AN EMPHASIS ON INTUITION
We always try to separate and explain the principles at work on a common sense, intuitive level before launching into any specifi cs. The underlying ideas are discussed fi rst in very general terms and then by way of examples that illustrate in more concrete terms how a fi nancial manager might proceed in a given situation.
A UNIFIED VALUATION APPROACH
We treat net present value (NPV) as the basic concept underlying corporate fi nance. Many texts stop well short of consistently integrating this important principle. The most basic and important notion, that NPV represents the excess of market value over cost, often is lost in an overly mechanical approach that emphasizes computation at the expense of comprehension. In contrast, every subject we cover is fi rmly rooted in valuation, and care is taken throughout to explain how particular decisions have valuation effects.
A MANAGERIAL FOCUS
Students shouldn’t lose sight of the fact that fi nancial management concerns management. We emphasize the role of the fi nancial manager as decision maker, and we stress the need for managerial input and judgment. We consciously avoid “black box” approaches to fi nance, and, where appropriate, the approximate, pragmatic nature of fi nancial analysis is made explicit, possible pitfalls are described, and limitations are discussed.
In retrospect, looking back to our 1991 fi rst edition IPO, we had the same hopes and fears as any entrepreneurs. How would we be received in the market? At the time, we had no idea that just 18 years later, we would be working on a ninth edition. We certainly never dreamed that in those years we would work with friends and colleagues from around the world to create country-specifi c Australian, Canadian, and South African editions, an International edition, Chinese, French, Polish, Portuguese, Thai, Russian, Korean, and Spanish language editions, and an entirely separate book, Essentials of Corporate Finance, now in its sixth edition.
Today, as we prepare to once more enter the market, our goal is to stick with the basic principles that have brought us this far. However, based on the enormous amount of feedback we have received from you and your colleagues, we have made this edition and its package even more fl exible than previous editions. We offer fl exibility in coverage, by continuing to offer two editions, and fl exibility in pedagogy, by providing a wide variety of features in the book to help students to learn about corporate fi nance. We also provide fl exibility in package options by offering the most extensive collection of teaching, learning, and technology aids of any corporate fi nance text. Whether you use only the textbook, or the book in conjunction with our other products, we believe you will fi nd a combination with this edition that will meet your current as well as your changing course needs.