Financial Management: Theory & Practice, 12th Edition

  • includes Thomson ONE - Business School Edition 1-Year Printed Access Card
  • Eugene F. Brigham University of Florida
  • Michael C. Ehrhardt University of Tennessee
  • ISBN-10: 0324422695
  • ISBN-13: 9780324422696
  • 1104 Pages Hardcover 
  • Previous Editions: 2005
  • © 2008 | Published
  • College Bookstore Wholesale Price = $215.50 
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About The Solution

Overview

An understanding of finance theory is absolutely essential if students are to develop and implement effective financial strategies. Similarly, students simply must have a working knowledge of the financial environment. FINANCIAL MANAGEMENT: THEORY AND PRACTICE remains the only text in the market that presents a balance of financial theory and applications. Authors Brigham and Ehrhardt maintain the same four goals that have made their text a course favorite through each edition: helping learners to make good financial decisions, providing a solid text for the introductory MBA course, motivating learners by demonstrating finance is relevant and interesting, and presenting the material clearly. Plus, with access to CengageNOW for Finance as well as Thomson ONE-Business School Edition, FINANCIAL MANAGEMENT: THEORY AND PRACTICE offers the most comprehensive teaching and learning solution you will find.


Additional Product Information

Features/Benefits

  • Unmatched Author Expertise. FINANCIAL MANAGEMENT: THEORY AND PRACTICE combines the textbook writing experience of Gene Brigham (30 years) with the contemporary scholarship of Mike Ehrhardt.
  • Practical Application of Theory and Trends. Application of concepts and theories is illustrated through tried and true pedagogy, real-world examples, problem sets, and integrated mini-cases. A comprehensive "Mini Case" ends each chapter; solutions are available to instructors on the Instructor website.
  • Multi-disciplinary Approach. The authors' use of varied subjects helps to explain how all areas of business affect and are affected by corporate finance.
  • Early Coverage of Financial Statements. This helps students see what financial management is all about, and how the effects of particular financial decisions are transmitted to various parts of the firm. Plus, early exposure to risk analysis, discounted cash flow techniques, valuation procedures, and EVA/MVA allows the authors to use and reinforce these key concepts throughout the book.
  • Excel Tool Kits. The authors created Excel Tool Kits to enhance student proficiency with spreadsheets. Created for each chapter, these Tool Kit models include explanations and screen shots that show students how to use many of the features and functions of Excel. Available on the book's website.
  • Web Safaris. Beginning with a description of the data needed to solve a problem, "Web Safaris" contain hyperlinks to the appropriate web site, along with a series of screen shots that take the user step-by-step through the site to the desired data. Each Web Safari has a specific goal, such as finding the current spreads between Treasury bonds and risky bonds with different ratings.
  • End-of-Chapter Spreadsheet Problems. "Build a Model" problems have students start with a partially completed spreadsheet that contains financial data plus instructions for solving a particular problem (the partial spreadsheets are available on the book's website). "What If Analysis" problems have students start with a spreadsheet containing data, instructions, and a completed model, plus a series of questions that asks them to change certain inputs and to observe changes in the key outputs. Plus, Spreadsheet Models.
  • Spreadsheet Models. Each chapter (except Ch. 1) is accompanied by spreadsheet models that facilitate student problem solving and comprehension.
  • Thomson ONE Problem Sets. The book's website has a set of problems that require accessing the Thomson ONE -- Business School Edition web data. Using these real-world data, students are able to develop real-world skills. Access to Thomson ONE -- Business School Edition is included with new copies of the text.
  • Cyberproblems. Chapter-ending "Cyberproblems" direct students to the book's companion site, where they are directed to specific websites and then asked to answer a series of questions regarding their explorations.
  • Corporate Valuation Boxes. A corporate valuation box is found early in most chapters, extending the authors' emphasis on cash flows and valuation. These boxes explicitly show how a chapter's material is related to corporate valuation so that students can keep the big picture in mind even as they focus on a chapter's specific topics.
  • Corporate Ethics. Students will find a discussion of ethical abuses in Chapter 1 and elsewhere throughout the book. In addition, Chapter 15, "Corporate Valuation, Value-Based Management, and Corporate Governance," specifically addresses corporate governance and the actions both firms and governmental units can take to minimize such events in the future.

