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Corporate Finance: Theory and Practice, 2nd Edition

Corporate Finance: Theory and Practice, 2nd Edition

Aswath Damodaran

ISBN: 978-0-471-28332-4

Feb 2001

1008 pages

Select type: Hardcover

In Stock



This text is intended for the Corporate Finance course at the MBA level, but it can also be appropriate for undergraduates at higher level schools. Aswath Damodaran is nationally recognized for his teaching approach, using theory and the models that flow from it to understand, analyze and solve problems. He treats corporate finance as a living discipline by making it much more applied than other textbooks. Throughout the text, real companies and real data are used in examples and exercises.

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Introduction to Corporate Finance

The Objective in Corporate Finance

The Time Value of Money

Understanding Financial Statements

Value and Price: An Introduction

The Basics of Risk

Estimating Hurdle Rates for Firms

Estimating Hurdle Rates for Projects

Estimating Earnings and Cash Flows on Projects

Investment Decision Rules

Investment Analysis with Inflation and Exchange Rate Risk

Project Interactions, Side Benefits and Side Costs

Investments in Non-Cash working Capital

Investments in Cash and Marketable Securities

Investment Returns and Corporate Strategy

An Overview of Financing Choices

The Financing Process

The Financing Mix

The Optimal Financing Mix

Financing Mix and Choices Dividend Policy

Analyzing Cash Returned to Stockholders

Beyond Cash Dividends: Buybacks, Spin Offs and Divestitures

Valuation: Principles and Practice

Value Enhancement: Tools and Techniques

Acquisitions and Takeovers

Option Applications in Corporate Finance

  • The web site now provides more online links and support for students and teachers, especially for the end-of-chapter "Real Companies, Real Time" exercises.
  • Treatment of valuation has been moved up to Chapter 5. By introducing valuation earlier, it provides a basis for the discussion of the valuation effects of capital structure later in the book.
  • There is now a fuller discussion of value enhancement measures and real options.
  • There is more detailed support for tables and examples in this edition.
  • "Real Companies, Real Data." Three companies, Boeing, The Home Depot, and Infosoft, are used as examples throughout the text. By following the same three companies throughout, students gain the necessary background to understand the financial principles as they are presented.
  • "Real Companies, Real Time." These end-of-chapter exercises present students with a guiding set of activities and questions for them to apply to a company of their choosing. This "live case study" approach allows students to study a company of interest to them while applying chapter concepts to a real company.
  • With an emphasis on framework, Damodaran uses a "big picture" approach to insure that students do not get intimidated by the detail of the formulas and theoretical models. Part-opening road maps also help guide the students.
  • A robust web site with support for students and instructors including links and support for the "Real Companies, Real Time" exercises, extra practice problems and solutions, andupdated analysis on the companies analyzed in the text.