Includes bibliographical references and index.

pt. 1 -- Value -- Why finance matters -- Present value and the opportunity cost of capital -- How to calculate present values -- Present value of bonds and stocks -- Why net present value leads to better investment decisions than other criteria -- Making investment decisions with the net present value rule -- pt. 2. Risk -- Introduction to risk, return, and the opportunity cost of capital -- Risk and return -- Capital budgeting and risk -- pt. 3. Practical problems in capital budgeting -- A project is not a black box -- Where positive net present values come from -- Organizing capital expenditure and evaluating performance afterward -- pt. 4. Financing decisions and market efficiency -- Corporate financing and the six lessons of market efficiency -- An overview of corporate financing -- How corporations issue securities -- pt. 5. Dividend policy and capital structure -- The divident controversy -- Does debt policy matter? -- How much should a firm borrow? -- Interactions of investment and financing decisions -- pt. 6. Options -- Corporate liabilities and the valuation of options -- Applications of option pricing theory -- Warrants and convertibles -- pt. 7. Debt financing -- Valuing risky debt -- The many different kinds of debt -- Hedging financial risk -- Leasing -- pt. 8. Financial planning -- Analyzing financial performance -- Approaches to financial planning -- Short-term financial planning -- pt. 9. Short term financial decisions -- Credit management -- Cash management -- Short-term lending and borrowing -- pt. 10. Mergers, international finance, and pensions -- Mergers -- International financial management -- Pension plans -- pt. 11. Conclusions -- Conclusion: what we do and do not know about finance.