Financial Management,
16th Edition

PART 1 THE COMPANY AND ITS ENVIRONMENT
CHAPTER 1 An Overview of Financial Management and the Financial Environment
Web Extension 1A: An Overview of Derivatives
CHAPTER 2 Financial Statements, Cash Flow, and Taxes
Web Extension 2A: The Federal Income Tax System for Individuals
CHAPTER 3 Analysis of Financial Statements
PART 2 FIXED INCOME SECURITIES
CHAPTER 4 Time Value of Money
Web Extension 4A: Derivation of Annuity Formulas
Web Extension 4B: Continuous Compounding
CHAPTER 5 Bond, Bond Valuation, and Interest Rates
Web Extension 5A: A Closer Look at Zero Coupon and Other OID Bonds
Web Extension 5B: A Closer Look at TIPS: Treasury Inflation-Protected Securities
Web Extension 5C: A Closer Look at Bond Risk: Duration
Web Extension 5D: The Pure Expectations Theory and Estimation of Forward Rates
PART 3 STOCKS AND OPTIONS
CHAPTER 6 Risk and Return
Web Extension 6A: Continuous Probability Distributions
Web Extension 6B: Estimating Beta with a Financial Calculator
CHAPTER 7 Corporate Valuation and Stock Valuation
Web Extension 7A: Derivation of Valuation Equations
CHAPTER 8 Financial Options and Applications in Corporate Finance
PART 4 PROJECTS AND THEIR VALUATION
CHAPTER 9 The Cost of Capital
Web Extension 9A: The Cost of Equity in the Nonconstant Dividend Growth Model with Repurchases
CHAPTER 10 The Basics of Capital Budgeting: Evaluating Cash Flows
Web Extension 10A: The Accounting Rate of Return (ARR)
CHAPTER 11 Cash Flow Estimation and Risk Analysis
Web Extension 11A: Certainty Equivalents and Risk- Adjusted Discount Rates
PART 5 CORPORATE VALUATION AND GOVERNANCE
CHAPTER 12 Corporate Valuation and Financial Planning
CHAPTER 13 Corporate Governance
PART 6 CASH DISTRIBUTIONS AND CAPITAL STRUCTURE
CHAPTER 14 Distributions to Shareholders: Dividends and Repurchases
CHAPTER 15 Capital Structure Decisions
Web Extension 15A: Degree of Leverage
Web Extension 15B: Capital Structure Theory: Arbitrage Proofs of the Modigliani-Miller Theorems
PART 7 MANAGING GLOBAL OPERATIONS
CHAPTER 16 Supply Chains and Working Capital Management
Web Extension 16A: Secured Short-Term Financing
CHAPTER 17 Multinational Financial Management
PART 8 TACTICAL FINANCING DECISIONS
CHAPTER 18 Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks
Web Extension 18A: Rights Offerings
CHAPTER 19 Lease Financing
Web Extension 19A: Leasing Feedback
Web Extension 19B: Percentage Cost Analysis
Web Extension 19C: Leveraged Leases
CHAPTER 20 Hybrid Financing: Preferred Stock, Warrants, and Convertibles
Web Extension 20A: Calling Convertible Issues
PART 9 STRATEGIC FINANCE IN A DYNAMIC ENVIRONMENT
CHAPTER 21 Dynamic Capital Structures and Corporate Valuation
Web Extension 21A: Projecting Consistent Debt and Interest Expenses
CHAPTER 22 Mergers and Corporate Control
CHAPTER 23 Enterprise Risk Management
CHAPTER 24 Bankruptcy, Reorganization, and Liquidation
Web Extension 24A: Multiple Discriminant Analysis
PART 10 SPECIAL TOPICS
CHAPTER 25 Portfolio Theory and Asset Pricing Models
CHAPTER 26 Real Options 1
Web Extension 26A: The Abandonment Real Option
Web Extension 26B: Risk-Neutral Valuation
APPENDIXES
APPENDIX A Solutions to Self-Test Problems
APPENDIX B Answers to End-of-Chapter Problems
APPENDIX C Selected Equations
GLOSSARY AND INDEXES
Glossary
Name Index
Subject Index
WEB CHAPTERS:
CHAPTER 27 Providing and Obtaining Credit
CHAPTER 28 Advanced Issues in Cash Management and Inventory Control
CHAPTER 29 Pension Plan Management
CHAPTER 30 Financial Management in Not-for-Profit Businesses

• Eugene F. Brigham

  Dr. Eugene F. Brigham is graduate research professor emeritus at the University of Florida, where he has taught since 1971. He received his M.B.A. and Ph.D. from the University of California-Berkeley and his undergraduate degree from the University of North Carolina. Prior to joining the University of Florida, Dr. Brigham held teaching positions at the University of Connecticut, the University of Wisconsin and the University of California-Los Angeles. A former president of the Financial Management Association, he has written many journal articles on the cost of capital, capital structure and other aspects of financial management. He has authored or co-authored 10 textbooks on managerial finance and managerial economics that are used at more than 1,000 universities in the United States and have been translated into 11 languages worldwide. In addition to his academic writing, Dr. Brigham continues to teach, consult and complete research. He has served as a consultant to many corporations and government agencies, including the Federal Reserve Board, the Federal Home Loan Bank Board, the U.S. Office of Telecommunications Policy and the RAND Corp. He has also testified as an expert witness in numerous electric, gas and telephone rate cases at both federal and state levels. Dr. Brigham spends his spare time on the golf course, enjoying time with his family and dogs and tackling outdoor adventure activities, such as biking through Alaska.