What's New

  • New chapter organization. The chapter on financial statement analysis is moved up as are the two chapters on risk, which now fall immediately prior to the stock valuation chapter, since risk and stock return are closely linked.
  • CengageNOW for Finance. Designed by the instructor for the instructor, CengageNOW for Finance is the most reliable, flexible, and easy-to-use online suite of services and resources. CengageNOW for Finance supports your course goals and saves you significant preparation and grading time with such features an algorithmic homework management system, an intuitive grade book, and seamless integration with your favorite course management platform. And for students, CengageNOW for Finance enhances their learning with author video clips, access to Thomson ONE -- Business School Edition, personalized learning paths, and more. With CengageNOW for Finance, students can continually try problems and work them until they understand the concept. Take a tour at academic.cengage.com/cengagenow.
  • Revised Test Bank. All questions have been substantially revised and new questions have been added. The majority of the questions can be algorithmically modified to create an almost infinite number of alternate versions in CengageNOW.
  • Self-test problems are now added at the ends of sections. Answers are given with the problem, and worked-out solutions are found in the chapter's Excel Tool Kit.
  • Increased integration of the Excel Tool Kit. Many figures and tables in the textbook are drawn right from the Excel model, including the Excel row and column headings so students can see exactly how the problem is worked in Excel. In addition, each section number in the chapter corresponds to the same section number in the Excel Tool Kit.
  • End-of-chapter problems reorganized. The end-of-chapter problems are now organized by difficulty, going from easy to challenging. This edition also includes new problems. End-of-chapter problems are also available on CengageNOW.
  • Web Extensions. Each Web Extension is now focused on a single topic, so instructors can assign just that additional topic if they so choose.

Table of Contents

Part One: FUNDAMENTAL CONCEPTS OF FINANCIAL MANAGEMENT.
1. An Overview of Financial Management and the Financial Environment.
Web Extension 1A: A Closer Look at Markets: Securitization and Social Welfare.
Web Extension 1B: An Overview of Derivatives.
Web Extension 1C: A Closer Look at the Stock Markets.
2. Time Value of Money.
Web Extension 2A: Continuous Compounding.
Web Extension 2B: The Tabular Approach.
3. Financial Statements, Cash Flow, and Taxes.
Web Extension 3A: The Federal Income Tax System for Individuals.
4. Analysis of Financial Statements.
Part Two: SECURITIES AND THEIR VALUATION.
5. Bonds, Bond Valuation, and Interest Rates.
Web Extension 5A: A Closer Look at Zero Coupon Bonds.
Web Extension 5B: A Closer Look at TIPS: Treasury Inflation-Protected Securities.
Web Extension 5C: A Closer Look at Bankruptcy and Reorganization.
Web Extension 5D: A Closer Look at Bond Risk: Duration.
Web Extension 5E: The Pure Expectations Theory and Estimation of Forward Rates.
6. Risk, Return, and the Capital Asset Pricing Model.
Web Extension 6A: Continuous Probability Distributions.
Web Extension 6B: Estimating Beta with a Financial Calculator.
7. Portfolio Theory and Other Asset Pricing Models.
8. Stocks, Stock Valuation, and Stock Market Equilibrium.
Web Extension 8A: Derivation of Valuation Equations.
9. Financial Options and Applications in Corporate Finance.
Web Extension 9A: The Binomial Approach.
Part Three: PROJECTS AND THEIR VALUATION.
10. The Cost of Capital.
Web Extension 10A: The Divisional Cost of Capital.
Web Extension 10B: Estimating Growth Rates.
Web Extension 10C: The Cost of Equity in the Nonconstant Dividend Growth Model.
Web Extension 10D: New Equity Issues and the Marginal WACC.
11. The Basics of Capital Budgeting: Evaluating Cash Flows.
Web Extension 11A: The Accounting Rate of Return (ARR).
12. Cash Flow Estimation and Risk Analysis.
Web Extension 12A: Replacement Project Analysis.
Web Extension 12B: The Risk-Adjusted Project Cost of Capital.
13. Decision Trees, Real Options, and Other Capital Budgeting Topics.
Web Extension 13A: The Abandonment Real Option.
Web Extension 13B: Risk-Neutral Valuation.
Part Four: CORPORATE VALUATION AND GOVERNANCE.
14. Financial Planning and Forecasting Financial Statements.
Web Extension 14A: Financing Feedbacks.
Web Extension 14B: Advanced Techniques for Forecasting Financial Statement Accounts.
15. Corporate Valuation, Value-Based Management, and Corporate Governance.
Part Five: STRATEGIC FINANCING.
16. Capital Structure Decisions: The Basics.
Web Extension 16A: Degree of Leverage.
17. Capital Structure Decisions: Extensions.
18. Distributions to Shareholders: Dividends and Repurchases.
Part Six: TACTICAL FINANCIAL DECISION.
19. Initial Public Offerings, Investment Banking, and Financial Restructuring.
Web Extension 19A: Rights Offerings.
20. Lease Financing.
Web Extension 20A: Percentage Cost Analysis.
Web Extension 20B: Leasing Feedback.
Web Extension 20C: Leveraged Leases.
21. Hybrid Financing: Preferred Stock, Warrants, and Convertibles.
Web Extension 21A: Calling Convertible Issues.
Part Seven: SPECIAL TOPICS.
22. Working Capital Management.
Web Extension 22A: Secured Short-Term Financing.
23. Derivatives and Risk Management.
Web Extension 23A: Risk Management with Insurance.
Web Extension 23B: Bond Portfolio Immunization.
24. Bankruptcy, Reorganization, and Liquidation.
Web Extension 24A: Multiple Discriminant Analysis.
25. Mergers, LBOs, Divestitures, and Holding Companies.
Web Extension 25A: Comparison of Alternative Valuation Models.
26. Multinational Financial Management.
WEB CHAPTERS.
27. Providing and Obtaining Credit.
28. Advanced Issues in Cash Management and Inventory Control.
29. Pension Plan Management.
30. Financial Management in Not-for-Profit Businesses.

