Nelson Higher Education

Higher Education

Financial Management: Theory and Practice, 3rd Edition

  • Eugene F. Brigham
  • Michael C. Ehrhardt
  • Jerome Gessaroli
  • Richard R. Nason
  • ISBN-10: 017658305X
  • ISBN-13: 9780176583057
  • 0 Pages | Hardcover
  • Previous Editions: 2014, 2011, 2008
  • COPYRIGHT: 2017 Published
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Overview

About the Product

The third Canadian edition of Brigham’s Financial Management: Theory and Practice delivers solid financial theory and practical applications, preparing students for future careers in business and finance in an engaging manner that makes the content come alive. This resource emphasizes the actions that a manager should take to increase the value of the firm. Structuring the book around valuation and cash flows enhances continuity and helps students see how topics relate to one another. The hallmark of this resource is “The Corporate Valuation Framework”, a pedagogical feature presented early in each chapter. By highlighting specific parts of the framework, the model explicitly shows how each chapter relates to corporate valuation. The book begins with fundamental concepts, including background on the economic and financial environment, financial statements (with an emphasis on cash flows), the time value of money, financial forecasting, bond valuation, risk analysis, and stock valuation. With this background, students then learn specific techniques and decision rules that can be used to help maximize the value of the firm. MindTap raises the bar with multimedia, Concept Clips and Aplia problem sets: providing the ideal solution for keeping students on track and prepared for tests and exams. Highly customizable, instructors can add RSS feeds, YouTube videos, Google docs and more to further increase student engagement and achieve deeper learning.

Features

  • The hallmark of this resource is the Corporate Valuation Framework, a pedagogical feature that is presented early in each chapter. These diagrams make it clear how the chapter’s materials relate to the corporate valuation model. They do so by highlighting the specific parts of the model that are relevant to the chapter. This illustrative framework is a simple yet powerful learning tool.

  • Substantial Excel Integration: The application of finance requires extensive use of Excel. Brigham has taken the integration of teaching finance and Excel to a new level. Illustrations, examples, and formulas are developed using Excel, and point-by-point explanations are provided for using Excel to model the various concepts. End-of-chapter Excel problems provide opportunities to work with finance problems in a much more practical manner than by simply using a calculator. Further information on Excel integration is described later on in the “Excel Tool Kits” and “Build a Model” sections.

  • Excel Tool Kits: Excel Tool Kits enhance student proficiency with spreadsheets. Created for each chapter (except Chapter 1), these models include explanations and screen shots that show students how to use many of the features and functions of Excel. We have integrated the models into the text so that many figures and tables in the textbook are drawn right from the Excel model, including the Excel row and column headings so that students can see exactly how the problem is worked in Excel. The Tool Kits are available on the textbook’s website.

  • Canadian Content: Brigham has been thoroughly adapted for the Canadian market by carefully reviewing the Canadian coverage in every chapter. Three criteria are used for updating the text with Canadian content: (1) Canadian institutions, laws, financial markets, and tax rules are fully reflected in the text. (2) Given the importance of the U.S. markets and institutions to Canada, especially in the area of finance, discussions of key U.S. financial markets and research findings are kept in place where appropriate, along with illustrations. (3) Details with little relevance to Canada, and those of a tertiary nature, have been deleted to maintain focus and clarity.

  • Corporate Ethics: With corporate ethics and governance issues making headlines, we have provided a discussion of ethical abuses throughout the book. In Chapter 22: “Corporate Valuation and Governance” we specifically address corporate governance and the actions that both firms and government bodies can take to minimize such events in the future.

  • The 2007–2009 Credit Crisis: Coverage of the credit crisis is delivered in a straightforward and accessible manner, including discussion of the financial instruments the popular press often refers to – as well as the implications of the crisis for the broader economy. This issue is covered in Chapter 16: “Capital Market Financing: Hybrid and Other Securities.” In a number of other chapters, specific elements of the financial crisis are included as they relate directly to the chapter’s topic.

  • Textbook “Web Extensions”: instructors have access to 27 additional specialized topics that are important but not essential for every introductory finance course. Identical in formatting and layout to the text itself and delivered in Adobe PDF files on the textbook’s website, these features provide instructors with the flexibility to customize their courses and provide robust coverage without making the actual textbook too large or cumbersome.

  • Practical Application of Theory: As happens in most academic disciplines, theory is not always consistent with real life. Brigham provides students with brief discussions (such as “Capital Structure Theory: Our View” in Chapter 12, and “Current Status of the CAPM” in Chapter 7) on how the theory fits with reality. Common errors that students may make when applying financial theory or tools are also covered.

About the Author

Eugene F. Brigham

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 adventures such as biking through Alaska.

