Foundations of Finance: The Logic and Practice of Financial Management : Acticebook Version 1.0

by Keown, Arthur J.; Martin, John D.; Petty, William; Scott, David F., Jr.

• ISBN13: 9780130648402
• ISBN10: 013064840X
• Format: Paperback
• Copyright: 2001-06-01
• Publisher: Pearson College Div

Summary

An interactive, online, digital book that uses multimedia resources to greatly enhance the learning experience. Builds the presentation around the 10 Principles of Finance as an insightful framework for showing the big picture of finance. Softcover.

Table of Contents

Activebook User Guide	ix
An Introduction to the Foundations of Financial Management-The Ties That Bind	1	(20)
What's Ahead	1	(1)
Objectives	2	(1)
Gearing Up	2	(1)
Goal of the Firm	2	(1)
Active Poll	3	(1)
Active Concept Check	3	(1)
Legal Forms of Business Organization	3	(2)
Active Exercise	5	(1)
Active Concept Check	5	(1)
Federal Income Taxation	6	(1)
Active Example	6	(1)
Active Exercise	7	(4)
Active Concept Check	11	(1)
Ten Axioms That Form the Foundations of Financial Management	11	(3)
Active Example	14	(1)
Active Example	15	(1)
Active Poll	15	(2)
Video Exercise	17	(1)
Active Concept Check	18	(1)
Finance and the Multinational Firm: The New Role	18	(1)
Active Concept Check	18	(1)
Overview of the Text	18	(1)
Chapter Wrap-Up	19	(1)
End-of-Chapter, Resources	19	(2)
The Financial Markets and Interest Rates	21	(34)
What's Ahead	21	(2)
Objectives	23	(2)
Gearing Up	25	(1)
The Mix of Corporate Securities Sold in the Capital Market	25	(2)
Active Concept Check	27	(1)
Why Financial Markets Exist	27	(2)
Active Concept Check	29	(1)
Financing of Business: The Movement of Funds through the Economy	29	(2)
Active Concept Check	31	(1)
Components of the U.S. Financial Market System	31	(2)
Active Exercise	33	(1)
Active Concept Check	34	(1)
The Investment Banker	35	(1)
Video Exercise	35	(2)
Active Example	37	(1)
Active Concept Check	37	(1)
Private Placements	38	(1)
Active Concept Check	38	(1)
Flotation Costs	38	(1)
Active Concept Check	39	(1)
Regulation	39	(1)
Active Exercise	40	(1)
Active Concept Check	41	(1)
Rates of Return in the Financial Markets	41	(4)
Active Concept Check	45	(1)
Interest Rate Determinants in a Nutshell	45	(1)
Video Exercise	46	(3)
Active Poll	49	(1)
Active Concept Check	49	(1)
The Term Structure of Interest Rates	49	(1)
Active Example	49	(4)
Active Poll	53	(1)
Active Concept Check	53	(1)
Finance and the Multinational Firm: Efficient Financial Markets and Intercountry Risk	53	(1)
Active Concept Check	53	(1)
Chapter Wrap-Up	53	(1)
End-of-Chapter Resources	54	(1)
Understanding Financial Statements and Cash Flows	55	(18)
What's Ahead	55	(1)
Objectives	56	(1)
Gearing Up	56	(1)
Income Statement	56	(1)
Active Exercise	57	(1)
Active Poll	58	(1)
Active Example	59	(1)
Active Concept Check	59	(1)
Balance Sheet	59	(1)
Active Exercise	60	(5)
Video Exercise	65	(1)
Active Concept Check	65	(1)
Measuring Cash Flows	66	(4)
Active Exercise	70	(1)
Active Concept Check	70	(1)
Finance and the Multinational Firm: Financial Statements and International Finance	70	(1)
Active Poll	70	(1)
Active Exercise	70	(1)
Active Concept Check	71	(1)
Chapter Wrap-Up	71	(1)
End-of-Chapter Resources	71	(2)
Evaluating A Firm's Financial Performance	73	(20)
What's Ahead	73	(1)
Objectives	74	(1)
Gearing Up	74	(1)
Financial Ratio Analysis	75	(7)
Active Exercise	82	(2)
Active Exercise	84	(1)
Active Concept Check	84	(2)
The DuPont Analysis: An Integrative Approach to Ratio Analysis	86	(3)
Active Poll	89	(1)
Active Concept Check	89	(1)
Limitations of Ratio Analysis	89	(1)
Video Exercise	89	(1)
Active Example	90	(1)
Active Concept Check	90	(1)
