Fundamentals of Corporate
Finance
13e
Stephen Ross, Randolph Westerfield,
Bradford Jordan
ISBN: 9781265553609 / © 2022
Fundamentals of Corporate Finance was designed and developed for a first course in business orcorporate
finance, for both finance majors and non-majors alike. The text is nearly self-contained in terms of
background or prerequisites, assuming some familiarity with basic algebra and accounting concepts, while
still reviewing important accounting principles very early on. The organization of this text has been
developed to give instructors the flexibility they need.
The best-selling text has three basic themes that are the central focus of the book:
1) An emphasis on intuition: the authors separate and explain the principles at work on a common sense,
intuitive level before launching into any specifics.
2) A unified valuation approach: net present value (NPV) is treated as the basic concept underlying
corporate finance.
3) A managerial focus: the authors emphasize the role of the financial manager as a decision maker, and
they stress the need for managerial input and judgment.
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More Student-Centered
Our authors always put students at the center of every
revision and the new edition is no exception. Extensive
market feedback and a keen focus on optimizing student
outcomes drove this revision. Everything, from the text to
the digital tools and resources, has been updated for
today’s learners.
New in Connect for this Course:
NEW! Integrate Excel – The power of Microsoft Excel meets the power of McGraw Hill Connect in our all new
integration of Excel in Connect. Excel now opens seamlessly inside Connect with no need for uploading or
downloading any additional files or software. Instructors choose their auto-grading solution, either grading for
formula accuracy or the solution value.
NEW! Application Based Activities – These highly interactive, automatically graded exercises provide
students a safe space to practice using problem-solving skills to apply their knowledge to realistic
scenarios. Each scenario addresses key concepts and skills that students must use to work through and
solve course-specific problems, resulting in improved critical thinking and relevant workplace skills.
NEW! Tableau Dashboard Activities – Tableau Dashboard Activities allow students to explore live
Tableau dashboards directly integrated into Connect and include auto-graded questions focused on both
calculations and analysis. Students can check their understanding and apply what they are learning within
the framework of analytics and critical thinking.
NEW! Kaplan CFA Questions – McGraw Hill has partnered with Kaplan Schweser to provide over a thousand
additional sample CFA questions for the CFA exams. These questions represent the kinds of questions that
professionals in the field believe are relevant to the real world. Located in Connect, this bank of assignable
questions is sorted by topic, level, and year of the CFA exam it was included.
New and Updated End-of-Chapter Problems – Reviewed, updated, and introduced new end-of-chapter
material in each chapter to support new topics and learning objectives.
Guided Examples - These videos provide narrated and animated, step-by-step walkthroughs of
algorithmic versions of assigned problems, providing immediate feedback, and focus on the areas
where students need the most guidance. There are 281 NEW Guided Examples in Excel.
Finance Prep Course - Prep Courses cover the basic concepts in Math, Statistics, Accounting, Excel, and
Economics, and are comprised of animated tutorial modules with quiz questions. NEW to the list is
Calculators.
SmartBook 2.0 – Our adaptive reading experience is now more personal, more accessible, more productive,
and mobile.
NEW! VALUE OF CONNECT UPGRADE
•
NEW! More mobility. Free access to the ReadAnywhere app and a Connect Tablet App allows
instructors and students full access to their Connect course, assignments, eBook, and grades, just
like on a laptop browser.
•
NEW! Integration of Proctorio provides remote proctoring, browser-locking capabilities, and
verification options.
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NEW! More instructor flexibility in assigning content & creating review assignments personalized
to students’ weakest areas.
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NEW! Writing Assignment tool.
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Updated technology to replace outdated Adobe Flash.
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Accessibility enhancements.
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More advanced student and class reporting capabilities.
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World-class reliability and platform uptime.
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Option for students to purchase a loose-leaf version of the text at a significant discount.
And, our new partnership with the Online Learning Consortium (OLC) provides an even higher level of
expertise and support to align your course with best practices in online course delivery. Peer-to-Peer
Consultations, On-Demand Toolkits and pre-configured courseware aligned to OLC’s quality scorecard
are all available.
Changes to Ross: Fundamentals of Corporate Finance, 13e
The following grid presents, for each chapter, some of the most significant updates and new
content. Of course, in every chapter, opening vignettes, boxed features, in-chapter illustrated
examples using real companies, and end-of-chapter material have been thoroughly updated as
well.
