Fully updated and revised by international authorities on the topic, this new version of a classic and established text returns to its roots as a clear and concise introduction to this complex but essential topic in corporate finance.

Retaining the authority and reputation of previous editions, it now covers several topics in-depth which are frequently under explored, including distribution policy and capital budgeting.

Features new to this edition include:

a new chapter on real options

new material on uncertainty in decision-making.

Easily understandable, and covering the essentials of capital budgeting, this book helps readers to make intelligent capital budgeting decisions for corporations of every type.

Table of Contents

1. Investment Decisions and Corporate Objectives 2. The Time Value of Money 3. Capital Budgeting: The Traditional Solutions 4. Mutually Exclusive Investments 5. Annual Equivalent Costs and Replacement Decisions 6. Capital Budgeting Under Capital Rationing 7. The Use of the Weighted Average Cost of Capital and Other Rates of Discount 8. The Capital Assett Pricing Model 9. The Cost of Capital and Capital Structure 10. Distribution Policy and Capital Budgeting 11. A Firm Investing in a Second Firm 12. Investing in Current Assets 13. Foreign Investments 14. The Buy versus Lease Decision 15. An Introduction to Real Options 16. Capital Budgeting and Inflation 17. Reflections on the Capital Budgeting Decision 18. Cases