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ideas are discussed first in very general terms and then by way of examples that illustrate in
more concrete terms how a financial manager might proceed in a given situation.
A Unified Valuation Approach We treat net present value (NPV) as the basic concept
underlying corporate finance. Many texts stop well short of consistently integrating this
important principle. The most basic and important notion, that NPV represents the excess
of market value over cost, often is lost in an overly mechanical approach that emphasizes
computation at the expense of comprehension. In contrast, every subject we cover is firmly
rooted in valuation, and care is taken throughout to explain how particular decisions have
valuation effects.
A Managerial Focus Students shouldn’t lose sight of the fact that financial manage-
ment concerns management. We emphasize the role of the financial manager as decision
maker, and we stress the need for managerial input and judgment. We consciously avoid
“black box” approaches to finance, and, where appropriate, the approximate, pragmatic
nature of financial analysis is made explicit, possible pitfalls are described, and limitations
are discussed.
Today, as we prepare to once again enter the market, our goal is to stick with and build
on the principles that have brought us this far. However, based on an enormous amount of
feedback we have received from you and your colleagues, we have made this edition and
its package even more flexible than previous editions. We offer flexibility in coverage and
pedagogy by providing a wide variety of features in the book to help students learn about
corporate finance. We also provide flexibility in package options by offering the most ex-
tensive collection of teaching, learning, and technology aids of any corporate finance text.
Whether you use just the textbook, or the book in conjunction with other products, we
believe you will find a combination with this edition that will meet your current as well as
your changing needs.
Stephen A. Ross
Randolph W. Westerfield
Bradford D. Jordan
vii
Organization of the Text
W e designed Essentials of Corporate Finance to be as flexible and modular as pos-
sible. There are a total of nine parts, and, in broad terms, the instructor is free to
decide the particular sequence. Further, within each part, the first chapter generally con-
tains an overview and survey. Thus, when time is limited, subsequent chapters can be omit-
ted. Finally, the sections placed early in each chapter are generally the most important, and
later sections frequently can be omitted without loss of continuity. For these reasons, the
instructor has great control over the topics covered, the sequence in which they are covered,
and the depth of coverage.
Just to get an idea of the breadth of coverage in the eighth edition of Essentials, the
following grid presents for each chapter some of the most significant new features, as well
as a few selected chapter highlights. Of course, in every chapter, figures, opening vignettes,
boxed features, and in-chapter illustrations and examples using real companies have been
thoroughly updated as well. In addition, the end-of-chapter material has been completely
revised.
viii
Chapters Selected Topics Benefits to Users
Chapter 3 Additional explanation of alternative Expanded explanation of growth rate formulas clears up
formulas for sustainable and internal a common misunderstanding about these formulas and
growth rates. the circumstances under which alternative formulas are
correct.
New ratio discussion. Introduces and discusses the EBITDA/enterprise
value ratio.
ix
Chapters Selected Topics Benefits to Users
Chapter 13 Basics of financial leverage. Illustrates effect of leverage on risk and return.
Optimal capital structure. Describes the basic trade-offs leading to an optimal
capital structure.
Financial distress and bankruptcy. Briefly surveys the bankruptcy process.
Chapter 14 Updated to reflect latest research on Brings students the latest thinking and evidence
dividend policy. on dividend policy and also the results of a natural
experiment—the 2003 dividend tax cut.
Dividends and dividend policy. Describes dividend payments and the factors
favoring higher and lower payout policies.
Includes recent survey results on setting dividend
policy.
Chapter 15 IPO valuation. Extensive, up-to-date discussion of IPOs,
including the 1999–2000 period and the recent
Facebook IPO.
Dutch auctions. Explains uniform price (“Dutch”) auctions using Google
IPO as an example.
New coverage on the “partial Explains the well-known relation between
adjustment” phenomenon. IPO underpricing and offer prices relative to file
ranges.
x
Chapters Selected Topics Benefits to Users
Chapter 17 Cash collection and disbursement. Examination of systems used by firms to handle cash
inflows and outflows.
Credit management. Analysis of credit policy and implementation.
