The Law of One Price: A Unifying Principle of Valuation. The Law of One Price is used as a framework, reflecting the modern idea that the absence of arbitrage is the unifying concept in valuation. This theme is explicitly introduced in Chapter 3, “Arbitrage and Financial Decision Making,” revisited in each Part Opener, and integrated throughout the text--motivating all major concepts. This methodology directly connects theory to practice, and unifies what might appear to students as disparate topics that comprise the course syllabus (corporate finance, investments, valuation).

Teaching Students to Think Finance. In each chapter, an innovative set of learning aids teaches every student how to 'think finance.' Problem-solving study aids include:

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  Common Mistakes boxes point to frequently made errors stemming from misunderstood core concepts and calculations, as well as mistakes made in practice.

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  Worked Examples accompany every important concept using a procedure that illustrates both the Problem and the step-by-step Solution.

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  With a simplified presentation of mathematics, this text breaks the sink-or-swim trend found in most texts by systematically using Notation Boxes as well as Numbered and Labeled Equations.

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  Timelines are introduced in Chapter 4, “The Time Value of Money,”and consistently used throughout the book when appropriate. Stressing the importance of creating timelines for every problem that involves cash flows, each worked example involving a cash flow includes a timeline as the critical first step.

  
  

•   Practitioner interviews
•   Real-company chapter-opening examples
•   Boxes that show concepts at work in business