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For courses in financial management
Using Tools, Making Connections, and Studying for Success in Finance
Financial Management: Core Conceptsis the ideal source material for nonfinance readers seeking to learn the key elements of financial operations. The text focuses on the reader’s ability to understand complex financial concepts by centering its material around three major learning skills: using tools, making connections, and studying for success. Readers are encouraged to start by mastering the major concepts of finance, and then to test their knowledge by forging connections between ideas and applying them to real world situations.
The Third Edition contains the most uptodate information in financial concepts, as well as enhanced and expanded versions of existing subject matter. Financial Management makes the topic of finance interesting and accessible to nonfinance majors by relating it to their own personal expenditures and exploring the importance of this field across all disciplines.
Table of Contents
 Prepare, Apply, and Confirm with MyFinanceLab™
 Financial Management Core Concepts
 Financial Management Core Concepts
 The Pearson Series in Finance
 About the Author
 The Student Front and Center
 From the Author
 Reviewers
 Brief Contents
 Contents

Part One Fundamental Concepts and Basic Tools of Finance

Chapter 1 Financial Management
 Learning Objectives
 1.1 The Cycle of Money
 1.2 Overview of Finance Areas
 1.3 Financial Markets
 1.4 The Finance Manager and Financial Management
 1.5 Objective of the Finance Manager
 1.6 Internal and External Players
 1.7 The Legal Forms of Business
 1.8 The Financial Management Setting: The Agency Model
 1.9 Corporate Governance and Business Ethics
 1.10 Why Study Finance?
 Key Terms
 Questions
 Prepping for Exams
 Chapter 1 Financial Management

Chapter 2 Financial Statements
 Learning Objectives
 2.1 Financial Statements
 2.2 Cash Flow Identity and the Statement of Cash Flows
 2.3 Financial Performance Reporting
 2.4 Financial Statements on the Internet
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 2 Financial Statements

Chapter 3 The Time Value of Money (Part 1)
 Learning Objectives
 3.1 Future Value and Compounding Interest
 3.2 Present Value and Discounting
 3.3 One Equation and Four Variables
 3.4 Applications of the Time Value of Money Equation
 3.5 Doubling of Money: The Rule of 72
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 3 The Time Value of Money (Part 1)

Chapter 4 The Time Value of Money (Part 2)
 Learning Objectives
 4.1 Future Value of Multiple Payment Streams
 4.2 Future Value of an Annuity Stream
 4.3 Present Value of an Annuity
 4.4 Annuity Due and Perpetuity
 4.5 Three Loan Payment Methods
 4.6 Amortization Schedules
 4.7 Waiting Time and Interest Rates for Annuities
 4.8 Solving a Lottery Problem
 4.9 Ten Important Points about the TVM Equation
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Chapter 4 The Time Value of Money (Part 2)

Chapter 5 Interest Rates
 Learning Objectives
 5.1 How Financial Institutions Quote Interest Rates: Annual and Periodic Interest Rates
 5.2 Effect of Compounding Periods on the Time Value of Money Equations
 5.3 Consumer Loans and Amortization Schedules
 5.4 Nominal and Real Interest Rates
 5.5 RiskFree Rate and Premiums
 5.6 Yield Curves
 5.7 A Brief History of Interest Rates and Inflation in the United States
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 5 Interest Rates

Chapter 1 Financial Management

Part Two Valuing Stocks and Bonds and Understanding Risk and Return

Chapter 6 Bonds and Bond Valuation
 Learning Objectives
 6.1 Application of the Time Value of Money Tool: Bond Pricing
 6.2 Semiannual Bonds and ZeroCoupon Bonds
 6.3 Yields and Coupon Rates
 6.4 Bond Ratings
 6.5 Some Bond History and More Bond Features
 6.6 U.S. Government Bonds
 Key Terms
 Questions
 Prepping for Exams

Problems
 Bond prices. For Problems 1 through 4, use the information in the following table.
 Yield to maturity. For Problems 5 through 8, use the information in the following table.
 Treasury notes and bonds. For Problems 19 through 23, use the information in the following table.
 Treasury bills. For Problems 24 through 28, use the information in the following table. A face value of $10,000 is assumed for these Treasury bills.
 Advanced Problems for Spreadsheet Application
 Chapter 6 Bonds and Bond Valuation

Chapter 7 Stocks and Stock Valuation
 Learning Objectives
 7.1 Characteristics of Common Stock
 7.2 Stock Markets
 7.3 Stock Valuation
 7.4 Dividend Model Shortcomings
 7.5 Preferred Stock
 7.6 Efficient Markets
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 7 Stocks and Stock Valuation