Inventory management. Brief overview of important inventory concepts.
xi
Learning Solutions
I n addition to illustrating relevant concepts and presenting up-to-date coverage, Essen-
tials of Corporate Finance strives to present the material in a way that makes it engag-
ing and easy to understand. To meet the varied needs of the intended audience, Essentials
of Corporate Finance is rich in valuable learning tools and support.
Each feature can be categorized by the benefit to the student:
■ Real financial decisions
■ Application tools
■ Study aids
been U.S. Treasury bonds. And low risk meant that U.S. Treasury
real-world event to introduce students to learning objectives bonds paid a lower return, or “yield,” than other bonds. However,
chapter concepts. After studying this chapter, you should
in February 2010, insurer Berkshire Hathaway issued bonds with a
be able to: lower promised yield than Treasury bonds. Berkshire Hathaway was
LO 1 Identify important bond features not alone: Proctor & Gamble, Johnson & Johnson, and Lowe’s all
and types of bonds. were able to sell bonds with lower promised yields.
LO 2 Describe bond values and why
So what happened? Apparently, the bond market was saying
they fluctuate.
LO 3 Discuss bond ratings and what that these four corporations had lower risk than the U.S. govern-
they mean. ment. In August 2011, credit rating agency S&P agreed when it
LO 4 Evaluate the impact of inflation on
lowered the credit rating on U.S. Treasury bonds from the vaunted
interest rates.
LO 5 Explain the term structure of AAA. Other countries had similar experiences. About the same time,
interest rates and the determinants Japan’s government debt was downgraded, and on a single day
of bond yields
FINANCE M AT T ER S CHA PTER 4 Introduction to Valuation: The Time Value of Money news on the 111
topics covered
in this chapter,
scan here.
Collectibles as Investments?
ample, in 2011, an 1855-S Indian Head gold $3 coin sold for remain in existence. In 2011, a blue two pence version of the
$1,322,500. While that looks like a whopping price increase stamp sold for £1,053,090 (about $1,645,000). Assuming two
to the untrained eye, check for yourself that the actual return pence is equal to two cents, see for yourself that this repre-
on the investment was only about 8.69 percent per year. Not sents an annual return of about 11.75 percent.
xii
CHAPTER CASES
Located at the end of most chapters, these cases focus on hy-
APPLICATION TOOLS
pothetical company situations that embody corporate finance
topics. Each case presents a new scenario, data, and a dilemma.
Because there is more than one way to
Several questions at the end of each case require students to
analyze and focus on all of the material they learned from the solve problems in corporate finance, we
chapters in that part. Great for homework or in-class exercises include many sections that encourage
and discussions! students to learn or brush up on
different problem-solving methods,
including financial calculator and Excel
CHAPTER CASE spreadsheet skills.
FINANCING S&S AIR’S EXPANSION
PLANS WITH A BOND ISSUE
million in new 10-year bonds to finance construc- nata’s assistant, and she has asked you to prepare
tion. Chris has entered into discussions with Renata a memo to Chris describing the effect of each of the
Harper, an underwriter from the firm of Crowe & Mal- following bond features on the coupon rate of the
lard, about which bond features S&S Air should con- bond. She would also like you to list any advantages
sider and what coupon rate the issue will likely have. or disadvantages of each feature.
QUESTIONS
1. The security of the bond, that is, whether the 6. A make-whole call provision.
bond has collateral. 7. Any positive covenants. Also, discuss several pos-
2. The seniority of the bond. sible positive covenants S&S Air might consider.
3. The presence of a sinking fund. 8. Any negative covenants. Also, discuss several pos-
4. A call provision with specified call dates and call sible negative covenants S&S Air might consider.
prices. 9. A conversion feature (note that S&S Air is not a
5. A deferred call accompanying the above call publicly traded company).
provision. 10. A floating rate coupon.
B ond quotes have become more available with the rise of the web. One site where you can find
current bond prices (from TRACE) is cxa.marketwatch.com/finra/BondCenter. We went to the
site and entered “Dell” for the well-known computer manufacturer. We found a total of 14 bond
issues outstanding. Below you will see the information we pulled up.
