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Just Published
Cover of Corporate Finance v3.0
Published: 
July 2024
Page Count: 
558
ISBN (Digital): 
979-8-88794-009-0

Corporate Finance

Version 3.0
By Stan Eakins and William McNally

Included Supplements

Key Features

  • Over 330 short videos (1–5 mins.) scripted and recorded by the authors provide detailed solutions to examples, explain the meanings behind key concepts and topics, enrich hybrid and online courses, and fully support a flipped-classroom model
  • Organizational structure frees instructors to focus on ideas and applications and rely on the book and its rich media links to explain computation mechanics for both Excel and calculator
  • Explains core concepts multiple ways and through multiple media: in words, with numeric examples, and video
  • Rich learning structure
    • “Learning Objectives” preview each chapter and help focus the reader’s attention on material to come
    • “Key Terms” feature pop-up definitions when read online or a marginal glossary when printed
    • "Explain It" videos demonstrate key concepts and clarify topics that typically confuse learners
    • "Explore It" videos provide richer context by walking students through animations where the inputs are manipulated, and the authors discuss the implications
    • “Tips” remind students where they previously encountered similar material, clarify key points, or warn of common misunderstandings and how to avoid them
    • Embedded online quizzes and flashcards encourage students to assess their own learning as they read
    • Plentiful number of worked examples model how to perform key operations
    • Solutions videos provide detailed explanations of solutions to examples in three ways: manual calculations using algebra, calculator, and Excel
    • Downloadable Excel spreadsheets accompanied by videos explaining the layout and functions used in the corresponding spreadsheet
  • Key chapters are organized in easily managed, "bite-sized" chunks and all chapters were built with an online, modular course structure in mind
  • New chapter on Mergers and Acquisitions (Chapter 19) and new section on relative valuation (Section 17.5)
  • All supplements were written by the authors and extensively class tested

Educators

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Students

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Corporate Finance is suitable for the following courses: Introduction to Corporate Finance, Corporate Finance, Principles of Finance, Financial Management, or similar titles at the undergraduate level at both two- and four-year colleges and universities, and first courses in the MBA finance curriculum.


Corporate Finance was specifically written to be an online resource to provide on-demand review of concepts and successfully close gaps in problem-solving skills. In a typical corporate finance course, a lot of time is spent on key mathematical concepts, which doesn’t leave much time to apply the concepts. To combat this challenge, the online book includes a series of over 330 author-recorded videos embedded throughout. The format encourages students to push beyond rote memorization of “how to do the math” and practice operations in conjunction with mastering key concepts. This learning strategy frees up valuable time to teach problem solving, analyze cases, or discuss current financial events. Students gain more opportunities to apply key concepts to the real world of finance and truly understand the meaning behind the numbers. 

 

New in This Version

  • Updated financial market data, such as JC Penny’s bankruptcy and the COVID-19 pandemic’s impact
  • Introduces stakeholder capitalism and ESG (environment, social, government) (Section 1.4)
  • New Dupont mini-case analysis with video solution (Section 2.5)
  • Clarified discussion of book value of equity and market value (Section 2.3)
  • Earlier discussion of CAPM (capital asset pricing model) (Section 6.3)
  • Added discussion of Section 179 tax deductibility (Section 14.3)
  • New section on relative valuation to shore up a key knowledge gap exhibited by many finance graduates (Section 17.5)
  • New explanations of the clearinghouse’s role in daily marking-to-market and in reversing (offset) trades (Section 18.2)
  • New margin account simulator exercise with video solution (Section 18.2)
  • New chapter on Mergers and Acquisitions (Chapter 19)
  • New and revised homework questions with an expanded number of randomized variants
  • About the Authors
  • Dedication
  • Preface 
  • Acknowledgments

    • Chapter 1: Introduction to Finance

  • 1.1 The Financial System
  • 1.2 Money and Capital Markets
  • 1.3 Primary and Secondary Markets
  • 1.4 Corporate Governance
  • 1.5 Six Important Ideas in Finance

    • Chapter 2: Financial Statements and Ratio Analysis

  • 2.1 The Financial Statements
  • 2.2 The Goals of Financial Analysis
  • 2.3 Financial Statement and Ratio Analysis
  • 2.4 Common-Sized Financial Statements
  • 2.5 DuPont Ratio Analysis
  • 2.6 Putting the Ratios to Work

    • Chapter 3: Introduction to the Time Value of Money

  • 3.1 Interest and Timelines
  • 3.2 Future Value of a Sum
  • 3.3 The Effective Interest Rate
  • 3.4 Solving for Rate and Time Periods
  • 3.5 Present Value of a Sum

    • Chapter 4: Annuities and Loans

  • 4.1 Future Value of Streams of Payments
  • 4.2 Present Value of Streams of Payments
  • 4.3 Help with Advanced Time Value Problems
  • 4.4 Balloon Loans
  • 4.5 Amortized Loans

    • Chapter 5: Introduction to Risk and Return

  • 5.1 The Risk–Return Relationship
  • 5.2 Computing the Return on a Single Asset
  • 5.3 Evaluating the Risk of Holding a Single Asset
  • 5.4 Computing the Expected Return for a Portfolio of Assets
  • 5.5 Evaluating the Risk of a Portfolio of Assets

    • Chapter 6: Portfolio Theory

  • 6.1 Diversification
  • 6.2 The Market Portfolio
  • 6.3 Systematic Risk
  • 6.4 Portfolios with the Risk-Free Asset
  • 6.5 Risk and Return in Equilibrium

