that are unified largely because they are bound together between the covers
of one book. We want our book to embody and reflect the main principle of finance:
Namely, that good financial decisions will add value to the firm and to shareholders and
bad financial decisions will destroy value. The key to understanding how value is added
or destroyed is cash flows. To add value, firms must generate more cash than they use. We
hope this simple principle is manifest in all parts of this book.
The Intended Audience of This Book
This book has been written for the introductory courses in corporate finance at the
MBA level and for the intermediate courses in many undergraduate programs. Some
instructors will find our text appropriate for the introductory course at the undergraduate
level as well.
We assume that most students either will have taken, or will be concurrently enrolled
in, courses in accounting, statistics, and economics. This exposure will help students
understand some of the more difficult material. However, the book is self-contained, and a
prior knowledge of these areas is not essential. The only mathematics prerequisite is basic
algebra.
New to Eleventh Edition
Each chapter has been updated and where relevant, “internationalized.” We try to capture
the excitement of corporate finance with current examples, chapter vignettes, and openers.
Spreadsheets applications are spread throughout. ● CHAPTER 2 has been rewritten to better highlight the notion of cash flow and how
it contrasts with accounting income.
● CHAPTER 6 has been reorganized to better emphasize some special cases of
capital budgeting including cost cutting proposals and investments of unequal lives.
● CHAPTER 9 has updated the many new ways of stock market trading.
● CHAPTER 10 has updated material on historical risk and return and better motivated
the equity risk premium.
● CHAPTER 13 has sharpened the discussion of how to use the CAPM for the cost
of equity and WACC.
● CHAPTER 14 has updated and added to the discussion of behavioral finance and
its challenge to the efficient market hypothesis.
● CHAPTER 15 expands on its description of equity and debt and has new material
on the value of a call provision as well as the differences between book and market
values.
● CHAPTER 19 AND 20 continue to build on the notion of a financial life cycle
where capital structure decisions are driven by the varying needs for internal and
external finance over a firm’s life. |
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