Most of the information is self-explanatory. The price and yield columns show the price and
yield to maturity of the issues based on their most recent sales. If you need more information
about a particular issue, clicking on it will give you more details such as coupon dates and call
dates.
Questions
1. Go to this website and find the last bond shown above. When was this bond issued?
What was the size of the bond issue? What were the yield to maturity and price when
the bond was issued?
2. When you search for Chevron bonds (CVX), you will find bonds for several com-
panies listed. Why do you think Chevron has bonds issued with different corporate
names?
How to Calculate Present Values with Multiple Future CALCULATOR CALCULATOR HINTS
Cash Flows Using a Financial Calculator HINTS
Calculator Hints is a self-
To calculate the present value of multiple cash flows with a financial calculator, we will simply discount
the individual cash flows one at a time using the same technique we used in our previous chapter, so contained section occurring
this is not really new. There is a shortcut, however, that we can show you. We will use the numbers in
Example 5.3 to illustrate.
in various chapters that first
To begin, of course, we first remember to clear out the calculator! Next, from Example 5.3, the introduces students to calcula-
first cash flow is $200 to be received in one year and the discount rate is 12 percent, so we do the
following:
ros34752_ch14_451-480.indd 479
tor basics and then illustrates 12/11/12 6:36 PM
Enter 1 12 200
how to solve problems with the
N I/ Y PMT PV FV calculator. Appendix D goes
Solve for 2178.57 into more detailed instructions
Now, you can write down this answer to save it, but that’s inefficient. All calculators have a memory by solving problems with two
where you can store numbers. Why not just save it there? Doing so cuts way down on mistakes be-
cause you don’t have to write down and/or rekey numbers, and it’s much faster. specific calculators.
A B C D E F
1
2 Using a spreadsheet to value multiple cash flows
SPREADSHEET STRATEGIES 3
4 What is the present value of $200 in one year, $400 the next year, $600 the next year, and
The unique Spreadsheet Strategies fea- 5 $800 the last year if the discount rate is 12 percent?
6
ture is also in a self-contained section, 7 Rate: .12
xiv
STUDY AIDS
LEARNING OBJECTIVES learning objectives
Each chapter begins with a After studying this chapter, you should
number of learning objectives be able to: We want students to get the most from
that are key to the student’s LO 1 Standardize financial statements
for comparison purposes.
this book and this course, and we realize
understanding of the chapter. LO 2 Compute and, more important, that students have different learning
Learning objectives are also interpret some common ratios.
LO 3 Assess the determinants of a styles and study needs. We therefore
linked to end-of-chapter firm’s profitability and growth.
problems and test bank LO 4 Identify and explain some of the
present a number of study features to
questions.
problems and pitfalls in financial
statement analysis. appeal to a wide range of students.
endsheets.
CONCEPT QUESTIONS
Chapter sections are intentionally kept short to
promote a step-by-step, building-block approach to
ros34752_ch03_052-096.indd 85
CONCEPT QUESTIONS
12/11/12 5:16 PM
of short concept questions that highlight the key 3.4b What does a firm’s sustainable growth rate tell us?
3.4c Why is the sustainable growth rate likely to be larger than the internal growth rate?
ideas just presented. Students use these questions
to make sure they can identify and understand the
most important concepts as they read.
xv
EXAMPLE 11.4 PORTFOLIO VARIANCE AND STANDARD DEVIATION
NUMBERED EXAMPLES In Example 11.3, what are the standard deviations on the two portfolios? To answer, we first have
to calculate the portfolio returns in the two states. We will work with the second portfolio, which has
Separate numbered and titled examples are 50 percent in Stock A and 25 percent in each of Stocks B and C. The relevant calculations can be
extensively integrated into the chapters. These summarized as follows:
illustrations of the text material in a step- Economy of State Stock A Stock B Stock C Portfolio
provide both detail and explanation. s2 5 .40 3 (.1375 − .085)2 1 .60 3 (.05 − .085)2
5 .0018375
Total Debt Ratio The total debt ratio takes into account all debts of all maturities to KEY EQUATIONS
all creditors. It can be defined in several ways, the easiest of which is:
Total assets 2 Total equity These are called out in the text and identi-
Total debt ratio 5 ____________________________
Total assets
$3,588 2 2,591
[3.4] fied by equation numbers. Appendix B
5 _________________ 5 .28 times
$3,588 shows the key equations by chapter.
