BUILDING INTUITION
Throughout the book important finance principles and concepts are identified and emphasized in Building Intuition boxes. These boxes restate an important finance concept that has been discussed in the main text, such as the importance of cash flows, and provide an intuitive example or explanation of the concept. The Building Intuition boxes and the pages on which they appear are as follows:
| PAGE | |
| Cash Flows Matter Most to Investors | 4 |
| Sound Investments Are Those Where the Value of the Benefits Exceeds Their Cost | 5 |
| Financing Decisions Affect the Value of the Firm | 6 |
| The Timing of Cash Flows Affects Their Value | 13 |
| The Riskiness of Cash Flows Affects Their Value | 13 |
| The Financial Manager's Goal Is to Maximize the Value of the Firm's Stock | 14 |
| The Value of Money Changes with Time | 128 |
| Compounding Drives Much of the Earnings on Long-Term Investments | 134 |
| More Risk Means a Higher Expected Return | 185 |
| Diversified Portfolios Are Less Risky | 206 |
| Systematic Risk Is the Risk That Matters | 207 |
| Investment Decisions Have Opportunity Costs | 288 |
| Capital Budgeting Is Forward Looking | 329 |
| Incremental After-Tax Free Cash Flows Are What Stockholders Care About in Capital Budgeting | 331 |
| We Discount Expected Cash Flows in an NPV Analysis | 349 |
| The Market Value of a Firm's Assets Equals the Market Value of the Claims on Those Assets | 366 |
| A Firm's Cost of Capital Is a Weighted Average of All of Its Financing Costs | 368 |
| The Current Cost of Long-Term Debt Is ... |
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