Firm Performance and Shareholder Value	90	(1)
Active Exercise	91	(1)
Active Example	91	(1)
Active Concept Check	92	(1)
Chapter Wrap-Up	92	(1)
End-of-Chapter Resources	92	(1)
Financial Forecasting, Planning, and Budgeting	93	(14)
What's Ahead	93	(1)
Objectives	94	(1)
Gearing Up	94	(1)
Financial Forecasting	94	(1)
Active Exercise	95	(1)
Active Poll	95	(2)
Active Example	97	(3)
Active Example	100	(2)
Active Example	102	(1)
Active Concept Check	102	(1)
Financial Planning and Budgeting	102	(1)
Active Example	103	(3)
Active Poll	106	(1)
Active Concept Check	106	(1)
Computerized Financial Planning	106	(1)
Active Concept Check	106	(1)
Chapter Wrap-Up	106	(1)
End-of-Chapter Resources	106	(1)
The Time Value of Money	107	(24)
What's Ahead	107	(1)
Objectives	108	(1)
Gearing Up	108	(1)
Compound Interest and Future Value	109	(4)
Video Exercise	113	(1)
Active Exercise	114	(1)
Active Example	115	(1)
Active Concept Check	115	(1)
Present Value	115	(2)
Active Exercise	117	(1)
Active Concept Check	118	(1)
Annuities	118	(2)
Active Poll	120	(3)
Active Concept Check	123	(1)
Annuities Due	123	(1)
Active Concept Check	124	(1)
Amortized Loans	124	(1)
Active Concept Check	125	(1)
Compound Interest with Nonannual Periods	125	(1)
Active Concept Check	126	(1)
Present Value of an Uneven Stream	126	(2)
Active Example	128	(1)
Active Concept Check	128	(1)
Perpetuities	128	(1)
Active Concept Check	129	(1)
The Multinational Firm: The Time Value of Money	129	(1)
Active Poll	129	(1)
Active Example	129	(1)
Active Concept Check	130	(1)
Chapter Wrap-Up	130	(1)
End-of-Chapter Resources	130	(1)
Valuation and Characteristics of Bonds	131	(20)
What's Ahead	131	(1)
Objectives	132	(1)
Gearing Up	132	(1)
Types of Bonds	132	(1)
Active Example	133	(1)
Active Poll	133	(1)
Active Example	134	(1)
Active Exercise	135	(1)
Active Concept Check	135	(1)
Terminology and Characteristics of Bonds	135	(1)
Active Poll	136	(2)
Active Concept Check	138	(1)
Definitions of Value	138	(1)
Active Concept Check	139	(1)
Determinants of Value	139	(1)
Active Example	140	(1)
Active Concept Check	140	(1)
Valuation: The Basic Process	140	(1)
Active Concept Check	141	(1)
Bond Valuation	141	(3)
Active Concept Check	144	(1)
The Bondholder's Expected Rate of Return (Yield to Maturity)	144	(1)
Active Exercise	145	(1)
Active Concept Check	145	(1)
Bond Valuation: Three Important Relationships	145	(3)
Active Concept Check	148	(1)
Chapter Wrap-Up	148	(1)
End-of-Chapter Resources	149	(2)
Valuation and Characteristics of Stock	151	(16)
What's Ahead	151	(1)
Objectives	152	(1)
Gearing Up	152	(1)
Preferred Stock	152	(1)
Active Example	153	(2)
Active Exercise	155	(1)
Active Concept Check	155	(1)
Common Stock	156	(1)
Active Figure	156	(1)
Active Example	157	(1)
Active Example	158	(1)
Active Example	159	(1)
Active Exercise	159	(2)
Active Exercise	161	(1)
Active Exercise	162	(1)
Active Concept Check	162	(1)
The Stockholder's Expected Rate of Return	162	(1)
Active Exercise	163	(1)
Active Exercise	164	(1)
Active Concept Check	165	(1)
Chapter Wrap-Up	165	(1)
End-of-Chapter Resources	165	(2)
The Meaning and Measurement of Risk and Return	167	(20)
What's Ahead	167	(1)
Objectives	168	(1)
Gearing Up	168	(1)
Expected Return Defined and Measured	168	(2)
Active Example	170	(1)
Active Concept Check	170	(1)
Risk Defined and Measured	170	(2)
Active Exercise	172	(1)
Active Example	173	(1)
Active Concept Check	173	(1)
Rates of Return: The Investor's Experience	173	(1)
Active Poll	174	(1)
Active Concept Check	175	(1)
Risk and Diversification	175	(1)
Active Example	176	(7)
Active Poll	183	(1)
Active Concept Check	183	(1)
The Investor's Required Rate of Return	184	(2)
Active Exercise	186	(1)