xvi
POP QUIZ!
finance
Can you answer the following questions? If your class is using Connect
Finance, log on to the Self-Quiz and Study feature in the Library tab to see
CONNECT POP QUIZ if you know the answers to these and other questions, check out the study
New to this edition, this end-of-chapter tools, and find out what topics require additional practice!
feature gives students a quick glimpse into Section 4.1 If you deposit $4,500 in an IRA, earn a 10.55 percent rate of
return, and make no additional contributions, how much will that account be
how close they are to mastering the mate- worth in 44 years?
rial. Students test their knowledge with Section 4.2 If you want to be a millionaire upon your retirement in 45 years,
practice questions from McGraw-Hill’s how much do you need to invest today? Assume an 11.20 percent annual
return, and no additional contributions.
Self-Quiz and Study program. This can be Section 4.3 At 4.75 percent interest, how long does it take to double your money?
a great way to engage your Connect-using
students!
ros34752_ch04_097-121.indd 116 The discounted cash flow analysis we’ve covered here is a standard tool in the business12/11/12 5:27 PM
world. It is a very powerful tool, so care should be taken in its use. The most important
thing is to get the cash flows identified in a way that makes economic sense. This chapter
gives you a good start on learning to do this.
answers to the self-test problems im- normally run 70 percent of sales, or about $1,002 in this case. The depreciation
expense will be $80, and the tax rate is 34 percent. What is the operating cash
mediately follow. These questions and flow? (See Problem 9.)
9.2 Scenario Analysis. A project under consideration costs $500,000, has a
answers allow students to test their abili- five-year life, and has no salvage value. Depreciation is straight-line to zero. The
ties in solving key problems related to required return is 15 percent, and the tax rate is 34 percent. Sales are projected at
www.mhhe.com/ r wj
400 units per year. Price per unit is $3,000, variable cost per unit is $1,900, and
the content of the chapter. New to this fixed costs are $250,000 per year. No net working capital is required.
edition, these problems are mapped to Suppose you think the unit sales, price, variable cost, and fixed cost projections
are accurate to within 5 percent. What are the upper and lower bounds for these pro-
similar problems in the end-of-chapter jections? What is the base-case NPV? What are the best- and worst-case scenario
NPVs? (See Problem 19.)
material. The aim is to help students work
through difficult problems using the au-
■ Answers to Chapter Review and Self-Test Problems
thors’ work as an example.
9.1 First, we can calculate the project’s EBIT, its tax bill, and its net income.
EBIT 5 $1,432 − 1,002 – 80 5 $350
Taxes 5 $350 3 .34 5 $119
Net income 5 $350 − 119 5 $231
With these numbers, operating cash flow is:
OCF 5 EBIT 1 Depreciation − Taxes
END-OF-CHAPTER QUESTIONS 5 $350 1 80 − 119
5 $311
AND PROBLEMS
We have found that many students learn
www.mh he.c
to practice. We therefore provide extensive LO 1 1. Relevant Cash Flows. Kenny, Inc., is looking at setting up a new manufacturing
Basic
end-of-chapter questions and problems— (Questions 1–20)
plant in South Park. The company bought some land six years ago for $7.5 million
in anticipation of using it as a warehouse and distribution site, but the company has
now linked to Learning Objectives. The since decided to rent facilities elsewhere. The land would net $10.3 million if it were
sold today. The company now wants to build its new manufacturing plant on this
questions and problems are generally sepa- land; the plant will cost $24 million to build, and the site requires $975,000 worth of
rated into three levels—Basic, Intermediate, grading before it is suitable for construction. What is the proper cash flow amount to
use as the initial investment in fixed assets when evaluating this project? Why?
