New Features:

• New Coauthor , Bart Danielsen at North Carolina State, helps keep examples and research fresh in this new edition.
• Learning Objectives are listed on the opening page of each chapter as a quick introduction to the material to be learned and to provide students with an indication of key concepts to understand fully before moving to the next chapter. These objectives are also linked to the end-of-chapter problems and test bank questions.
• Updated Topic Coverage:
  • Changes in capital markets. Chapter 1 looks at the major stock exchanges going public and the mergers that are taking place between the exchanges. This topic also receives significant additional coverage in Chapter 14.
  • The impact of technology. Chapters 6, 7, and 8 provide examples of how Hewlett-Packard, Wal-Mart, General Motors and other firms use advanced technology (including the Internet) to manage working capital. Chapter 14 is updated and organized to reflect the effect of Electronic Communication Networks (ECNs) and advanced technology on the way the financial markets operate in the U.S.
  • The ramifications of recent financial headlines. The collapse of the subprime lending market is covered in chapter 8, which discusses the reasons and consequences of the downfall. Chapter 15 considers potential regulatory changes in investment banking necessitated by the demise of Bears Sterns.
  • The power of the time value of money. Chapter 9 now includes an updated feature on the time value of money that indicates what would happen at four percent inflation over 50 years. One example is that tuition would go over one million dollars a year, and other similar numbers are presented.
  • Misuse of accounting data. Chapter 2 provides a lively discussion of the backdating of stock options as an improper tool to enhance the compensation of top management. Other similar good and bad practices by top management are discussed throughout the text and are related to stockholder wealth maximization.
  • The use of debt by major U.S. corporations. In the discussion of the cost of capital in Chapter 11, new debt relief information is provided for major U.S. corporations.
  • Foreign exchange considerations in the capital markets. New relationships between the U.S. dollar and other foreign currencies have taken place since the last edition, and this topic is carefully covered in Chapter 21.

Retained Features:

• Functional Integration: The authors have taken great care to include examples that are not just applicable to finance, but also to the marketing, management and accounting majors, as well as small business finance. Over two-thirds of jobs created in the U.S. economy are from small businesses, so the authors continue to note when specific financial techniques are performed differently by large and small businesses.
• Functional use of four colors enhances the understanding of tables, graphs, and exhibits. The authors explain how color is used pedagogically on the end sheets. Color is an integral part of the presentation of finance topics to assist understanding and retaining the concepts being discussed. For example, red stands for short-term financing in some figures, while blue stands for long-term financing.
• Chapter 2 provides a review of accounting principles, finance terminology and financial statements to help students understand the impact of financial decision-making.
• Company logos updated throughout the text. In this feature, the four-color logos such as McDonald’s, Coco-Cola, IBM, and eBay are included in the margin where a situation involving the company is used. This feature helps to call out our strength in providing many real-world examples for students.
• Comprehensive problems , indicated with a blue side-bar, integrate and require the application of several financial concepts into one problem. Not only are there more within the book, but there are also more comprehensive problems included in chapters 2, 3, and 8 of the instructor’s manual.
• Each new copy of the text includes access to Standard & Poor’s Educational Version of Market Insight, a rich online resource that provides six years of financial data, along with industry trends, stock reports, and much more, for over 1,000 top companies. Relevant chapters contain end of chapter problems that use this data (powered by S&P’s COMPUSTAT® database) to gain a better understanding of practical business situations.
• In-book Acetates on the Time Value of Money help instructors communicate this often challenging subject to students in a clear, step-by-step way. They visually relate future values and present values. These are found in Chapter 9.
• Revised Chapter Opening Vignettes motivate students by bringing in current events to illustrate the material to be learned in the chapter. These updated chapter openers include a list of chapter concepts that provide a quick introduction of the material students will be expected to learn in the chapter.
• News Makers featured in the part openers includeRay Anderson, Dennis Johnson, Anthony Noto, Indra Nooyi, Bob McCann, and Prince Al-Walid. News Makers are featured to highlight influential people in finance or business and their contributions to the field.
• Comprehensive international coverage , using both companies and events, throughout the text.
• Small Business —Since over two-thirds of jobs created in the U.S. economy are from small businesses, we have continued to note when specific financial techniques are performed differently by large and small businesses.
• Internet presence , including helpful Websites listed throughout the text as well as many of the Finance in Action boxes. Web exercises are featured in each chapter and Standard & Poor’s problems are included in relevant chapters to further showcase real-world material.
• Rich end of chapter material includes a summary, review of formulas, list of key terms, discussion questions and problems, Standard & Poor’s problems, comprehensive problems (in select chapters), Web exercises and practice problems with solutions. The authors write all their own questions and problems and solutions, so great care has been taken to make them consistent with the chapter material. There are over 250 questions and 350 problems in this edition to reinforce and test student understanding.