    • Chapter 7: Interest Rates and Bonds

  • 7.1 Zero Coupon Bond Features and Markets
  • 7.2 Zero Coupon Bond Yields and Pricing
  • 7.3 Determinants of the Shape of the Yield Curve
  • 7.4 Coupon Bond Features and Markets
  • 7.5 Coupon Bond Yields and Pricing
  • 7.6 Coupon Bond Price Properties
  • 7.7 Appendix: Forward Rates, Expectations, and Maturity Preference

    • Chapter 8: Stock Valuation and Market Efficiency

  • 8.1 Features of Stocks and Stock Markets
  • 8.2 Valuation of Preferred Stock
  • 8.3 The Valuation of Common Stock Using the Dividend Discount Model
  • 8.4 Stock Repurchases and the Total Payout Model
  • 8.5 Price Earnings Valuation Method
  • 8.6 The Efficient Markets Hypothesis

    • Chapter 9: Capital Budgeting: Introduction and Techniques

  • 9.1 Why Do Capital Budgeting?
  • 9.2 Steps in the Capital Budgeting Process
  • 9.3 Overview of Techniques for Analyzing Projects
  • 9.4 Net Present Value and Profitability Index
  • 9.5 Internal Rate of Return and MIRR

    • Chapter 10: Capital Budgeting: Estimating Cash Flows

  • 10.1 Free Cash Flow
  • 10.2 Expansion Projects: Basic
  • 10.3 Replacement Projects: Basic
  • 10.4 Capital Budget Refinements
  • 10.5 Appendix 1: Expansion Projects Using MACRS
  • 10.6 Appendix 2: Replacement Projects Using MACRS

    • Chapter 11: Cost of Capital

  • 11.1 Why Compute the Cost of Capital
  • 11.2 After-Tax Cost of Debt
  • 11.3 Cost of Preferred Stock
  • 11.4 Cost of Common Stock
  • 11.5 Computing a Weighted Average Cost of Capital
  • 11.6 Divisional Cost of Capital

    • Chapter 12: Capital Structure

  • 12.1 Measures of Leverage
  • 12.2 The Effects of Leverage
  • 12.3 Capital Structure with No Taxes
  • 12.4 Capital Structure with Taxes
  • 12.5 The Static Trade-Off Theory

    • Chapter 13: Dividends, Repurchases, and Splits

  • 13.1 Distributions
  • 13.2 Dividends
  • 13.3 Stock Repurchases
  • 13.4 Stock Dividends and Splits

    • Chapter 14: Financial Planning and Forecasting

  • 14.1 Sales Forecasting
  • 14.2 Cash Budgeting
  • 14.3 Financial Statements Forecasting
  • 14.4 Additional Funds Needed and Growth

    • Chapter 15: The Management of Working Capital

  • 15.1 The Operating Period and Cash Conversion Cycle
  • 15.2 How to Manage Inventory
  • 15.3 How to Manage Accounts Receivable
  • 15.4 How to Manage Cash
  • 15.5 Short-Term Financing Alternatives

    • Chapter 16: International Finance

  • 16.1 Basics of Exchange Rates
  • 16.2 How Exchange Rates Are Established
  • 16.3 Interest Rate Parity
  • 16.4 International Finance Risk
  • 16.5 Foreign Investments

    • Chapter 17: Corporate Valuation

  • 17.1 Advanced Financial Statements Forecasting
  • 17.2 Free Cash Flow
  • 17.3 Discounted Free Cash Flow Valuation
  • 17.4 Discounted Cash Flow to Equity
  • 17.5 Relative Valuation

    • Chapter 18: Futures and Options

  • 18.1 Forward Contracts
  • 18.2 Futures Contracts
  • 18.3 Hedging with Futures Contracts
  • 18.4 Option Contracts
  • 18.5 Option Payoffs and Profits
  • 18.6 Option Pricing

    • Chapter 19: Mergers and Acquisitions

  • 19.1 The Basic Terminology of Mergers and Acquisitions
  • 19.2 The Economic Gains to Mergers
  • 19.3 Evaluating Acquisitions
  • 19.4 Defense Tactics
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    Instructor’s Manual

    Instructor’s Manual

    The Instructor’s Manual guides you through the main concepts of each chapter and important elements such as learning objectives, key terms, and key takeaways. Can include answers to chapter exercises, group activity suggestions, and discussion questions.

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    PowerPoint Lecture Notes

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    A PowerPoint presentation highlighting key learning objectives and the main concepts for each chapter are available for you to use in your classroom. You can either cut and paste sections or use the presentation as a whole.

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    Other Supplements

    Other Supplements

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    Stan Eakins East Carolina University

    Stanley G. Eakins (PhD Arizona State University) is the former Dean for the College of Business, Associate Dean, Chair of the Department of Finance, and Professor of Finance at East Carolina University (ECU). Prior to beginning his academic work, Stan gained practical experience serving as vice president and comptroller at the First National Bank of Fairbanks and as a commercial and real estate loan officer. A founder of Denali title and escrow agency, a title insurance company in Fairbanks, Alaska, he also ran the operations side of a bank and was the chief finance officer for a multimillion-dollar construction and development company.

     

    William McNally Wilfrid Laurier University

    William J. McNally (PhD University of Toronto) is Professor of Finance at Wilfrid Laurier University. Will taught at the University of Victoria before joining the faculty at Laurier. His primary research interests are in stock repurchases, insider trading, and market microstructure. Will’s research has been published in journals such as Management Science, Financial Management, The Journal of Applied Corporate Finance, The Journal of Banking and Finance, and The Journal of Financial Research. Will is a founder and on-going supervisor of the Laurier Student Investment Fund which was started in 2001. He previously worked as an economic consultant and as a research economist at the Fraser Institute, a Vancouver-based economic think tank.

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