Preface
Welcome to Corporate Finance v3.0! Whether it’s your first time teaching or you are an experienced professor of finance, these course materials are probably unlike any that you have used in your career. Throughout the authors’ combined fifty-plus years of teaching introductory finance, they noticed some dramatic changes in how students learn and how you teach their course. We created Corporate Finance to address these sweeping changes in the teaching and learning process.
Technology: Transforming Learning
The current generation of students (born after 1995) are the iGeneration. So named because they were virtually born with a smartphone in hand. iGeneration students spend time outside of class on console gaming, watching YouTube videos, and on apps like SnapChat, TikTok, Facebook, and X. Today’s students are intolerant of nonengaging teaching techniques. They expect their learning resources to be digital, graphic, and wireless. We created Corporate Finance to meet the expectations of iGeneration students and so enhance their engagement in learning finance.
When creating this book, we weighed carefully which type of multimedia would best communicate and assess the information that students need to know and how you want to teach them. As a result, we leverage technology to make learning finance as easy and fun as possible.
Let Corporate Finance Teach the Mechanics through Video Presentations
Education has two stages: (1) information transfer and (2) assimilation. The assimilation stage is when students make their own mental model of the ideas. In traditional introductory finance courses, a lot of class time is spent teaching students the mathematical computations (information transfer) and not much time is left for teaching the application (assimilation).
Corporate Finance is designed to shoulder the burden of teaching the formulas and computations. That way, you can use your class time to teach problem solving, analyze cases, or discuss current financial events. This design allows Corporate Finance to be used successfully in a traditional lecture-style course and equally well in online courses, hybrid courses, or flipped classrooms.
Corporate Finance’s key technological advantage lies in the wealth of author-recorded videos embedded in the digital text. The combination of text and video gives students multiple explanations for each idea so if they don’t understand one, they have recourse to another. This teaching design greatly reduces learner frustration.
There are over three hundred author-generated videos strategically placed throughout the text. Each video is between 1–5 minutes in length and can be used to introduce topics, explain operations, and provide 24/7 review so that students can learn anytime and anywhere they have live web connection. These embedded videos are divided into three categories:
‘Explain It’ videos demonstrate key concepts and clarify topics that typically confuse learnings.
‘Explore It’ videos provide richer context for an operation or calculation to illuminate the concept behind the mechanics.
Solutions videos provide detailed explanations of solutions to examples in three ways: algebra, calculator, and downloadable Excel spreadsheet templates. The first shows the general approach to the solution, the algebra involved, and explains the intuition behind the solution. The other two solutions videos show the mechanics of the solution with either a financial calculator or Excel.
Finally, if you want your students to learn spreadsheet basics, Corporate Finance gives them the tools to learn them. Most examples have a downloadable spreadsheet template that is accompanied by a video explaining the layout and functions used in the spreadsheet.
What’s New in Version 3.0?
Corporate Finance, v3.0 includes a whole new chapter on mergers and acquisitions. It also includes a new subsection in Chapter 17 “Corporate Valuation” on relative valuation. We’ve included this new subsection in response to feedback from finance sector employers who’ve noted that applicants are often weak at this important valuation technique.
The introduction of the third version now includes a brief explanation of stakeholder capitalism and ESG, both topics much in the news.
Updated financial market data, such as JCPenny’s bankruptcy and the COVID-19 pandemic’s impact
Introduces stakeholder capitalism and ESG (environment, social, government) (Chapter 1, Section 4 “Corporate Governance”)
Clarified discussion of book value of equity and market value (Chapter 2, Section 3 “Financial Statement and Ratio Analysis”)
New Dupont mini-case analysis with video solution (Chapter 2, Section 5 “DuPont Ratio Analysis”)
Earlier discussion of CAPM (capital asset pricing model) (Chapter 6, Section 3 “Systematic Risk”)
Added discussion of Section 179 tax deductibility (Chapter 14, Section 3 “Financial Statements Forecasting”)
New section on relative valuation to shore up a key knowledge gap exhibited by many finance graduates (Chapter 17, Section 5 “Relative Valuation”)
Chapter 18 “Futures and Options” contains new videos explaining the clearinghouse’s role in daily marking-to-market and in reversing (offset) trades. Also new in this chapter is a margin account simulator exercise with a video solution
New chapter on Mergers and Acquisitions (Chapter 19 “Mergers and Acquisitions”)
New and revised homework questions with an expanded number of randomized variants
Supplements
Corporate Finance v3.0 is accompanied by a robust supplements program that augments and enriches both the teaching and student learning experiences all of which are written by the authors. Faculty should contact their FlatWorld sales representative or FlatWorld support at support@flatworld.com for more information or to obtain access to the supplements upon adoption.
