Fundamentals of Corporate Finance, Second Edition

Organization and Coverage

In order to help students develop the skills necessary to tackle investment and financing decisions, we have arranged the book's 21 chapters into five major building blocks, that collectively comprise the seven parts of the book, as illustrated in the accompanying exhibit and described below.

Introduction

Part 1, which consists of Chapter 1, provides an introduction to corporate finance. It describes the role of the financial manager, the types of fundamental decisions that financial mangers make, alternative forms of business organization, the goal of the firm, agency conflicts and how they arise, and the importance of ethics in financial decision-making. These discussions set the stage and provide a framework that students can use to think about key concepts as the course progresses.

Foundations

Part 2 of the text consists of Chapters 2 through 4. These chapters present the basic institutional, economic, and accounting knowledge and tools that students should understand before they begin the study of financial concepts. Most of the material in these chapters is typically taught in other courses. Since students come to the corporate finance course with varying academic backgrounds, and because the time that has elapsed since students have taken particular prerequisite courses also varies, the chapters in Part 2 can help the instructor ensure that all students have the same base level of knowledge early in the course. Depending on the educational background ...