Table of Contents

Part One: Introduction
1.Goals and Governance of the Corporation
2.Financial Markets and Institutions
3.Accounting and Finance
4.Measuring Corporate Performance

Part Two: Value
5.The Time Value of Money
6.Valuing Bonds
7.Valuing Stocks
8.Net Present Value and Other Investment Criteria
9.Using Discounted Cash-Flow Analysis to Make Investment Decisions
10.Project Analysis

Part Three: Risk
11.Introduction to Risk, Return, and the Opportunity Cost of Capital
12.Risk, Return, and Capital Budgeting
13.The Weighted-Average Cost of Capital and Company Valuation

Part Four: Financing
14.Introduction to Corporate Financing
15.How Corporations Raise Venture Capital and Issue Securities

Part Five: Debt and Payout Policy
16.Debt Policy
17.Payout Policy

Part Six: Financial Analysis and Planning
18.Long-Term Financial Planning
19.Short-Term Financial Planning
20.Working Capital Management

Part Seven: Special Topics
21.Mergers, Acquisitions, and Corporate Control
22.International Financial Management
23.Options
24.Risk Management

Part Eight: Conclusion
25.What We Do and Do Not Know about Finance

Appendix: Present Value and Future Value Tables

About the Author

Richard A. Brealey - Emeritus Professor of Finance at London Business School. He is the former president of the European Finance Association and a former director of the American Finance Association. He is a fellow of the British Academy and has served as a special adviser to the Governor of the Bank of England and director of a number of financial institutions. Other books written by Professor Brealey include Introduction to Risk and Return from Common Stocks.

Stewart C. Myers - Emeritus Professor of Financial Economics at MIT’s Sloan School of Management. He is past president of the American Finance Association, a research associate at the National Bureau of Economic Research, a principal of the Brattle Group Inc., and a retired director of Entergy Corporation. His research is primarily concerned with the valuation of real and financial assets, corporate financial policy, and financial aspects of government regulation of business. He is the author of influential research papers on many topics, including adjusted present value, rate of return regulation, pricing and capital allocation in insurance, real options, and moral hazard and information issues in capital structure decisions.

Alan J. Marcus is a Professor of Finance in the Wallace E. Carroll School of Management at Boston College. His main research interests are in derivatives and securities markets. He is co-author (with Zvi Bodie and Alex Kane) of the texts Investments and Essentials of Investments. Professor Marcus has served as a research fellow at the National Bureau of Economic Research. Professor Marcus also spent two years at Freddie Mac, where he helped to develop mortgage pricing and credit risk models. He currently serves on the Research Foundation Advisory Board of the CFA Institute.