and Challenge. All problems are fully anno- LO 1 2. Relevant Cash Flows. Winnebagel Corp. currently sells 28,000 motor homes
per year at $73,000 each and 7,000 luxury motor coaches per year at $115,000 each.
tated so that students and instructors can The company wants to introduce a new portable camper to fill out its product line;
readily identify particular types. Throughout it hopes to sell 29,000 of these campers per year at $18,500 each. An independent
consultant has determined that if Winnebagel introduces the new campers, it should
the text, we have worked to supply interest- boost the sales of its existing motor homes by 2,500 units per year and reduce the
sales of its motor coaches by 750 units per year. What is the amount to use as the
ing problems that illustrate real-world ap- annual sales figure when evaluating this project? Why?
plications of chapter material. Answers to LO 2 3. Calculating Projected Net Income. A proposed new investment has projected
sales of $750,000. Variable costs are 55 percent of sales, and fixed costs are $182,500;
selected end-of-chapter problems appear depreciation is $86,000. Prepare a pro forma income statement assuming a tax rate of
in Appendix C. 35 percent. What is the projected net income?
xvii
Comprehensive Teaching
and Learning Package
T his edition of Essentials has more options than ever in terms of the textbook, instruc-
tor supplements, student supplements, and multimedia products. Mix and match to
create a package that is perfect for your course!
INSTRUCTOR SUPPLEMENTS
Assurance of Learning Ready
Assurance of learning is an important element of many accreditation standards. Essentials
of Corporate Finance, 8e, is designed specifically to support your assurance of learning
initiatives. Each chapter in the book begins with a list of numbered learning objectives
which appear throughout the chapter, as well as in the end-of-chapter problems and ex-
ercises. Every test bank question is also linked to one of these objectives, in addition to
level of difficulty, topic area, Bloom’s Taxonomy level, and AACSB skill area. Connect,
McGraw-Hill’s online homework solution, and EZ Test, McGraw-Hill’s easy-to-use test
bank software, can search the test bank by these and other categories, providing an engine
for targeted Assurance of Learning analysis and assessment.
AACSB Statement
The McGraw-Hill Companies is a proud corporate member of AACSB International.
Understanding the importance and value of AACSB Accreditation, Essentials of Corpo-
rate Finance, 8e, has sought to recognize the curricula guidelines detailed in the AACSB
standards for business accreditation by connecting selected questions in the test bank to the
general knowledge and skill guidelines found in the AACSB standards.
The statements contained in Essentials of Corporate Finance, 8e, are provided only
as a guide for the users of this text. The AACSB leaves content coverage and assessment
within the purview of individual schools, the mission of the school, and the faculty. While
Essentials of Corporate Finance, 8e, and the teaching package make no claim of any spe-
cific AACSB qualification or evaluation, we have, within the test bank, labeled selected
questions according to the six general knowledge and skills areas.
Instructor Supplements
■ Instructor’s Manual (IM)
Prepared by Denver Travis, Eastern Kentucky University
A great place to find new lecture ideas! This annotated outline for each chapter
includes Lecture Tips, Real-World Tips, Ethics Notes, suggested PowerPoint slides,
and, when appropriate, a video synopsis.
■ Solutions Manual (SM)
Prepared by Joseph Smolira, Belmont University
The Essentials Solutions Manual provides detailed solutions to the extensive end-
of-chapter material, including concept review questions, quantitative problems, and
cases. Select chapters also contain calculator solutions.
xviii
■ Test Bank
Prepared by LaDoris Baugh and Michael Essary, Athens State University
Great format for a better testing process! All questions closely link with the text
material, listing section number, Learning Objective, Bloom’s Taxonomy Question
Type, and AACSB topic when applicable. Each chapter is divided into five parts.
Part I contains questions that test the understanding of the key terms in the book.
Part II includes questions patterned after the learning objectives, concept questions,
chapter-opening vignettes, boxes, and highlighted phrases. Part III contains multiple-
choice and true/false problems patterned after the end-of-chapter questions, in basic,
intermediate, and challenge levels. Part IV provides essay questions to test problem-
solving skills and more advanced understanding of concepts. Part V is a new section
that picks up questions directly from the end-of-chapter material and converts them
into parallel test bank questions. For your reference, each test bank question in this
part is linked with its corresponding question in the end-of-chapter section. Also
included are ready-made quizzes to hand out in class.