Supplements

Instructor Supplements

Instructor Supplements

All supplements have been updated in coordination with the main title. Select the main title’s "About the Solution" tab, then select "What's New" for updates specific to title's edition. For more information about these supplements, or to obtain them, contact your Learning Consultant.

CengageNOW 2-Semester Instant Access Code  (ISBN-10: 0324649525 | ISBN-13: 9780324649529)

CengageNOW is an easy-to-use online resource that helps you study in less time to get the grade you want.

List Price = $115.00  | CengageBrain Price = $115.00  | College Bookstore Wholesale Price = $115.00

Watch Demo  |  Try It Out  |  Learn More


Study Guide  (ISBN-10: 0324649096 | ISBN-13: 9780324649093)

List Price = $69.95  | College Bookstore Wholesale Price = $52.00


Solutions Manual  (ISBN-10: 032464910X | ISBN-13: 9780324649109)

This comprehensive manual contains solutions to all end-of-chapter materials. It is available in print form and electronic form on the book's website under Instructor's Resources.


CengageNOW on WebCT™ Instant Access Code  (ISBN-10: 0324649541 | ISBN-13: 9780324649543)

CengageNOW is an easy-to-use online resource that helps you study in less time to get the grade you want.

List Price = $115.00  | CengageBrain Price = $115.00  | College Bookstore Wholesale Price = $115.00


Test Bank  (ISBN-10: 0324649118 | ISBN-13: 9780324649116)

The Test Bank contains more than 1,200 class-tested questions and problems. Information regarding the topic and degree of difficulty, along with the complete solution for all numerical problems, is provided with each question.


Instructor's Resource CD-ROM  (ISBN-10: 0324649126 | ISBN-13: 9780324649123)

This CD includes Word files for the Solutions Manual and the Test Bank, along with completed Excel models for the "Build a Model" problems. This material is also available on the Instructor's portion of the website.


