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Principles of Managerial Finance, 16th edition

Published by Pearson (January 14, 2021) © 2022

  • Chad J. Zutter University of Pittsburgh
  • Scott B. Smart Indiana University

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For introductory managerial finance courses.

Using a proven teaching and learning framework to solve real-world problems

The Teaching and Learning System, a hallmark feature of Principles of Managerial Finance, weaves pedagogy into concepts and practice, giving students a roadmap to follow through the text and supplementary tools.

Using a generous amount of examples, the 16th Edition concentrates on the latest material students need to know in order to make effective financial decisions in an increasingly competitive business environment. As such, it allows students to make the connections between a firm's action and its value, as determined in the financial market.

Hallmark features of this title

A best-in-class teaching and learning framework

  • Learning Goals highlight the most important concepts and techniques to be covered in the chapter.
  • Why This Chapter Matters to You boxes motivate by summarizing the personal and professional benefits from achieving the chapter learning goals.
  • Review of Learning Goals boxes let students reconcile what they've learned and confirm their understanding before moving on.

Content that reflects the latest practices

  • Matter of Fact boxes provide interesting empirical facts that add background and depth to the material.

Practice applying concepts to real problems

  • Personal Finance examples show students the value of applying financial principles and techniques to their own personal financial decisions.

New and updated features of this title

Content that reflects the latest practices

  • NEW and UPDATED: Chapter-opening vignettes feature stories involving companies like Netflix, Apple and T-Mobile, which are familiar to students and relevant for business in the real world.
  • EXPANDED: Discussions on key topics help students make keen financial decisions in an increasingly competitive business environment. Topics include the financial markets in crisis (Ch. 2), bond price sensitivity to interest rate changes (Ch. 6), and important merger concepts (Ch. 18).
  • NEW and UPDATED: Examples use data from real markets and real companies like Tesla and SouthWest Airlines to connect concepts to students' daily lives.

Practice applying concepts to real problems

  • UPDATED: Newly formatted Financial Calculator screenshots demonstrate exact keystrokes, helping students complete time-value-money calculations.
  • NEW and UPDATED: Focus On… boxes draw on actual events to highlight important business practices, ethics, and the intersection of people, planet, and profit.
  • NEW and UPDATED: Opener-In-Review Questions, Review Questions, Self-Test Problems, Warm-Up Exercises, Comprehensive Problems, and Personal Finance Problems challenge readers' understanding of key concepts, tools and techniques that they've learned.

Features of MyLab Finance for the 16th Edition

  • NEW: Corporate Finance Simulations have students apply key finance concepts based on real-world scenarios as well as receive instant feedback.
  • Homework and practice exercises in MyLab are correlated to exercises in the text, reflecting each author's approach and learning style. They regenerate algorithmically to give students unlimited opportunity for practice and mastery.
  • TestGen® enables instructors to build, edit, print and administer tests using a computerized bank of questions developed to cover all the text's objectives.
  • Pearson eText is an easy-to-use digital textbook, available with MyLab, which lets students read, highlight and take notes all in one place, even when offline.

PART 1: INTRODUCTION TO MANAGERIAL FINANCE
1. The Role of Managerial Finance
2. The Financial Market Environment

PART 2: FINANCIAL TOOLS
3. Financial Statements and Ratio Analysis
4. Long and Short-term Financial Planning
5. Time Value of Money

PART 3: VALUATION OF SECURITIES
6. Interest Rates and Bond Valuation
7. Stock Valuation

PART 4: RISK AND THE REQUIRED RATE OF RETURN
8. Risk and Return
9. The Cost of Capital

PART 5: LONG-TERM INVESTMENT DECISIONS
10. Capital Budgeting Techniques
11. Capital Budgeting Cash Flows
12. Risk and Refinements in Capital Budgeting

PART 6: LONG-TERM FINANCIAL DECISIONS
13. Capital Structure
14. Payout Policy

PART 7: SHORT-TERM FINANCIAL DECISIONS
15. Working Capital and Current Assets Management
16. Current Liabilities Management

PART 8: SPECIAL TOPICS IN MANAGERIAL FINANCE
17. Hybrid and Derivative Securities
18. Mergers, LBOs, Divestitures, and Business Failure
19. International Managerial Finance

About our authors

Chad J. Zutter is a finance professor and the James Allen Faculty Fellow at the Katz Graduate School of Business at the University of Pittsburgh. Dr. Zutter received his BBA from the University of Texas at Arlington and his PhD from Indiana University. His research has a practical, applied focus and has been the subject of feature stories in, among other prominent outlets, The Economist and CFO Magazine. His papers have been cited in arguments before the US Supreme Court and in consultation with companies such as Google and Intel. Dr. Zutter won the prestigious Jensen Prize for the best paper published in the Journal of Financial Economics and a best paper award from the Journal of Corporate Finance, where he is currently an Associate Editor. He has won teaching awards at the Kelley School of Business at Indiana University and the Katz Graduate School of Business at the University of Pittsburgh. Dr. Zutter also serves on the board of Lutheran SeniorLife and, prior to his career in academics, he was a submariner in the US Navy. Dr. Zutter and his wife have 4 children and live in Pittsburgh, Pennsylvania. In his free time he enjoys horseback riding and downhill skiing.

Scott B. Smart is a finance professor and the Fettig/Whirlpool Finance Faculty Fellow at the Kelley School of Business at Indiana University. Dr. Smart received his BBA from Baylor University and his MA and PhD from Stanford University. His research focuses primarily on applied corporate finance topics and has been published in journals such as the Journal of Finance, the Journal of Financial Economics, the Journal of Corporate Finance, Financial Management, and others. His articles have been cited by business publications including The Wall Street Journal, The Economist, and Business Week. Winner of more than a dozen teaching awards, Dr. Smart has been listed multiple times as a top business school teacher by Business Week. He has held Visiting Professor positions at the University of Otago and Stanford University, and he worked as a Visiting Scholar for Intel Corporation, focusing on that company’s mergers and acquisitions activity during the ‘‘Dot-com’’ boom in the late 1990s. As a volunteer, Dr. Smart currently serves on the boards of the Indiana University Credit Union and Habitat for Humanity. In his spare time he enjoys outdoor pursuits such as hiking and fly fishing.

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