Table of Contents

Part One: Value1: Goals and Governance of the Firm2: How to Calculate Present Values 3: Valuing Bonds 4: The Value of Common Stocks 5: Net Present Value and Other Investment Criteria 6: Making Investment Decisions with the Net Present Value Rule Part Two: Risk7: Introduction to Risk and Return 8: Portfolio Theory and the Capital Asset Pricing Model 9: Risk and the Cost of Capital Part Three: Best Practices in Capital Budgeting10: Project Analysis Part Four: Financing Decisions and Market Efficiency11: Efficient Markets and Behavioral Finance Part Five: Payout Policy and Capital Structure12: Payout Policy 13: Does Debt Policy Matter? 14: How Much Should a Corporation Borrow? 15: Financing and Valuation Part Six: Options16: Understanding Options 17: Valuing Options Part Seven: Financial Planning and Working Capital Management 18: Financial Analysis 19: Financial Planning Appendix Glossary Index

About the Author

Stewart C. Myers - Emeritus Professor of Financial Economics at MIT’s Sloan School of Management. He is past president of the American Finance Association, a research associate at the National Bureau of Economic Research, a principal of the Brattle Group Inc., and a retired director of Entergy Corporation. His research is primarily concerned with the valuation of real and financial assets, corporate financial policy, and financial aspects of government regulation of business. He is the author of influential research papers on many topics, including adjusted present value, rate of return regulation, pricing and capital allocation in insurance, real options, and moral hazard and information issues in capital structure decisions.



Franklin Allen - Professor of Finance and Economics, Imperial College London, and Emeritus Nippon Life Professor of Finance at the Wharton School of the University of Pennsylvania. He is past president of the American Finance Association, Western Finance Association, Society for Financial Studies, Financial Intermediation Research Society, and Financial Management Association. His research has focused on financial innovation, asset price bubbles, comparing financial systems, and financial crises. He is Director of the Brevan Howard Centre for Financial Analysis at Imperial College Business School.