Ross - Ross: Fundamentals of Corporate Finance 8e (978174376805) Australian Edition

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Assurance of learning

Assurance of learning is an important element of many accreditation standards. The eighth edition of Fundamentals of Corporate Finance is designed specifically to support your assurance of learning initiatives.

Each chapter in the book begins with a list of numbered learning objectives that are aligned with the end-of-chapter problems and exercises. Every testbank question is also linked to one of these objectives, in addition to level of difficulty, topic area and AACSB skill areas.

AACSB statement

McGraw-Hill Education (Australia) Pty Ltd is a proud corporate member of AACSB International. Understanding the importance and value of AACSB accreditation, the eighth edition of Fundamentals of Corporate Finance has sought to recognise the curriculum guidelines detailed in the AACSB standards for business accreditation by connecting selected questions in the testbank to the general knowledge and skill guidelines found in the AACSB standards.

The statements contained in the testbank are provided only as a guide for the users of this text. The AACSB leaves content coverage and assessment within the purview of individual schools, the mission of the school and the faculty. While Fundamentals of Corporate Finance and the teaching package make no claim of any specific AACSB qualification or evaluation, we have, within the testbank, labelled selected questions according to six general knowledge and skills areas.

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Additional owners of copyright are acknowledged in on-page credits.

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National Library of Australia Cataloguing-in-Publication Data

• Author: Stephen A. Ross, Rowan Trayler, Charles Koh, Gerhard Hambusch and Kristoffer Glover.
• Title: Fundamentals of Corporate Finance
• Edition: 8th edition
• ISBN: 9781743768051 (paperback)

• Published in Australia by McGraw-Hill (Australia) Pty Ltd Level 33, 680 George Street, Sydney NSW 2000
• Publisher: Simone Bella/Matthew Coxhill
• Content developer: Asad Shabir
• Production editor: Lara McMurray
• Copyeditor: Julie Wicks
• Proofreader: Meredith Lewin
• Indexer: SPi, India
• Cover design: Christabella Designs
• Interior design: Liz Seymour
• Cover image: cloki/Shutterstock
• Typeset in That 10/12 by SPi, India
• Printed in Singapore on 70 gsm matt art by Markono Print Media Pte Ltd

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To Stephen A. Ross and family
Our great friend, colleague and coauthor Steve Ross passed away on 3 March 2017, while the US team were working on the 12th edition of Fundamentals of Corporate Finance. Steves influence on the Ross et al. textbook is seminal, deep and enduring, and we will miss him greatly. We are confident that on the foundation of Steves lasting and invaluable contributions, our textbook will continue to reach the highest level of excellence that we all aspire to.

RT, CK, GH, KG, RWW, BDJ

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CHAPTER 22 BEHAVIOURAL FINANCE: IMPLICATIONS
FOR FINANCIAL MANAGEMENT

Page v Page vi

CHAPTER 1

CHAPTER 2

Page vii

CHAPTER 3

CHAPTER 4

Page viii

CHAPTER 5

CHAPTER 6

CHAPTER 7

CHAPTER 8

Page ix

CHAPTER 9

CHAPTER 10

CHAPTER 11

Page x

CHAPTER 12

CHAPTER 13

Page xi

CHAPTER 14

CHAPTER 15

Page xii

CHAPTER 16

FINANCIAL LEVERAGE AND CAPITAL
STRUCTURE POLICY

CHAPTER 17

Real-world factors favouring a
high-dividend payout

Page xiii

CHAPTER 18

CHAPTER 19

Page xiv

CHAPTER 20

CHAPTER 21

Page xv

CHAPTER 22

CHAPTER 23

CHAPTER 24

Page xvi

CHAPTER 25

CHAPTER 26

CHAPTER 27

Page xvii

APPENDIX A

APPENDIX B

APPENDIX C

APPENDIX D

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Stephen A. Ross was the Franco Modigliani Professor of Finance and Economics at the Sloan School of Management, Massachusetts Institute of Technology. One of the most widely published authors in finance and economics, Professor Ross was widely recognised for his work in developing the Arbitrage Pricing Theory and his substantial contributions to the discipline through his research in signalling, agency theory, option pricing and the theory of the term structure of interest rates, among other topics. A past president of the American Finance Association, he also served as an associate editor of several academic and practitioner journals. He was a trustee of CalTech. He died suddenly in March of 2017.

Marshall School of Business, University of Southern California

Randolph W. Westerfield is Dean Emeritus and the Charles B. Thornton Professor in Finance Emeritus of the University of Southern Californias Marshall School of Business. Professor Westerfield came to USC from the Wharton School, University of Pennsylvania, where he was the chairman of the finance department and a member of the finance faculty for 20 years. He is a member of the board of trustees of Oaktree Capital mutual funds. His areas of expertise include corporate financial policy, investment management and shares' market price behaviour.

Gatton College of Business and Economics, University of Kentucky

Bradford D. Jordan is Professor of Finance and holder of the duPont Endowed Chair in Banking and Financial Services at the University of Kentucky. He has a long-standing interest in both applied and theoretical issues in corporate finance and has extensive experience teaching all levels of corporate finance and financial management policy. Professor Jordan has published numerous articles on issues such as cost of capital, capital structure and the behaviour of security prices. He is a past president of the Southern Finance Association and he is coauthor of

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