Michael C. Ehrhardt

Dr. Michael C. Ehrhardt is a Professor Emeritus and current faculty member in two Executive MBA programs at the University of Tennessee. He received a B.S. in Civil Engineering and a B.A. in Economics at Swarthmore College. After working several years as an engineer, he earned his M.S. in Operations Research and Ph.D. in Finance from the Georgia Institute of Technology. Dr. Ehrhardt has taught extensively at the undergraduate, master's and doctoral levels in the areas of investments, corporate finance and capital markets. He has directed and served on numerous dissertation committees. Dr. Ehrhardt teaches in executive education programs and consults in the areas of corporate valuation, value-based compensation plans, financial aspects of supply chain management and the cost of capital. His honors include the Allen G. Keally Outstanding Teacher Award, the Tennessee Organization of MBA Students Outstanding Faculty Award, the College of Business Administration Research & Teaching Award and the John B. Ross Outstanding Teaching Award in the College of Business. An author and co-author of several books addressing various areas of finance, Dr. Ehrhardt focuses much of his research on corporate valuation and asset pricing models, including pricing models for interest-rate sensitive instruments. His work has been published in numerous journals, including THE JOURNAL OF FINANCE, JOURNAL OF FINANCIAL AND QUANTITATIVE ANALYSIS, FINANCIAL MANAGEMENT, THE FINANCIAL REVIEW, THE JOURNAL OF FINANCIAL RESEARCH and THE JOURNAL OF BANKING AND FINANCE.

Jerome Gessaroli

Mr. Gessaroli brings to BCIT’s Financial Management Department over 15 years of industry experience in both the high technology and financial services sectors. For 10 years, he worked for western Canada’s largest industrial research and development firm. In 1996, Mr. Gessaroli saw an opportunity to apply his business knowledge in the financial industry. Mr Gessaroli obtained his license to trade securities and options working for two established local investment dealers. Over this time he worked with individuals and companies to manage their investment and pension accounts. In 2000, he joined the corporate finance department of an investment dealer helping to vet and structure financing for small growing companies.

Richard R. Nason

Dr. Nason is an Associate Professor of Finance in the Faculty of Management at Dalhousie University, where he teaches corporate finance, capital budgeting, investments and derivatives. He has been voted one of the MBA Professors of the Year for the 2002, 2003 and 2005 school years. Dr. Nason has an extensive background in risk management and the derivatives industry. Dr. Nason has a M.Sc. in Physics from the University of Pittsburgh and a MBA and a Ph.D. in Finance from the Richard Ivey Business School at the University of Western Ontario. He is a Chartered Financial Analyst charterholder, Board Member for the Atlantic Canada Financial Analyst Society and Bridgeway Academy, and is a member of Dalhousie’s Pension Advisory Committee.

Table of Contents

Part 1: Fundamental Concepts
Chapter 1: An Overview of Financial Management and the Financial Environment
Chapter 2: Financial Statements, Cash Flow, and Taes
Chapter 3: Analysis of Financial Statements
Chapter 4: Time Value of Money
Chapter 5: Financial Planning and Forecasting Financial Statements
Part 2: Securities and Their Valuation
Chapter 6: Bonds, Bond Valuation, and Interest Rates
Chapter 7: Risk, Return, and the Capital Asset Pricing Model
Chapter 8: Stocks, Stock Valuation, and Stock Market Equilibrium
Part 3: Projects and Their Valuation
Chapter 9: The Cost of Capital
Chapter 10: The Basics of Capital Budgeting: Evaluating Cash Flows
Chapter 11: Cash Flow Estimation and Risk Analysis
Part 4: Financing Activities
Chapter 12: Capital Structure Decisions
Chapter 13: Distributions to Shareholders: Dividends and Repurchases
Chapter 14: Initial Public Offerings, Investment Banking, and Financial Restructuring
Chapter 15: Lease Financing
Chapter 16: Capital Market Financing: Hybrid and Other Securities
Chapter 17: Working Capital Management and Short-Term Financing
Chapter 18: Current Asset Management
Part 5: Derivative Techniques
Chapter 19: Financial Options and Applications in Corporate Finance
Chapter 20: Enterprise Risk Management
Part 6: Special Topics
Chapter 21: International Financial Management
Chapter 22: Corporate Valuation and Governance
Chapter 23: Mergers, Acquisitions, and Restructuring
Web Chapter 24: Decision Trees, Real Options, and Other Capital Budgeting Topics
Appendix A: Answers to End-of-Chapter Problems
Appendix B: Selected Equations and Data
Appendix C: Values of the Areas under the Standard Normal Distribution Function
Glossary
Name Index
Subject Index
Web Appendix: Solutions to Concept Review Problems

