Fundamentals of Financial Management

For the last 20 years of his career, Dr. Eugene F. Brigham was a graduate research professor emeritus at the University of Florida, where he taught since 1971. He received his MBA 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 wrote many journal articles on the cost of capital, capital structure and other aspects of financial management. He 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 taught, consulted and completed research. He 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 also testified as an expert witness in numerous electric, gas and telephone rate cases at both federal and state levels. Prior to his death in 2024 as this text was being finalized, Dr. Brigham spent his spare time on the golf course, enjoying time with his family and dogs and tackling outdoor adventure activities such as biking through Alaska. Dr. Joel F. Houston is the Eugene F. Brigham Professor of Finance at the University of Florida. He received his M.A. and Ph.D. from the Wharton School at the University of Pennsylvania and his undergraduate degree from Franklin and Marshall College. Prior to his appointment at the University of Florida, Dr. Houston was an economist at the Federal Reserve Bank of Philadelphia. Dr. Houston's research is primarily in the areas of corporate finance and financial institutions. His work has been published in top journals, including The Journal of Finance, Journal of Financial Economics, Journal of Business, Journal of Financial and Quantitative Analysis, Journal of Accounting Research and Financial Management. Dr. Houston also currently serves as an associate editor for the Journal of Financial Services Research and the Journal of Financial Economic Policy. Since arriving at the University of Florida in 1987, Dr. Houston has received more than 25 teaching awards and has been actively involved in both undergraduate and graduate education. In addition to co-authoring leading textbooks in financial management, Dr. Houston has participated in management education programs for the PURC/World Bank Program, Southern Company, Exelon Corporation and Volume Services America. He enjoys playing golf and spending time with his wife, two children and three grandchildren. He is an avid sports fan who follows the Florida Gators as well as the Pittsburgh Steelers, Pirates and Penguins.

• Part 1: Introduction to Financial ManagementChapter 1 An Overview of Financial ManagementChapter 2 Financial Markets and InstitutionsPart 2: Fundamental Concepts in Financial ManagementChapter 3 Financial Statements, Cash Flow, and TaxesChapter 4 Analysis of Financial StatementsWeb Appendix 4A Common Size and Percent Change AnalysisChapter 5 Time Value of MoneyWeb Appendix 5A Continuous Compounding and DiscountingWeb Appendix 5B Growing AnnuitiesPart 3: Financial AssetsChapter 6 Interest RatesChapter 7 Bonds and Their ValuationWeb Appendix 7A Zero Coupon BondsWeb Appendix 7B Bond Risk and DurationWeb Appendix 7C Bankruptcy and ReorganizationChapter 8 Risk and Rates of ReturnWeb Appendix 8A Calculating Beta CoefficientsChapter 9 Stocks and Their ValuationAppendix 9A Stock Market EquilibriumPart 4: Investing in Long-Term Assets: Capital BudgetingChapter 10 The Cost of CapitalWeb Appendix 10A The Cost of New Common Stock and WACCChapter 11 The Basics of Capital BudgetingChapter 12 Cash Flow Estimation and Risk AnalysisWeb Appendix 12A Tax DepreciationWeb Appendix 12B Refunding OperationsWeb Appendix 12C Using the CAPM to Estimate the Risk-Adjusted Cost of CapitalWeb Appendix 12D Techniques for Measuring Beta RiskChapter 13 Real Options and Other Topics in Capital BudgetingPart 5: Capital Structure and Dividend PolicyChapter 14 Capital Structure and LeverageWeb Appendix 14A Degree of LeverageChapter 15 Distributions to Shareholders: Dividends and Share RepurchasesWeb Appendix 15A The Residual Dividend Model: An Example Part 6: Working Capital Management, Financial Forecasting, and Multinational Financial ManagementChapter 16 Working Capital ManagementWeb Appendix 16A Inventory ManagementWeb Appendix 16B Short-Term Loans and Bank FinancingChapter 17 Financial Planning and ForecastingWeb Appendix 17B Forecasting Financial Requirements When Financial Ratios ChangeChapter 18 Multinational Financial ManagementPart 7: Special Topics in Financial ManagementChapter 19 Derivatives and Risk ManagementWeb Appendix 19A Valuation of Put OptionsChapter 20 Hybrid Financing: Preferred Stock, Leasing, Warrants, and ConvertiblesChapter 21 Mergers and AcquisitionsWeb Appendix 21A Merger RegulationWeb Appendix 21B Holding CompaniesAppendix A Solutions to Self-Test Questions and ProblemsAppendix B Answers to Selected End-of-Chapter ProblemsAppendix C Selected Equations and TablesIndex