FlatWorld Homework
Homework is where the bulk of learning happens, and Corporate Finance makes assigning homework easy. Each chapter in Corporate Finance has fifty to seventy corresponding questions in FlatWorld’s online homework system that is available to adopters and their students at no additional charge. These problems have multiple variations, detailed solutions, and are autograded. With multiple variations of the same problem, students get different numbers. As a result, cheating isn’t as simple as sharing the solution value. We have also found that students won’t attempt problems without detailed solutions to help them better understand how the problem is correctly worked. Every problem has a detailed solution that students can view if they get the answer wrong. Finally, all homework problems are autograded, saving faculty the time-consuming process of hand grading, and student-performance data automatically flow to the associated gradebook. Thus, students receive immediate feedback on their progress and so do you. The gradebook is invaluable in helping to identify and remediate students who procrastinate or underinvest in homework or reading.
There are over fifty new homework problems and hundreds of new homework variants so that almost every homework problem has randomized numbers. The problems are organized by major subsection in FlatWorld Homework and, within each section, by degree of difficulty. The clear organization of problems makes customizing homework easy.
Instructor’s Manual
The Instructor’s Manual (IM) includes chapter overviews and summaries, classroom activities and discussion questions, a quick quiz, and a mini case ideal for flipped class implementation.
PowerPoint Slides
The PowerPoint (PPT) slides include many original examples different from those in the text. These PPT slides have been extensively used by the authors over many years with their own students.
Test Item Files
The Test Item Files (TIF) includes more than fifty questions per chapter in multiple-choice and short answer formats. All answers are provided, including possible responses to the essay questions. The items have been written specifically to reinforce the major topics covered in each chapter and to align with FlatWorld Homework and in-text quiz items. The TIF questions are also available in preformatted form for easy export into popular learning management systems such as Canvas or Blackboard.
Test Generator—Powered by Cognero
FlatWorld is pleased to provide a computer-generated test program powered by the leading assessment provider Cognero to assist instructors with selecting, randomizing, formatting, loading online, or printing exams. Please contact your local FlatWorld representative or FlatWorld support (support@flatworld.com) for more information or to request the program.
Embedded Quizzes and Flashcards: Reading and Comprehension
A trend in university education is that students don’t buy the textbook or, if they do, many don’t read it. A significant proportion of those who read the text lack an effective reading strategy and therefore fail to absorb the main ideas. We have addressed both issues by embedding a large number of self-test questions and flashcards, organized by section, throughout the online reader version of the book. This affords students the opportunity to self-test as they read. Reading comprehension is enhanced by the quizzes, because if students cannot answer the self-test question correctly, then they are immediately alerted that their grasp of the surrounding material is lacking. These online questions promote self-regulation: they empower students to take responsibility for their own learning.
Sample Syllabi
Sample syllabi provide useful templates that help new adopters transition from their current course textbook to Corporate Finance v3.0. Faculty can download the syllabi from the FlatWorld website or they can be obtained by contacting your local FlatWorld representative or FlatWorld support (support@flatworld.com).
Of course, Corporate Finance’s online delivery makes it ideal for online courses. But Corporate Finance can also be used in a variety of in-class formats. In a lecture format, faculty can use videos to supplement their own presentations. Those who want additional class activities can use those supplied in the Instructor’s Manual. Adopting faculty implementing a flipped teaching model can use the online quiz questions embedded in the digital reader or create prelecture quizzes in FlatWorld Homework to motivate before-class reading, the mini cases for classroom activities, and FlatWorld Homework problems (and test bank problems) to generate after-class autograded assignments.
We are confident that Corporate Finance provides all the tools to transform your students to active, engaged learners, and motivates them to continue their studies in finance. We also hope that adopting Corporate Finance makes teaching finance more fun for you. It certainly has for us.
Thank you once again for choosing Corporate Finance.
Sincerely,
Stan Eakins
William McNally