New to this edition

  • MindTap raises the bar with multimedia, Concept Clips and Aplia problem sets: the ideal solution for keeping students on track and prepared for tests and exams. Highly customizable, instructors can add RSS feeds, YouTube videos, Google docs and more to further increase student engagement and achieve deeper learning.
  • Increased visual representations throughout the text, including graphs and figures help students understand challenging concepts.
  • Instructors now have access to a “Web Extension” on the Monte Carlo Simulation. “Web Extensions” are chapter appendices that provide more detailed coverage of topics addressed in the chapter, as downloadable PDF files, and are designed just like the text chapters. See the Table of Contents for a full listing of Web extensions.
  • New vignettes ensure that examples are current and interesting to students. Examples include: Payday lenders (Chapter 4), how Apple distributes cash to shareholders (Chapter 13), Crowdfunding to Raise Capital (Chapter 14), and Blackberry’s decision to use convertible debenture financing (Chapter 16).
  • New topics include: Fisher Separation Theorem, Behavioural Finance and the COSO framework for enterprise risk management.
  • Chapter 20: Derivatives and Risk Management (previously Chapter 21) has been substantially revised to focus on enterprise risk management with applications of derivatives as a tool in managing risk.

Supplements

All supplements have been updated in coordination with the Main title.
Please see Main title page for new to this edition information.

Instructor Supplements

MindTap Printed Access Card (12 Months/Multi Term) for Financial Management: Theory and Practice  (ISBN-10: 0176596674 | ISBN-13: 9780176596675)
MindTap Printed Access Card (6-Months) for Financial Management: Theory and Practice, 3CE  (ISBN-10: 0176596666 | ISBN-13: 9780176596668)
MindTap Instant Access (12 Months/Multi Term) for Financial Management: Theory and Practice  (ISBN-10: 0176596631 | ISBN-13: 9780176596637)

MindTap® provides you with the tools you need to manage your time better. You can complete assignments whenever and wherever with course material customized and streamlined for you by your instructor in a proven and easy-to-use interface. Relevant, engaging material keeps you connected to your course and course analytics by providing timely feedback showing you where you stand at all times—both individually and compared with the highest performers in class. With a wide array of course specific tools and apps – from an interactive eBook to note taking capabilities and flashcards, you can feel confident that MindTap is a worthwhile and valuable investment in your education. Please note - A Course Registration URL or Course Key is required from your Instructor to use MindTap.

Online Only Instructor Resources to Accompany Brigham's, Financial Management: Theory and Practice, Third Canadian Edition  (ISBN-10: 0176595562 | ISBN-13: 9780176595562)
Financial Management: Theory and Practice, Loose-Leaf Version  (ISBN-10: 0176794719 | ISBN-13: 9780176794712)

Student Supplements

eBook: Financial Management: Theory and Practice 3ce  (ISBN-10: 0176933700 | ISBN-13: 9780176933708)
MindTap Printed Access Card (12 Months/Multi Term) for Financial Management: Theory and Practice  (ISBN-10: 0176596674 | ISBN-13: 9780176596675)
MindTap Instant Access (6 Months/Single Term) for Brigham's Financial Management: Theory and Practice  (ISBN-10: 0176596623 | ISBN-13: 9780176596620)

MindTap® provides you with the tools you need to manage your time better. You can complete assignments whenever and wherever with course material customized and streamlined for you by your instructor in a proven and easy-to-use interface. Relevant, engaging material keeps you connected to your course and course analytics by providing timely feedback showing you where you stand at all times—both individually and compared with the highest performers in class. With a wide array of course specific tools and apps – from an interactive eBook to note taking capabilities and flashcards, you can feel confident that MindTap is a worthwhile and valuable investment in your education. Please note - A Course Registration URL or Course Key is required from your Instructor to use MindTap.

MindTap Instant Access (12 Months/Multi Term) for Financial Management: Theory and Practice  (ISBN-10: 0176596631 | ISBN-13: 9780176596637)

MindTap® provides you with the tools you need to manage your time better. You can complete assignments whenever and wherever with course material customized and streamlined for you by your instructor in a proven and easy-to-use interface. Relevant, engaging material keeps you connected to your course and course analytics by providing timely feedback showing you where you stand at all times—both individually and compared with the highest performers in class. With a wide array of course specific tools and apps – from an interactive eBook to note taking capabilities and flashcards, you can feel confident that MindTap is a worthwhile and valuable investment in your education. Please note - A Course Registration URL or Course Key is required from your Instructor to use MindTap.

Aplia Instant Access (12 Months/Multi Term) for Brigham's Financial Management: Theory and Practice  (ISBN-10: 0176596615 | ISBN-13: 9780176596613)
Aplia Instant Access (6 Months/Single Term) for Financial Management: Theory and Practice  (ISBN-10: 0176596607 | ISBN-13: 9780176596606)
Financial Management: Theory and Practice, Loose-Leaf Version  (ISBN-10: 0176794719 | ISBN-13: 9780176794712)