Side Note

to the book itself. Every instructor can therefore choose his/her own favorite selection and ask students to download it. These chapters are free and access is easy. The menu right now contains the following chapters:

Real Options: Real options are briefly covered in Chapter 12 in the text, but not in great detail. This web chapter shows how to use spreadsheets, time-series analysis, Monte Carlo simulation, and optimization to determine the value of a plant that can shut down and reopen (for a cost) as output prices fluctuate. Ethics: This chapter is experimental—and provocative. There is neither a particular set of must-cover topics nor a template on how to present this material. Your choices and views may differ from mine. However, I believe that ethical considerations are too important for them never to be raised. Capital Structure Event Studies: This chapter describes the evidence (up-to-2003!) of how the stock market reacts to the announcements of new debt offerings, new equity offerings, and dividend payments.

This abbreviated version of the book also omits some "special topics" chapters that are in the full corporate finance textbook:

>- Capital Structure Change, Issuing Securities, Investment Banking, and M&A.

>- Capital Structure Patterns in the United States.

>- International Finance.

>- Corporate Governance.

The title of the book is optimistic. A one-quarter course cannot cover the vast field that our profession has created over the last few decades. The book requires at least a one semester course. As already noted, a more realistic goal is to cover the 20 chapters from Parts I through VI, omitting the special topics in Part VII. A better solution would be to offer a full two-quarter sequence in finance—although I would then recommend that the latter type of course sequence use the "general survey" version of this book, which goes into more detail in the investments part.

I hope that this book will become your first choice in finance textbooks. If you do not like it, please drop me an email to let me know where it falls short. I would love to learn from you. (And even if I disagree, chances are that your comments will influence my next revision.)

If you use this book or some chapters therefrom, please permit me to use and post your homework and exam questions with answers. (Of course, this is not a requirement, only a plea for help.) My intent is for the Website to become collaborative: you will be able to see what other faculty do, and they can see what you do. The copyright will of course remain with you.

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