PART 1 Overview of Corporate Finance
Chapters
Selected Topics of
Interest
CHAPTER 1
Sarbanes-Oxley
Introduction to
Corporate Finance
New: Finance and other
disciplines, including fintech
CHAPTER 2
New: COVID-19 and cash
Financial Statements, flows
Taxes, and Cash Flow New: Personal tax rates
Benefits to You
Up-to-date discussion of SarbanesOxley and its implications and impact.
Discusses how finance interacts with
other business disciplines. Also includes
a discussion of fintech.
Discussion of how COVID-19 has
affected cash flows.
Discusses how personal tax rates affect
sole proprietorships, partnerships, and
LLCs.
PART 2 Financial Statements and Long-Term Financial Planning
Chapters
Selected Topics of
Benefits to You
Interest
CHAPTER 3
New: COVID-19 and
Discussion of COVID-19 and its effect
Working with
financial ratios
on ratios.
Financial Statements Expanded DuPont analysis
Expands the basic DuPont equation to
better explore the interrelationships
between operating and financial
performance.
DuPont analysis for real
Analysis shows students how to get
companies using data from
and use real-world data, thereby
S&P Market Insight
applying key chapter ideas.
Ratio and financial
statement analysis using
smaller firm data
New: Ratios for various
CHAPTER 4
Long-Term Financial
Planning and Growth
industries
Expanded discussion of
sustainable growth
calculations
Uses firm data from RMA to show
students how to actually get and
evaluate financial statement
benchmarks.
Discussion of ratios for various
industries in practice.
Illustrates the importance of financial
planning in a small firm.
Changes to Ross: Fundamentals of Corporate Finance, 13e
PART 3 Valuation of Future Cash Flows
Chapters
Selected Topics of
Interest
CHAPTER 7
Negative interest rates
Interest Rates and
Bond Valuation
Bond valuation
Interest rates
TRACE system and
transparency in the
corporate bond market
“Make-whole” call provisions
CHAPTER 8
Stock Valuation
New: COVID-19 and credit
ratings
New: Corporate default
rates
NYSE market operations
New: Valuation ratios for
industries
PART 5 Risk and Return
Chapters
Selected Topics of
Interest
CHAPTER 12
New: The stock market in
Some Lessons from
2020
Capital Market History
CHAPTER 13
New: Covariance and
Return, Risk, and the correlation
Security Market Line
Benefits to You
Chapter explores the recent
phenomenon of negative interest on
government bonds.
Complete coverage of bond valuation
and bond features.
Discusses real versus nominal rates
and the determinants of the term
structure.
Up-to-date discussion of new
developments in fixed income with
regard to price, volume, and
transactions reporting.
Up-to-date discussion of a relatively
new type of call provision that has
become very common.
Discussion of the negative impact of
COVID-19 on credit ratings.
Provides a discussion of default rates
by credit rating.
Up-to-date description of major stock
market operations.
Provides a discussion of how valuation
ratios vary between industries.
Benefits to You
Discussion of the market turmoil in
early 2020 caused by COVID-19.
Online Appendix provides a more indepth discussion of covariance and
correlation.
Changes to Ross: Fundamentals of Corporate Finance, 13e
PART 6 Cost of Capital and Long-Term Financial Policy
Chapters
Selected Topics of
Benefits to You
Interest
CHAPTER 15
New: Entrepreneurship and
Discussion of entrepreneurship and
Raising Capital
venture capital
the venture capital market.
Regulation CF
Explains the new Regulation CF for
crowdfunding and provides some
examples.
CHAPTER 17
Very recent survey evidence New survey results show the most
Dividends and
on dividend policy
important (and least important)
Payout Policy
factors considered by financial
managers in setting dividend policy.
Effect of new tax laws
Discusses implications of new, lower
dividend and capital gains rates.
PART 7 Short-Term Financial Planning and Management
Chapters
Selected Topics of
Benefits to You
Interest
CHAPTER 19
New: COVID and short-term Discussion of the COVID-19 crisis on
Cash and Liquidity
finance
short-term planning.
Management
CHAPTER 20
New: COVID-19 and
Discussion of excess inventory and
Credit and Inventory inventory
inventory shortages due to COVID-19.
Management
PART 8 Topics in Corporate Finance
Chapters
Selected Topics of
Interest
CHAPTER 21
Brexit
International
Corporate Finance
Repatriation
CHAPTER 26
Mergers and
Acquisitions
CHAPTER 27
Leasing
Defensive tactics
Changes in lease accounting
Benefits to You
Uses “Brexit” as an illustration of
political risk.
Chapter opener and in-chapter
discussion of the immense overseas
cash holdings by U.S. corporations.
Expanded discussion of antitakeover
provision.
Discusses recent changes in lease
accounting rules and the curtailment
of “off-balance-sheet” financing.