Active Concept Check	186	(1)
Chapter Wrap-Up	186	(1)
End-of-Chapter Resources	186	(1)
Capital-Budgeting Techniques and Practice	187	(24)
What's Ahead	187	(1)
Objectives	188	(1)
Gearing Up	188	(1)
Finding Profitable Projects	188	(1)
Active Example	189	(1)
Active Concept Check	189	(1)
Capital-Budgeting Decision Criteria	189	(2)
Active Exercise	191	(2)
Active Exercise	193	(5)
Active Exercise	198	(3)
Video Exercise	201	(1)
Active Concept Check	201	(1)
Capital Rationing	201	(1)
Active Example	202	(1)
Active Example	203	(1)
Active Concept Check	203	(1)
Problems in Project Ranking: Capital Rationing, Mutually Exclusive Projects, and Problems with the IRR	204	(3)
Active Concept Check	207	(1)
Ethics in Capital Budgeting	207	(1)
Active Poll	207	(1)
Active Concept Check	208	(1)
A Glance at Actual Capital-Budgeting Practices	208	(1)
Active Concept Check	209	(1)
Finance and the Multinational Firm: Capital Budgeting	209	(1)
Active Poll	209	(1)
Active Concept Check	210	(1)
Chapter Wrap-Up	210	(1)
End-of-Chapter Resources	210	(1)
Cash Flows and Other Topics in Capital Budgeting	211	(24)
What's Ahead	211	(1)
Objectives	212	(1)
Gearing Up	212	(1)
Guidelines for Capital Budgeting	213	(1)
Video Exercise	213	(2)
Video Exercise	215	(1)
Active Concept Check	215	(1)
Measuring a Project's Benefits and Costs	216	(7)
Active Example	223	(1)
Active Concept Check	223	(1)
Risk and the Investment Decision	223	(1)
Active Poll	224	(1)
Active Example	225	(1)
Active Example	226	(1)
Active Concept Check	226	(1)
Incorporating Risk into Capital Budgeting	226	(3)
Active Exercise	229	(1)
Active Concept Check	229	(1)
Examining a Project's Risk through Simulation	229	(3)
Active Poll	232	(1)
Active Concept Check	232	(1)
Finance and the Multinational Firm: Calculating Cash Flows and the International Dimension of Risk	232	(1)
Active Concept Check	233	(1)
Chapter Wrap-Up	233	(1)
End-of-Chapter Resources	233	(2)
Cost of Capital	235	(22)
What's Ahead	235	(1)
Objectives	236	(1)
Gearing Up	237	(1)
The Cost of Capital: Key Definitions and Concepts	237	(1)
Active Concept Check	238	(1)
Determining Individual Costs of Capital	238	(3)
Active Example	241	(3)
Active Concept Check	244	(1)
The Weighted Average Cost of Capital	244	(1)
Active Example	245	(2)
Active Concept Check	247	(1)
Calculating Divisional Costs of Capital: Pepsico, Inc.	247	(1)
Active Poll	248	(1)
Video Exercise	248	(1)
Active Concept Check	248	(1)
Using a Firm's Cost of Capital to Evaluate New Capital Investments	248	(2)
Active Concept Check	250	(1)
Shareholder Value-Based Management	251	(1)
Active Poll	252	(1)
Active Example	253	(1)
Active Exercise	253	(1)
Active Concept Check	254	(1)
Finance and the Multinational Firm: Why Do Interest Rates Differ Between Countries?	254	(1)
Active Concept Check	255	(1)
Chapter Wrap-Up	256	(1)
End-of-Chapter Resources	256	(1)
Determining the Financing Mix	257	(36)
What's Ahead	257	(1)
Objectives	258	(1)
Gearing Up	259	(1)
Business and Financial Risk	260	(1)
Active Concept Check	261	(1)
Break-even Analysis	261	(3)
Video Exercise	264	(2)
Active Concept Check	266	(1)
Operating Leverage	267	(2)
Active Concept Check	269	(1)
Financial Leverage	270	(2)
Active Concept Check	272	(1)
Combination of Operating and Financial Leverage	272	(2)
Active Concept Check	274	(1)
Planning the Financing Mix	274	(1)
Active Poll	275	(1)
Active Concept Check	276	(1)
A Quick Look at Capital Structure Theory	276	(4)
Active Example	280	(4)
Active Example	284	(1)
Active Concept Check	284	(1)
Basic Tools of Capital Structure Management	284	(4)
Active Example	288	(1)
Active Exercise	289	(1)
Active Concept Check	289	(1)
A Glance at Actual Capital Structure Management	289	(1)