■ Computerized Test Bank (Windows)
Create your own tests in a snap! These additional questions are found in a
computerized test bank utilizing McGraw-Hill’s EZ Test testing software to quickly
create customized exams. This user-friendly program allows instructors to sort
questions by format, edit existing questions or add new ones, and scramble questions
for multiple versions of the same test.
■ PowerPoint Presentation System
Prepared by Denver Travis, Eastern Kentucky University
Customize our content for your course! This presentation has been thoroughly
revised to include more lecture-oriented slides, as well as exhibits and examples
both from the book and from outside sources. Applicable slides have web links that
take you directly to specific Internet sites or spreadsheet links to show an example
in Excel. You can also go to the Notes Page function for more tips in presenting the
slides. New to this edition, additional PPT slides work through example problems
for instructors to show in class. If you already have PowerPoint installed on your
PC, you have the ability to edit, print, or rearrange the complete presentation to meet
your specific needs.
ONLINE SUPPORT
Online Learning Center at www.mhhe.com/rwj
The Online Learning Center (OLC) contains free access to additional web-based study and
teaching aids created for this text, such as:
■ Student Support
A great resource for those seeking additional practice, students can access self-
grading quizzes, Excel template problems, and the Excel Master tutorial designed by
Brad Jordan and Joe Smolira.
xix
■ Premium Content Access
Narrated PowerPoint Slides Updated by Kay Johnson. The narrated PowerPoints
provide real-world examples accompanied by step-by-step instructions and
explanations for solving problems presented in the chapter. The Concept Checks
from the text are also integrated into the slides to reinforce the key topics in the
chapter. Designed specifically to appeal to different learning styles, the slides provide
a visual and audio explanation of topics and problems. Click on the slide and listen
to the accompanying narration! You can view this slide via computer or download it
onto your mobile device.
■ Teaching Support
Along with having access to all of the same material your students can view on the
book’s OLC, you also have password-protected access to the Instructor’s Manual,
solutions to end-of-chapter problems and cases, Instructor’s Excel Master, Instructor’s
PowerPoint, Excel template solutions, video clips, and video projects and questions.
WebCT and Blackboard course cartridges allow instructors to manage their course
and administer examinations online. Increase ease, organization, and efficiency and
ask your representative for more details about course cartridges today!
McGraw-Hill Connect Finance Features Connect Finance offers powerful tools and
features to make managing assignments easier, so faculty can spend more time teaching.
With Connect Finance, students can engage with their coursework anytime and anywhere,
making the learning process more accessible and efficient. Connect Finance offers you the
features described below.
Smart Grading When it comes to studying, time is precious. Connect Finance helps
students learn more efficiently by providing feedback and practice material when they need
it, where they need it. When it comes to teaching, your time is also precious. The grading
function enables you to:
■ Have assignments scored automatically, giving students immediate feedback on their
work and side-by-side comparisons with correct answers.
xx
■ Access and review each response; manually change grades or leave comments for
students to review.
■ Reinforce classroom concepts with practice tests and instant quizzes.
Instructor Library The Connect Finance Instructor Library is your repository for ad-
ditional resources to improve student engagement in and out of class. You can select and
use any asset that enhances your lecture.
Student Study Center The Connect Finance Student Study Center is the place for stu-
dents to access additional resources. The Student Study Center:
■ Offers students quick access to lectures, practice materials, eBooks, and more.
■ Provides instant practice material and study questions, easily accessible on the go.
■ Gives students access to the Self-Quiz and Study plan described below.
Connect Self-Quiz and Study Feature This Study Feature connects each student to the
learning resources needed for success in the course. For each chapter, students:
■ Take a practice test to gauge understanding of the material.
■ Immediately upon completing the practice test, see how their performance compares
to the chapter objectives to be achieved within each section of the chapters.
■ Receive a personal learning plan that recommends specific readings from the text,
supplemental study material, and practice work that will improve their understanding
and mastery of each learning objective.
