Fundamentals of Corporate Finance, 2nd Edition

ISBN: 9780730305422

The finance discipline requires much more than just mathematical ability. In Fundamentals of Corporate Finance, 2nd Edition you are encouraged to develop the intuition and analytical skills to effectively apply financial tools in real-world situations. Designed around a unique and integrated framework, this text will enhance your problem solving and decision-making skills.


Fundamentals of Corporate Finance, 2nd Edition comes with iStudy, which features videos and interactive modules that allow you to test your knowledge and enhance your understanding of the course content. iStudy is available on a range of operating systems which means you can use it anytime, anywhere.


  • Australian and New Zealand companies introduce the chapters and provide a real world context for financial concepts in the chapter. Some of the companies profiled are Wesfarmers, Restaurant Brands New Zealand, Patties Foods, Qantas, Harvey Norman, Myer, and BHP Billiton.
  • Key point boxes provide a statement of an important finance concept along with an intuitive example or explanation to help you understand the concept.
  • Demonstration problems contain standard quantitative problems with step-by-step solutions to help you better understand how to apply your intuition and analytical skills to solve important problems.
Robert Parrino is the Lamar Savings Centennial Professor of Finance in the McCombs School of Business, University of Texas at Austin. He is the Associate Editor of the Journal of Corporate Finance and the Journal of Financial Research. He has experience in the application of corporate finance concepts in a variety of business situations and researches on corporate governance, financial policies and more.

David S. Kidwell is the Professor of Finance and Dean Emeritus at the Curtis L. Carlson School of Management, University of Minnesota. He has over 30 years’ experience in financial education, as a teacher, researcher and administrator. He has published in leading journals, including the Journal of Finance and the Journal of Financial and Quantitative Analysis.

Dr Hue Hwa Au Yong a Senior Lecturer in the Department of Accounting and Finance at Monash University. Prior to this, she completed her PhD in the area of risk management at Monash University. Her research has been published in several international peer reviewed journals, including Journal of International Financial Markets, Institutions and Money, and the Australian Journal of Management.

Michael Dempsey is a Professor of Finance in the Department of Economics, Finance and Marketing at RMIT University. Prior to this he was with Monash University and Griffith University, having previously taught at Leeds University, United Kingdom. His teaching responsibilities have been in corporate and investment finance, international finance, derivatives and financial engineering.

Samson Ekanayake is a Senior Lecturer in finance at Deakin University. He has been teaching business and corporate finance at Deakin since 1992 and also served as the Discipline Leader for Finance until July 2010.

Jennifer Kofoed is a Lecturer in the School of Business and Law at Central Queensland University. She has over twelve years teaching experience and specialises in teaching corporate finance and auditing and professional practice.

Nigel Morkel-Kingsbury is a Lecturer in the Department of Banking and Finance at Monash University. He is an experienced educator at both graduate and undergraduate levels, specialising in teaching corporate finance and international study programs.

James Murray previously taught at Monash University, and has also tutored at Swinburne University of Technology and Lincoln University. He completed his PhD in the area of dividend policy at Monash University.

PART 1. Introduction
1. The financial manager and the company

PART 2. Foundations
2. The financial system and the level of interest rates
3. Financial statements, cash flows and tax
4. Analysing financial statements

PART 3. Valuation of future cash flows and risk
5. The time value of money
6. Discounted cash flows and valuation
7. Risk and return
8. Bond valuation and the structure of interest rates
9. Share valuation

PART 4. Capital budgeting decisions
10. The fundamentals of capital budgeting
11. Cash flows and capital budgeting
12. Evaluating project economics and capital rationing
13. The cost of capital

PART 5. Working capital management and financing decisions
14. Working capital management
15. How companies raise capital
16. Capital structure policy
17. Dividends and dividend policy

PART 6. Business formation, valuation and financial planning
18. Business formation, growth and valuation
19. Strategic financial planning and forecasting

PART 7. Options and corporate finance and international decisions
20. Options and corporate finance
21. International financial management

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