Active Poll	290	(1)
Video Exercise	291	(1)
Active Concept Check	291	(1)
Finance and the Multinational Firm: Business Risk and Global Sales	291	(1)
Active Concept Check	292	(1)
Chapter Wrap-Up	292	(1)
End-of-Chapter Resources	292	(1)
Dividend Policy and Internal Financing	293	(22)
What's Ahead	293	(1)
Objectives	294	(1)
Gearing Up	294	(1)
Key Terms	295	(1)
Active Concept Check	295	(1)
Does Dividend Policy Affect Stock Price?	295	(2)
Active Poll	297	(3)
Active Poll	300	(3)
Active Concept Check	303	(1)
The Dividend Decision in Practice	303	(3)
Video Exercise	306	(1)
Active Concept Check	306	(1)
Dividend Payment Procedures	306	(1)
Active Concept Check	307	(1)
Stock Dividends and Stock Splits	307	(1)
Active Example	307	(2)
Video Exercise	309	(1)
Active Concept Check	309	(1)
Stock Repurchases	309	(1)
Active Example	310	(1)
Active Example	311	(1)
Active Concept Check	311	(1)
Finance and the Multinational Firm: The Case of Low Dividend Payments; So Where Do We Invest?	311	(2)
Active Example	313	(1)
Active Concept Check	313	(1)
Chapter Wrap-Up	313	(1)
End-of-Chapter Resources	313	(2)
Introduction to Working-Capital Management	315	(16)
What's Ahead	315	(1)
Objectives	316	(1)
Gearing Up	316	(1)
Managing Current Assets and Liabilities	316	(1)
Active Poll	317	(1)
Active Example	318	(1)
Active Concept Check	318	(1)
Appropriate Level of Working Capital	318	(2)
Active Concept Check	320	(1)
Using the Cash Conversion Cycle to Evaluate Working-Capital Management	320	(1)
Active Concept Check	321	(1)
Estimation of the Cost of Short-Term Credit	322	(1)
Active Concept Check	323	(1)
Sources of Short-Term Credit	323	(1)
Active Poll	324	(1)
Active Exercise	325	(1)
Active Example	326	(2)
Active Exercise	328	(2)
Active Exercise	330	(1)
Active Example	330	(1)
Chapter Wrap-Up	330	(1)
End-of-Chapter Resources	330	(1)
Liquid Asset Management	331	(32)
What's Ahead	331	(1)
Objectives	332	(1)
Gearing Up	333	(1)
Why a Company Holds Cash	333	(1)
Active Poll	334	(1)
Active Concept Check	335	(1)
Cash Management Objectives and Decisions	335	(1)
Active Exercise	335	(1)
Active Concept Check	336	(1)
Collection and Disbursement Procedures	336	(9)
Active Poll	345	(1)
Active Concept Check	345	(1)
Evaluation of Costs of Cash Management Services	345	(1)
Active Concept Check	346	(1)
Composition of Marketable-Securities Portfolio	347	(7)
Active Example	354	(1)
Active Concept Check	354	(1)
Accounts-Receivable Management	354	(2)
Active Example	356	(1)
Active Concept Check	356	(1)
Inventory Management	357	(1)
Active Example	358	(2)
Video Exercise	360	(1)
Video Exercise	361	(1)
Active Example	362	(1)
Active Concept Check	362	(1)
Chapter Wrap-Up	362	(1)
End-of-Chapter Resources	362	(1)
International Business Finance	363	(20)
What's Ahead	363	(1)
Objectives	364	(1)
Gearing Up	364	(1)
The Globalization of Product and Financial Markets	364	(1)
Active Poll	365	(1)
Active Concept Check	365	(1)
Exchange Rates	365	(1)
Active Example	366	(1)
Active Example	366	(3)
Active Exercise	369	(3)
Active Exercise	372	(2)
Active Example	374	(1)
Active Concept Check	374	(1)
Interest-Rate Parity Theory	374	(1)
Active Concept Check	374	(1)
Purchasing-Power Parity Theory	374	(1)
Active Concept Check	375	(1)
Exposure to Exchange Rate Risk	375	(1)
Video Exercise	376	(2)
Active Exercise	378	(1)
Active Concept Check	379	(1)
Multinational Working-Capital Management	379	(1)
Active Concept Check	380	(1)
International Financing and Capital Structure Decisions	380	(1)
Active Concept Check	381	(1)
Direct Foreign Investment	381	(1)
Active Poll	381	(1)
Active Concept Check	382	(1)
Chapter Wrap-Up	382	(1)
End-of-Chapter Resources	382	(1)
Index	383