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The corporate finance text book ‘Financial Management: Theory & Practice’ by Prof. Eugene F. Brigham and Prof. Michael C. Ehrhardt is a popular text book at the graduate and undergraduate level. Our finance tutors have always emphasized that valuation is the essence of corporate finance as seen in our valuation infographic here. Brigham and Ehrhardt have also made valuation the unifying theme of their financial management text book.

At over a 1000 pages long, this text book ‘Financial Management: Theory & Practice’ by Brigham and Ehrhardt is a comprehensive introduction to corporate finance. It starts with the introductory topics of financial statements and the time value of money but goes all the way to real options and derivatives. You maybe biting more than you can chew if you only want an introduction. In-fact even most MBA introductory corporate finance courses that prescribe this text book do not cover all the chapters in this text book and instead select some of the chapters to cover. If you are looking for an easy read on intrinsic valuation, The ABCs of DCF Valuation and Modeling maybe what you are looking for.

Tutoring for Financial Management by Brigham and Ehrhardt

We provide corporate finance tutoring for the topics covered in the corporate finance text book titled ‘Financial Management: Theory & Practice’ by Brigham and Ehrhardt. We believe that this is an excellent corporate finance text book despite Goodreads and Amazon reviewers rating this text book at only 3.5 stars. This not so great rating maybe because of the length of the text book and the level of detail make it difficult for readers to grasp the underlying concepts during their first read.

A number of universities use this corporate finance text book. Here are some examples:

Financial Management Topics Covered by Brigham and Ehrhardt

Topics covered in ‘Financial Management: Theory & Practice’ by Brigham and Ehrhardt include:

  • An Overview of Financial Management and the Financial Environment.
  • Financial Statements, Cash Flow, and Taxes.
  • Analysis of Financial Statements.
  • Time Value of Money.
  • Bonds, Bond Valuation, and Interest Rates.
  • Risk and Return.
  • Valuation of Stocks and Corporations.
  • Financial Options and Applications in Corporate Finance.
  • The Cost of Capital.
  • Basics of Capital Budgeting: Evaluating Cash Flows.
  • Cash Flow Estimation and Risk Analysis.
  • Corporate Valuation and Financial Planning.
  • Corporate Governance.
  • Distributions to Shareholders: Dividends and Repurchases.
  • Capital Structure Decisions.
  • Supply Chains and Working Capital Management.
  • Multinational Financial Management.
  • Public and Private Financing: Initial Offerings, Seasoned Offerings, and Investment Banks.
  • Lease Financing.
  • Hybrid Financing: Preferred Stock, Warrants, and Convertibles.
  • Dynamic Capital Structures.
  • Mergers and Corporate Control.
  • Enterprise Risk Management.
  • Bankruptcy, Reorganization, and Liquidation. Web Extensions.
  • Portfolio Theory and Asset Pricing Models.
  • Real Options.

The topics covered are ones found in most finance text books. However, in addition to the chapters, this text book has a number of additional resources to draw from for those MBA or CFA students or professionals willing to put more time into studying corporate finance.

Financial Management Emphasizes Microsoft Excel

This text book has many Microsoft Excel worksheets call ‘Excel Tool Kits’ accompanying each chapter to help the students see how the solutions are built in Excel. This is important give that Excel is a basic skill requirement in the corporate world. We as MBA and Finance tutors also support student with free Microsoft Excel boot camps every quarter.

Web Extensions for Financial Management

This text book is more than a 1000 pages! It does not stop there. This text book is supported by Web extensions on a variety of topics. Web extensions include:

  • An Overview of Derivatives.
  • A Closer Look at the Stock Markets.
  • The Federal Income Tax System for Individuals.
  • The Tabular Approach.
  • Derivation of Annuity Formulas.
  • Continuous Compounding.
  • A Closer Look at Zero Coupon Bonds.
  • A Closer Look at TIPS: Treasury Inflation-Protected Securities.
  • A Closer Look at Bond Risk: Duration.
  • The Pure Expectations Theory and Estimation of Forward Rates.
  • Continuous Probability Distributions.
  • Estimating Beta with a Financial Calculator.
  • Derivation of Valuation Equations.
  • The Required Return Assuming Nonconstant Dividends and Stock. Repurchases.
  • The Accounting Rate of Return (ARR).
  • Certainty Equivalents and Risk-Adjusted Discount Rates.
  • Degree of Leverage.
  • Secured Short-Term Financing.
  • Rights Offerings.
  • Leasing Feedback.
  • Percentage Cost Analysis.
  • Leveraged Leases.
  • Calling Convertible Issues.
  • Projecting Consistent Debt and Interest Expenses.
  • Multiple Discriminant Analysis.
  • The Abandonment Real Option.
  • Risk-Neutral Valuation.

Web chapter that are more comprehensive than Web extensions include:

  • Providing and Obtaining Credit.
  • Advanced Issues in Cash Management and Inventory Control.
  • Pension Plan Management.
  • Financial Management in Not-for-Profit Businesses.

In addition to Microsoft Excel tool kits, Web extensions, Interactive study centers and Mindmaps for students, there are exclusive resources available to registered instructors. These include solution manuals, PowerPoint slides, Mini Case spreadsheets, Test banks, CengageNOW, Apilia, The Cengage Global Economic Watch Resource Center, etc.

Eugene F. Brigham

Professor Eugene F. Brigham is the Director Emeritus of the Public Utility Research Center at the University of Florida. He was the founding director of the Public Utility Research Center and has also served the country through his role in the U.S. Navy during the Korean War. He has contributed to the faculty of UC Berkeley, UCLA and the University of Wisconsin, and Florida. He has written more than 40 journal articles on the cost of capital, capital structure, and other aspects of financial management, His ten textbooks on managerial finance and managerial economics of which he is the author or co-author are used at more than 1,000 universities in the United States and have been translated into 12 languages!

Mike Ehrhardt

Professor Mike Ehrhardt is a Professor Emeritus at the University of Tennessee and is a Faculty member in the Professional MBA program and the Executive MBA for Healthcare Leadership program at the University of Tennessee. His research is in the areas of corporate valuation and asset pricing models, including pricing models for interest-rate sensitive instruments.  His work has been published in numerous journals, including The Journal of FinanceJournal of Financial and Quantitative AnalysisFinancial ManagementThe Financial ReviewThe Journal of Financial Research, and The Journal of Banking and Finance.

We provide corporate finance tutoring for the topics covered in the corporate finance text book titled ‘Financial Management: Theory & Practice’ by Brigham and Ehrhardt.