• Michael C. Ehrhardt

  Dr. Michael C. Ehrhardt is a Professor Emeritus and current faculty member in two Executive MBA programs at the University of Tennessee. He received a B.S. in Civil Engineering and a B.A. in Economics at Swarthmore College. After working several years as an engineer, he earned his M.S. in Operations Research and Ph.D. in Finance from the Georgia Institute of Technology. Dr. Ehrhardt has taught extensively at the undergraduate, master's and doctoral levels in the areas of investments, corporate finance and capital markets. He has directed and served on numerous dissertation committees. Dr. Ehrhardt teaches in executive education programs and consults in the areas of corporate valuation, value-based compensation plans, financial aspects of supply chain management and the cost of capital. His honors include the Allen G. Keally Outstanding Teacher Award, the Tennessee Organization of MBA Students Outstanding Faculty Award, the College of Business Administration Research & Teaching Award and the John B. Ross Outstanding Teaching Award in the College of Business. An author and co-author of several books addressing various areas of finance, Dr. Ehrhardt focuses much of his research on corporate valuation and asset pricing models, including pricing models for interest-rate sensitive instruments. His work has been published in numerous journals, including THE JOURNAL OF FINANCE, JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS, FINANCIAL MANAGEMENT, THE FINANCIAL REVIEW, THE JOURNAL OF FINANCIAL RESEARCH and THE JOURNAL OF BANKING AND FINANCE.

• THE 2017 TAX CUT AND JOBS ACT (TCJA) IS FULLY INTEGRATED. The 16th edition of FINANCIAL MANAGEMENT: THEORY & PRACTICE incorporates the TCJA into the text, end-of-chapter material and test bank. In addition to different tax rates, the text identifies many of the TCJA’s likely consequences, such as increases in earnings volatility and decreases in the use of financial leverage.

• END-OF-CHAPTER PROBLEMS ARE HOMEWORK READY. Thoroughly revised end-of-chapter problems have been improved for better use in algorithmic homework assignments.

• ALL-NEW DESIGN TRULY ENGAGES READERS. Now more accessible and student friendly than ever, the 16th edition has been revised, revamped and refreshed with a new, easier-to-read interior design.

• CLEAR AND CONCISE WRITING IMPROVES STUDENT COMPREHENSION. Accessible, easy-to-understand writing helps students maximize their study time and quickly grasp concepts and tools on their own--freeing up valuable time for instructors.

• RELEVANT EXAMPLES REFLECT TODAY’S GLOBAL ECONOMIC ENVIRONMENT. Updated, timely, real-world examples throughout connect chapter concepts with events that resonate with students.

• CORPORATE GOVERNANCE COVERAGE IS INTEGRATED THROUGHOUT. Reflecting the latest headlines, up-to-date coverage is packed with real-world illustrations and gives students in-depth insight into this key topic.

• EXCEL TOOL KITS ENSURE STUDENT SPREADSHEET PROFICIENCY. Actual screen captures from Excel Tool Kit models help students to clearly and more closely follow the models in analysis.

• END-OF-CHAPTER SPREADSHEET PROBLEMS GUIDE STUDENTS THROUGH BUILDING A MODEL. Partially completed end-of-chapter spreadsheets contain financial data and instructions on how to "build a model." This structure guides students step-by-step through the problem--minimizing unnecessary typing and data entry. It also makes it easy for instructors to grade the work because all student answers appear in the same location on the spreadsheet.

• TEST BANK MATERIAL IS TAGGED TO TIER I AND TIER II STANDARDS TO HELP MAXIMIZE YOUR COURSE SUCCESS. Ensuring students are well-prepared for real-world practice, all Test Bank content is now tagged according to Tier I (Business Program Interdisciplinary Learning Outcomes) and Tier II (Finance-specific) standards, topic, Bloom’s Taxonomy and difficulty level to track course or institution learning outcomes.

• FLEXIBLE COVERAGE MAKES THE TEXT IDEAL FOR ONE-SEMESTER OR TWO-SEMESTER COURSES. Organized to address key concepts and essential topics within the first 17 chapters, the text ensures your students receive the coverage they need whether you teach a one-semester or two-semester course. Building on a solid foundation, later chapters provide more advanced and expanded treatment of material--increasing student mastery of concepts.

• UNMATCHED AUTHOR EXPERTISE ENSURES CLEAR, CONTEMPORARY APPROACH. This unrivaled authorship team combines the extensive teaching background and more than 30 years of text writing experience of Dr. Gene Brigham with the contemporary scholarship and practical, professional expertise of Dr. Mike Ehrhardt. Together, these authors deliver a consistent, accurate and innovative approach that will keep your students "First in Finance."

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