Ross, Stephen A. : Massachusetts Institute of Technology

Westerfield, Randolph W. : University of Southern California

Jaffe, Jeffrey : University of Pennsylvania

This popular textbook emphasizes the modern fundamentals of the theory of finance, while providing contemporary examples to make the theory come to life. The authors aim to present corporate finance as the working of a small number of integrated and powerful intuitions, rather than a collection of unrelated topics. They develop the central concepts of modern finance: arbitrage, net present value, efficient markets, agency theory, options, and the trade-off between risk and return, and use them to explain corporate finance with a balance of theory and application. The well-respected author team is known for their clear, accessible presentation of material that makes this text an excellent teaching tool.

Features:

• Each copy of the text will be packaged with FREE access to the educational version of Standard & Poor's Market Insight. This rich online resource provides 6 years of financial data for 100 top companies in the U.S. It is great for faculty that like to use real-world data in their course. The web address is www.mhhe.com/edumarketinsight. A password is required to access the site.
• New and updated Cases within selected chapters (1, 4, 7, 8, 16, 18, 19, 25, and 31) present situations with real companies and how their managers made decisions to solve various problems. The cases provide extended examples of the text material.
• Executive Summaries: Each chapter now begins with this "road map" that links the current chapter to concepts already learned so students have a better context for the upcoming material. This feature also highlights the real company examples in the chapter so students can see how these concepts are applied in the real financial world.
• New Challenge Problems, located in the end of chapter material, have been added to selected chapters that require an advanced level of problem solving.
• New Part VI on risk management and options presents increased coverage of risk management in corporate finance. Chapter 22 includes a section on "mergers and options" and more examples and applications have been added to Chapter 23 on real options.
• Part IV on Capital Structure and Dividend Policy has many updates on new research, debates, and data, including:
  New research and data on mutual fund performance relative to the stock market as a whole (Chapter 13)
  Interview with the CEO of Qualcomm on a case for low debt (Chapter 16)
  Additional coverage of distress (Chapter 16)
  Extended example on beta and leverage for a non-scale-enhancing project (Chapter 17)
  Interview with the CEO of Qualcomm on why its firm doesn't pay dividends (Chapter 18)
• Chapter 12 presents a section on lowering cost of capital through liquidity and also has enhanced coverage of EVA (economic value added).
• New discussions on Internet issues that affect corporate finance including the effects of the Internet and e-commerce on investments and IPOs are integrated in relevant areas.
• More global/international perspectives have been added throughout the book where appropriate. This content helps instructors integrate important international content into the course.

Features:

• End of chapter material includes: Summary and Conclusions, Key Terms, Suggested Readings, Questions and Problems, and Minicases (found in select chapters)
• Highlighted Concepts: important ideas are pulled out and presented in a shaded box so that students understand the importance and relevance of the material.
• Worked-out examples are found throughout the text to give students a clear understanding of the logic and structure of the solutions process.
• "In Their Own Words" boxes are unique articles written by distinguished scholars or practitioners on key topics throughout the text.
• Concept Questions are included after every major section, so students can test their comprehension of material.
• Stellar authorship! Stephen Ross is one of the most widely respected and published authors in finance and economics. He is particularly recognized for his work in developing the Arbitrage Pricing Theory, among many other incredible accomplishments.

Part I: Overview

1. Introduction to Corporate Finance
2. Accounting Statements and Cash Flow

Part II: Value and Capital Budgeting

3. Financial Markets and Net Present Value: First Principles of Finance
4. Net Present Value
5. How to Value Bonds and Stocks
6. Some Alternative Investment Rules
7. Net Present Value and Capital Budgeting
8. Strategy and Analysis in Using Net Present Value

Part III: Risk

9. Capital Market Theory: An Overview
10. Return Risk: The Capital Asset Pricing Model (CAPM)
11. An Alternative View of Risk and Return: The Arbitrage Pricing Theory
12. Risk, Return, and Capital Budgeting

Part IV: Capital Structure and Dividend Policy

13. Corporate Financing Decisions and Efficient Capital Markets
14. Long-Term Financing: An Introduction
15. Capital Structure: Basic Concepts
16. Capital Structure: Limits to the Use of Debit
17. Valuation and Capital Budgeting for the Levered Firm
18. Dividend Policy: Why Does it Matter?

Part V: Long-Term Financing

19. Issuing Equity Securities to the Public
20. Long-Term Debt
21. Leasing

Part VI: Options, Futures, and Corporate Finance

22. Options and Corporate Finance
23. Options and Corporate Finance: Extensions and Applications
24. Warrants and Convertibles
25. Derivatives and Hedging Risk

Part VII: Financial Planning and Short-Term Finance

26. Corporate Financial Models and Long-Term Planning
27. Short-Term Finance and Planning
28. Cash Management
29. Credit Management

Part VIII: Special Topics

30. Mergers and Acquisitions
31. Financial Distress
32. International Corporate Finance

Appendix A: Mathematical Tables
Appendix B: Selected Answers to End-of-Chapter Problems