Student Progress Tracking Connect Finance keeps instructors informed about how
each student, section, and class is performing, allowing for more productive use of lecture
and office hours. The progress-tracking function enables you to:
■ View scored work immediately and track individual or group performance with
assignment and grade reports.
■ Access an instant view of student or class performance relative to learning objectives.
Lecture Capture through Tegrity Campus For an additional charge, Lecture Capture
offers new ways for students to focus on the in-class discussion, knowing they can revisit
important topics later. This can be delivered through Connect or separately. See below for
more details.
McGraw-Hill Connect Plus Finance McGraw-Hill reinvents the textbook learning ex-
perience for the modern student with Connect Plus Finance. A seamless integration of an
eBook and Connect Finance, Connect Plus Finance provides all of the Connect Finance
features plus the following:
■ An integrated eBook, allowing for anytime, anywhere access to the textbook.
■ Dynamic links between the problems or questions you assign to your students and
the location in the eBook where that problem or question is covered.
■ A powerful search function to pinpoint and connect key concepts in a snap.
xxi
practice, assessment, and remediation for every concept in the textbook. LearnSmart’s intel-
ligent software adapts to every student response and automatically delivers concepts that
advance the student’s understanding while reducing time devoted to the concepts already
mastered. The result for every student is the fastest path to mastery of the chapter concepts.
LearnSmart:
■ Applies an intelligent concept engine to identify the relationships between concepts
and to serve new concepts to each student only when he or she is ready.
■ Adapts automatically to each student, so students spend less time on the topics they
understand and practice more those they have yet to master.
■ Provides continual reinforcement and remediation, but gives only as much guidance
as students need.
■ Integrates diagnostics as part of the learning experience.
■ Enables you to assess which concepts students have efficiently learned on their own,
thus freeing class time for more applications and discussion.
In short, Connect Finance offers you and your students powerful tools and features that
optimize your time and energies, enabling you to focus on course content, teaching, and
student learning. Connect Finance also offers a wealth of content resources for both in-
structors and students. This state-of-the-art, thoroughly tested system supports you in pre-
paring students for the world that awaits.
xxii
Acknowledgments
C learly, our greatest debt is to our many colleagues (and their students) around the
world who, like us, wanted to try an alternative to what they were using and made the
switch to our text. Our plan for developing and improving Essentials, 8e, revolved around
the detailed feedback we received from many of our colleagues who had an interest in the
book and regularly teach the introductory course. These dedicated scholars and teachers to
whom we are very grateful are:
Vaughn S. Armstrong, Utah Valley University
Juan Avendano, Augsburg College
R. Brian Balyeat, Xavier University
John Barkoulas, Georgia Southern University
Laura Beal, University of Nebraska at Omaha
Stephen G. Buell, Lehigh University
Manfen Chen, University of Southern Indiana
Su-Jane Chen, Metropolitan State College of Denver
Ingyu Chiou, Eastern Illinois University
Paul Chiou, Shippensburg University
Brandon Cline, Clemson University
Susan Coleman, University of Hartford
Bruce A. Costa, University of Montana
Maria E. de Boyrie, New Mexico State University
David Dineen, Seton Hall University
Alan Eastman, Indiana University of Pennsylvania
David Eckmann, University of Miami
Dan Ervin, Salisbury University
Jocelyn Evans, College of Charleston
Ramon T. Franklin, Clemson University
Sharon H. Garrrison, University of Arizona
Victoria Geyfman, Bloomsburg University of Pennsylvania
Kimberly R. Goodwin, University of Southern Mississippi
Michael Gunderson, University of Florida
Karen L. Hamilton, Georgia Southern University
Mahfuzul Haque, Indiana State University
John J. Harrington Jr., Seton Hall University
John Hatem, Georgia Southern University
Rodrigo Hernandez, Radford University
Keith Jakob, University of Montana
Abu Jalal, Suffolk University
Marlin Jensen, Auburn University
Samuel Kyle Jones, Stephen F. Austin State University
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xxiv A C K N O WL E D G M E NT S