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Fundamentals of Corporate Finance, 2nd Edition
Robert Parrino, David S. Kidwell,
Thomas Bates
ISBN: 978–0–470–87644–2

Three Anchors of Difference

This book is more than a collection of ideas, equations, and chapters. It has an important integrating theme–that of value creation. This theme, which is carried throughout the book, provides a framework that helps students understand the relations between the various concepts covered in the book and makes it easier for them to learn these concepts.

Integrated Approach: Intuition, Analysis, and Decision Making

To support the focus on value creation, the authors developed three anchors of distinction that sets fundamentals of Corporate Finance, 2nd Edition apart from other undergraduate Corporate Finance textbooks:

  • providing an intuitive framework for understanding fundamental finance concepts
  • teaching students how to analyze and solve finance problems
  • helping students develop the ability to use the results from their
    analyses to make good financial decisions.

1. An Intuitive Approach: The authors believe that explaining finance concepts in an intuitive context helps students develop a richer understanding of those concepts and gain better insights into how finance problems can be approached. They realize that students who have a strong conceptual understanding of financial theory better understand how things really work and are better problem solvers and decision makers than students who focus primarily on computational skills.

2. Analysis and Problem Solving: With a strong understanding of the basic principles of finance, students are equipped to tackle a wide range of financial problems. In addition to the many numerical examples that are solved in the text of each chapter, this book has almost 1,200 end–of–chapter homework and review problems that have been written with Bloom’s Taxonomy in mind. Solutions for these problems are provided in the Instructor’s Manual. The authors strive to help students acquire the ability to analyze and solve finance problems.

3. Decision Making:The authors want to prepare students to make sound financial decisions. To help students develop these skills, throughout the text they’ve illustrated how the results from financial analyses are used in decision–making.