Technology Supplement  (ISBN-10: 0030233720 | ISBN-13: 9780030233722)

This print ancillary contains tutorials for five commonly used financial calculators and for Microsoft Excel, Lotus 1-2-3, and PowerPoint. The calculator tutorials cover everything a student needs to know about calculators to work the problems in the text. The spreadsheet tutorials teach students the basics plus some advanced spreadsheet features, and they prepare students to work with the specific finance models provided in the Tool Kits and Mini Case models. Finally, the PowerPoint tutorial is useful to students who must make presentations or to instructors who want to make slides for use in their lectures.

List Price = $33.95  | CengageBrain Price = $33.49  | College Bookstore Wholesale Price = $25.25


CengageNOW on Blackboard® Instant Access Code  (ISBN-10: 0324649576 | ISBN-13: 9780324649574)

CengageNOW is an easy-to-use online resource that helps you study in less time to get the grade you want.

List Price = $115.00  | CengageBrain Price = $115.00  | College Bookstore Wholesale Price = $115.00


Student Supplements

Student Supplements

All supplements have been updated in coordination with the main title. Select the main title’s "About the Solution" tab, then select "What's New" for updates specific to title's edition. For more information about these supplements, or to obtain them, contact your Learning Consultant.

Financial Management: Theory & Practice (Book Only)  (ISBN-10: 0324652178 | ISBN-13: 9780324652178)

List Price = $332.95  | College Bookstore Wholesale Price = $246.50


CengageNOW 2-Semester Instant Access Code  (ISBN-10: 0324649525 | ISBN-13: 9780324649529)

CengageNOW is an easy-to-use online resource that helps you study in less time to get the grade you want.

List Price = $115.00  | CengageBrain Price = $115.00  | College Bookstore Wholesale Price = $115.00

Watch Demo  |  Try It Out  |  Learn More


Study Guide  (ISBN-10: 0324649096 | ISBN-13: 9780324649093)

List Price = $69.95  | College Bookstore Wholesale Price = $52.00


CengageNOW on WebCT™ Instant Access Code  (ISBN-10: 0324649541 | ISBN-13: 9780324649543)

CengageNOW is an easy-to-use online resource that helps you study in less time to get the grade you want.

List Price = $115.00  | CengageBrain Price = $115.00  | College Bookstore Wholesale Price = $115.00


Technology Supplement  (ISBN-10: 0030233720 | ISBN-13: 9780030233722)

Easy-to-understand tutorials for the five most commonly used financial calculators--and for Microsoft Excel, Lotus 1-2-3, and PowerPoint! The calculator tutorials cover everything you need to know about calculators to work the problems in the text. The spreadsheet tutorials teach you the basics plus some advanced spreadsheet features. Finally, the PowerPoint tutorial is useful if you need to make a presentation.

List Price = $33.95  | CengageBrain Price = $33.49  | College Bookstore Wholesale Price = $25.25


CengageNOW on Blackboard® Instant Access Code  (ISBN-10: 0324649576 | ISBN-13: 9780324649574)

CengageNOW is an easy-to-use online resource that helps you study in less time to get the grade you want.

List Price = $115.00  | CengageBrain Price = $115.00  | College Bookstore Wholesale Price = $115.00


Meet the Author

About the Author

Eugene F. Brigham

Dr. Eugene F. Brigham is Graduate Research Professor Emeritus at the University of Florida, where he has taught since 1971. Dr. Brigham 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. Dr. Brigham has served as president of the Financial Management Association and has written many journal articles on the cost of capital, capital structure, and other aspects of financial management. He has authored or co-authored ten 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. He has testified as an expert witness in numerous electric, gas, and telephone rate cases at both federal and state levels. 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 Corporation. Dr. Brigham continues to teach, consult, and complete research in addition to his academic writing. He 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 in the Finance Department and is the Paul and Beverly Castagna Professor of Investments. He completed his undergraduate work in Civil Engineering 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, masters, and doctoral levels in the areas of investments, corporate finance, and capital markets. He has directed and served on numerous dissertation committees and is a member of the team that developed and delivered the integrative first year of the MBA program. 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. He has been awarded the Allen G. Keally Outstanding Teacher Award, the Tennessee Organization of MBA Students Outstanding Faculty member, the College of Business Administration Research & Teaching Award, and the John B. Ross Outstanding Teaching Award in the College of Business. Much of his research focuses 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. He has also authored or co-authored several books addressing various areas of finance.

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