1 The Financial Manager and the Firm

1.1 The Role of the Financial Manager

1.2 Forms of Business Organization

1.3 Managing the Financial Function

1.4 The Goal of the Firm

1.5 Agency Conflicts: Separation of Ownership and Control

1.6 The Importance of Ethics in Culture

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Ethics Case-Incentives and Ethics: Cross-Selling at Wells Fargo

2 The Financial System and the Level of Interest Rates

2.1 The Financial System

2.2 Direct Financing

2.3 Types of Financial Markets

2.4 Market Efficiency

2.5 Financial Institutions and Indirect Financing

2.6 The Determinants of Interest Rate Levels

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3 Financial Statements, Cash Flows, and Taxes

3.1 Financial Statements and Accounting Principles

3.2 The Balance Sheet

3.3 Market Value versus Book Value

3.4 The Income Statement and the Statement of Retained Earnings

3.5 The Statement of Cash Flows

3.6 Tying Together the Financial Statements

3.7 International Accounting Issues

3.8 Corporate Income Tax

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4 Analyzing Financial Statements

4.1 Background for Financial Statement Analysis

4.2 Common-Size Financial Statements

4.3 Financial Ratios and Firm Performance

4.4 The Dupont System: A Diagnostic Tool

4.5 Selecting a Benchmark

4.6 Using Financial Ratios

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Ethics Case-A Sad Tale: The Demise of Arthur Andersen

5 The Time Value of Money

5.1 The Time Value of Money

5.2 Future Value and Compounding

5.3 Present Value and Discounting

5.4 Additional Concepts and Applications

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6 Discounted Cash Flows and Valuation

6.1 Multiple Cash Flows

6.2 Level Cash Flows: Annuities

6.3 Level Cash Flows: Perpetuities

6.4 Cash Flows That Grow at a Constant Rate

6.5 The Effective Annual Interest Rate

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the Present Value of an Ordinary Annuity/Problem

Ethics Case-Buy It on Credit and Be True to Your University

7 Risk and Return

7.1 Risk and Return

7.2 Holding Period Returns

7.3 Expected Returns

7.4 Variance and Standard Deviation as Measures of Risk

7.5 Arithmetic Average and Geometric (Compounded) Average Returns

7.6 Risk and Diversification

7.7 Systematic Risk

7.8 The Capital Asset Pricing Model

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Ethics Case-Pay for Performance or Just More Pay? The Conflicting Case for CEO Pay

8 Bond Valuation and the Structure of Interest Rates

8.1 Corporate Bonds

8.2 Bond Valuation

8.3 Bond Yields

8.4 Interest Rate Risk

8.5 The Determinants of Corporate Borrowing Costs

8.6 The Term Structure of Interest Rates

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Ethics Case-The Subprime Mortgage Market Meltdown: How Did It Happen?

9 Stock Valuation

9.1 The Market for Stocks

9.2 Common and Preferred Stock

9.3 Common Stock Valuation

9.4 The General Dividend-Valuation Model

9.5 Stock Valuation: Some Simplifying Assumptions

9.6 The Relation between R and g

9.7 Valuing Preferred Stock

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Ethics Case-Insider Trading: Exploiting the System

10 The Fundamentals of Capital Budgeting

10.1 An Introduction to Capital Budgeting

10.2 Net Present Value

10.3 The Payback Period

10.4 The Accounting Rate of Return

10.5 Internal Rate of Return

10.6 Investment Decisions with Capital Rationing

10.7 Capital Budgeting in Practice

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Ethics Case-Going Green: Can Automakers Invest in Environmental Solutions?

11 Cash Flows and Capital Budgeting

11.1 Calculating Project Cash Flows

11.2 Estimating Cash Flows in Practice

11.3 Forecasting Free Cash Flows

11.4 Special Cases

11.5 Harvesting an Asset

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Ethics Case-Unilever's Sustainable Living Plan

12 Evaluating Project Economics

12.1 Variable Costs, Fixed Costs, and Project Risk

12.2 Calculating Operating Leverage

12.3 Break-Even Analysis

12.4 The Economic Break-Even Point

12.5 Risk Analysis

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13 The Cost of Capital

13.1 The Firm's Overall Cost of Capital

13.2 The Cost of Debt

13.3 The Cost of Equity

13.4 Using the WACC in Practice

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14 Working Capital Management

14.1 Working Capital Basics

14.2 The Operating and Cash Conversion Cycles

14.3 Working Capital Management Strategies

14.4 Accounts Receivable

14.5 Inventory Management

14.6 Cash Management and Budgeting

14.7 Financing Working Capital

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15 How Firms Raise Capital

15.1 Bootstrapping

15.2 Venture Capital

15.3 Initial Public Offering

15.4 IPO Pricing and Cost

15.5 General Cash Offer by a Public Company

15.6 Private Markets and Bank Loans

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Ethics Case-Profiting from Death: "Janitor's Insurance"

16 Capital Structure Policy

16.1 Capital Structure and Firm Value

16.2 The Benefits and Costs of Using Debt

16.3 Two Theories of Capital Structure

16.4 Practical Considerations in Choosing a Capital Structure

Appendix: Leasing

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17 Dividends, Stock Repurchases, and Payout Policy

17.1 Dividends

17.2 Stock Repurchases

17.3 Dividends and Firm Value

17.4 Stock Dividends and Stock Splits

17.5 Setting a Dividend Payout

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18 Business Formation, Growth, and Valuation

18.1 Starting a Business

18.2 The Role of the Business Plan

18.3 Valuing a Business

18.4 Important Issues in Valuation

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19 Financial Planning and Managing Growth

19.1 Financial Planning

19.2 Financial Planning Models

19.3 A Better Financial Planning Model

19.4 Beyond the Basic Planning Models

19.5 Managing and Financing Growth

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20 Corporate Risk Management

20.1 Why Companies Manage Corporate Risks

20.2 Managing Operational,...