New Features:

• The Seventh Edition includes a greater emphasis on the Internet, with web addresses provided for real world applications of the related topics. The web addresses appear after "Further Readings" in the end of chapter materials, and also appear within chapter footnotes. Some end of chapter problems will feature web applications, and the address is provided in a different color.

• Substantially Revised content on Options in Part VI - coverage of options, especially real options, has been expanded and restructured. A non-technical introduction to real options appears in Chapter 10 (A Product is Not a Black Box); Chapter 20 (Understanding Options) describes how options work, and what determines their values. Chapter 21 (Valuing Options) covers option valuation methods. Chapter 22 (Real Options) covers real options in detail, with may additional examples to help students understand this concept thoroughly.

• S&P Market Insight Problems are included in end of chapter questions. These problems require the use of the Educational Version of Market Insight, taking advantage of Standard & Poor's powerful and well-known Compustat^® database. These problems provide instructors with an easy, online way to incorporate current, real-world data into the classroom. Access to this rich online resource is FREE with every new copy of the book.

• In response to instructor requests, even more global coverage is integrated throughout the chapters. For example, Chapter 3 includes examples of different countries' interest rates; Chapter 7 includes a discussion of how diversification acts internationally; Chapter 14 provides international comparisons and why debts vary. For convenience, a new Global Index has been created for faculty interested in finding global content and examples.

• Every chapter has been reviewed and revised to make this text the clearest and most up to date text available. For example, Chapter 7 (Introduction to Risk, Return, and the Opportunity Cost of Capital) includes new evidence on the market risk premium; Chapter 12, Where Positive Net Present Values Come From, includes expanded coverage of EVA (Economic Value Added). Chapter 13 (Financing Decisions and Market Efficiency) includes updated information on the volatile 2000/2001 market activity, as well as more information on behavioral finance and its effects on market movement; Chapter 15 (How Corporations Issue Securities) includes coverage of changing issue methods, such as book building, and recent IPO controversies; Chapters 25 & 26 (The Many Different Kinds of Debt and Leasing) includes information on new security types, such as weather derivatives and bonds; Chapter 33 (Mergers) covers changes in merger accounting; Chapter 34 (Control, Governance, and Financial Architecture) details changes in corporate governance in Europe and Japan.

• Chapter 14 (An Overview of Corporate Financing) is now a self-standing introduction to corporate financing, including sources of funds, major types of debt and equity securities, and markets and financial institutions.

• Chapter 24 (Valuing Debt) has been streamlined and simplified. This material is especially important for practicing financial managers.

• The chapters on working capital and short-term financial management have been rearranged; emphasis is on essential institutional information and the most important short-term financial decisions.

• There is an additional minicase on capital budgeting in Chapter 5. All minicases have new specific questions that follow each case. The minicases are a popular feature that help students apply theory to real-world situations.