Chapter 8 Risk and Return
 Learning Objectives
 8.1 Returns
 8.2 Risk (Certainty and Uncertainty)
 8.3 Historical Returns
 8.4 Variance and Standard Deviation as a Measure of Risk
 8.5 Returns in an Uncertain World (Expectations and Probabilities)
 8.6 The RiskandReturn TradeOff
 8.7 Diversification: Minimizing Risk or Uncertainty
 8.8 Beta: The Measure of Risk in a WellDiversified Portfolio
 8.9 The Capital Asset Pricing Model and the Security Market Line
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 8 Risk and Return

Chapter 6 Bonds and Bond Valuation

Part Three Capital Budgeting
 Chapter 9 Capital Budgeting Decision Models
 Chapter 9 Capital Budgeting Decision Models

Chapter 10 Cash Flow Estimation
 Learning Objectives
 10.1 The Importance of Cash Flow
 10.2 Estimating Cash Flow for Projects: Incremental Cash Flow
 10.3 Capital Spending and Depreciation
 10.4 Cash Flow and the Disposal of Capital Equipment
 10.5 Projected Cash Flow For a New Product
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 10 Cash Flow Estimation

Chapter 11 The Cost of Capital
 Learning Objectives
 11.1 The Cost of Capital: A Starting Point
 11.2 Components of the Weighted Average Cost of Capital Components of the Weighted Average Cost of Capital
 11.3 Weighting the Components: Book Value or Market Value? Weighting the Components: Book Value or Market Value?
 11.4 Using the Weighted Average Cost of Capital in a Budgeting Decision
 11.5 Selecting Appropriate Betas for Projects Selecting Appropriate Betas for Projects
 11.6 Constraints on Borrowing and Selecting Projects for the Portfolio Constraints on Borrowing and Selecting Projects for the Portfolio
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 11 The Cost of Capital

Part Four Financial Planning and Evaluating Performance

Chapter 12 Forecasting and ShortTerm Financial Planning
 Learning Objectives
 12.1 Sources and Uses of Cash
 12.2 Cash Budgeting and the Sales Forecast
 12.3 Cash Outflow from Production
 12.4 The Cash Forecast: ShortTerm Deficits and ShortTerm Surpluses
 12.5 Planning with Pro Forma Financial Statements
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 12 Forecasting and ShortTerm Financial Planning

Chapter 13 Working Capital Management
 Learning Objectives
 13.1 The Cash Conversion Cycle
 13.2 Managing Accounts Receivable and Setting Credit Policy
 13.3 The Float
 13.4 Inventory Management: Carrying Costs and Ordering Costs
 13.5 The Effect of Working Capital on Capital Budgeting
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 13 Working Capital Management
 Chapter 14 Financial Ratios and Firm Performance
 Chapter 14 Financial Ratios and Firm Performance

Chapter 12 Forecasting and ShortTerm Financial Planning

Part Five Other Selected Finance Topics

Chapter 15 Raising Capital
 Learning Objectives
 15.1 The Business Life Cycle
 15.2 Borrowing for a StartUp and Growing Business
 15.3 Borrowing for a Stable and Mature Business: Bank Loans
 15.4 Borrowing for a Stable and Mature Business: Selling Bonds
 15.5 Borrowing For a Stable and Mature Business: Selling Stock
 15.6 Other Borrowing Options for a Mature Business
 15.7 The Final Phase: Closing the Business
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 15 Raising Capital

Chapter 16 Capital Structure
 Learning Objectives
 16.1 Capital Markets: A Quick Review
 16.2 Benefits of Debt
 16.3 BreakEven Earnings for Different Capital Structures
 16.4 Pecking Order
 16.5 Modigliani and Miller on Optimal Capital Structure
 16.6 The Static Theory of Capital Structure
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 16 Capital Structure

Chapter 17 Dividends, Dividend Policy, and Stock Splits
 Learning Objectives
 17.1 Cash Dividends
 17.2 Dividend Policy
 17.3 Selecting a Dividend Policy
 17.4 Stock Dividends, Stock Splits, and Reverse Splits
 17.5 Specialized Dividend Plans
 Key Terms
 Questions
 Prepping for Exams
 Problems
 Advanced Problems for Spreadsheet Application
 Chapter 17 Dividends, Dividend Policy, and Stock Splits
 Chapter 18 International Financial Management
 Chapter 18 International Financial Management
 Key Formulas and Spreadsheet Functions

Chapter 15 Raising Capital
 Appendix 1 Future Value Interest Factors
 Appendix 2 Present Value Interest Factors
 Appendix 3 Future Value Interest Factors of an Annuity
 Appendix 4 Present Value Interest Factors of an Annuity
 Appendix 5 Answers to Prepping for Exam Questions
 Glossary
 Index
 Credits
Product Information
 Title: Financial Management: Core Concepts, Third Edition
 Author(s):
 Release date: January 2015
 Publisher(s): Pearson
 ISBN: 9780133866698