1. Definitions and explanations that are clear and concise.

2. Examples that illustrate the concepts and techniques discussed in each chapter.

3. Review questions and answers.

4. Detailed solutions to representative problems covering the subject matter.

5. Comprehensive examinations, with solutions, to test the student's knowledge of each chapter; the
exams are representative of those used by 2- and 4-year colleges and M.B.A. programs.

In line with the development of the subject, two professional designations are noted. One is the
Certificate in Management Accounting (CMA), which is a recognized certificate for both management
accountants and financial managers. The other is the Chartered Financial Analyst (CFA), established by
the Institute of Chartered Financial Analysts. Students who hope to be certified by either of these
organizations may find this outline particularly useful.

This book was written with the following objectives in mind:

1. To supplement formal training in financial management courses at the undergraduate and graduate
levels. It therefore serves as an excellent study guide.

2. To enable students to prepare for the business finance portion of such professional examinations as the CMA and CFA examinations. Hence it is a valuable reference source for review and self-testing.

This edition expands in scope to cover new developments in finance such as agency problems, the Aribitrage Pricing Model (APM), financial derivatives such as options, the Black-Scholes Option Pricing Model. It updates tax changes such as Modified Accelerated Cost Recovery System (MACRS). A new chapter, Multinational Finance, is added.

Financial Management was written to cover the common denominator of managerial finance topics
after a thorough review was made of the numerous managerial finance, financial management,
corporate finance, and business finance texts currently available. It is, therefore, comprehensive in
coverage and presentation. In an effort to give readers a feel for the types of questions asked on the
CMA and CFA examinations, problems from those exams have been incorporated within this book.
Our appreciation is extended to the National Association of Accountants and the Institute of Chartered
Financial Analysts for their permission to incorporate their examination questions in this book. Selected
materials from the CMA examinations, copyrighted by the National Association of Accountants, bear the notation (CMA,
adapted). Problems from the CFA examinations bear the notation (CFA, adapted).