Fundamentals of Financial Management

Dr. Eugene F. Brigham is a 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. 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 I: INTRODUCTION TO FINANCIAL MANAGEMENT.1. An Overview of Financial Management.2. Financial Markets and Institutions.Part II: FUNDAMENTAL CONCEPTS IN FINANCIAL MANAGEMENT.3. Financial Statements, Cash Flow, and Taxes.4. Analysis of Financial Statements.Web Appendix 4A: Common Size and Percent Change Analyses.5. Time Value of Money.Web Appendix 5A: Continuous Compounding and Discounting.Web Appendix 5B: Growing Annuities.Part III: FINANCIAL ASSETS.6. Interest Rates.7. Bonds and Their Valuation.Web Appendix 7A: Zero Coupon Bonds.Web Appendix 7B: Bond Risk and Duration.Web Appendix 7C: Bankruptcy and Reorganization.8. Risk and Rates of Return.Web Appendix 8A: Calculating Beta Coefficients.9. Stocks and Their Valuation.Appendix 9A: Stock Market Equilibrium.Part IV: INVESTING IN LONG-TERM ASSETS: CAPITAL BUDGETING.10. The Cost of Capital.Web Appendix 10A: The Cost of New Common Stock and WACC.11. The Basics of Capital Budgeting.12. Cash Flow Estimation and Risk Analysis.Appendix 12A: Tax Depreciation.Web Appendix 12B: Refunding Operations.Web Appendix 12C: Using the CAPM to Estimate the Risk-Adjusted Cost of Capital.Web Appendix 12D: Techniques for Measuring Beta Risk.13. Real Options and Other Topics in Capital Budgeting.Part V: CAPITAL STRUCTURE AND DIVIDEND POLICY.14. Capital Structure and Leverage.Web Appendix 14A: Degree of Leverage.15. Distributions to Shareholders: Dividends and Share Repurchases.Web Appendix 15A: An Example: The Residual Dividend Model.Part VI: WORKING CAPITAL MANAGEMENT, FORECASTING, AND MULTINATIONAL FINANCIAL MANAGEMENT.16. Working Capital Management.Web Appendix 16A: Inventory Management.Web Appendix 16B: Short-Term Loans and Bank Financing.17. Financial Planning and Forecasting.Web Appendix 17A: Forecasting Financial Requirements When Financial Ratios Change.Part VII: SPECIAL TOPICS IN FINANCIAL MANAGEMENT.18. Derivatives and Risk Management.Appendix 18A: Valuation of Put Options.19. Multinational Financial Management.20. Hybrid Financing: Preferred Stock, Leasing, Warrants, and Convertibles.21. Mergers and Acquisitions.Web Appendix 21A: Merger Regulation.Web Appendix 21B: Holding Companies.Appendix A: Solutions to Self-Test Questions and Problems.Appendix B: Answers to Selected End-of-Chapter Problems.Appendix C: Selected Equations and Tables.