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The McGraw-Hill/Irwin Series in Finance, Insurance, and Real Estate
Stephen A. Ross
Franco Modigliani Professor of Finance and Economics
Sloan School of Management, Massachusetts Institute of Technology, Consulting Editor
Financial Management
Block, Hirt, and Danielsen
Foundations of Financial Management Fifteenth Edition
Brealey, Myers, and Allen
Principles of Corporate Finance Eleventh Edition
Brealey, Myers, and Allen
Principles of Corporate Finance, Concise Second Edition
Brealey, Myers, and Marcus
Fundamentals of Corporate Finance Eighth Edition
Brooks
FinGame Online 5.0
Bruner
Case Studies in Finance: Managing for Corporate Value Creation Seventh Edition
Cornett, Adair, and Nofsinger
Finance: Applications and Theory Third Edition
Cornett, Adair, and Nofsinger
M: Finance
Third Edition
DeMello
Cases in Finance
Second Edition
Grinblatt (editor)
Stephen A. Ross, Mentor: Infl uence through Generations
Grinblatt and Titman
Financial Markets and Corporate Strategy Second Edition
Higgins
Analysis for Financial Management
Eleventh Edition
Kellison
Theory of Interest
Third Edition
Ross, Westerfield, and Jaffe
Corporate Finance
Tenth Edition
Ross, Westerfield, Jaffe, and Jordan
Corporate Finance: Core Principles and Applications Fourth Edition
Ross, Westerfield, and Jordan
Essentials of Corporate Finance Eighth Edition
Ross, Westerfield, and Jordan
Fundamentals of Corporate Finance Eleventh Edition
Shefrin
Behavioral Corporate Finance: Decisions that Create Value
First Edition
White
Financial Analysis with an Electronic Calculator
Sixth Edition
Investments
Bodie, Kane, and Marcus
Essentials of Investments Ninth Edition
Bodie, Kane, and Marcus
Investments
Tenth Edition
Hirt and Block
Fundamentals of Investment Management
Tenth Edition
Jordan, Miller, and Dolvin
Fundamentals of Investments: Valuation and Management
Seventh Edition
Stewart, Piros, and Heisler
Running Money: Professional Portfolio Management
First Edition
Sundaram and Das
Derivatives: Principles and Practice
Second Edition
Financial Institutions and Markets
Rose and Hudgins
Bank Management and Financial Services Ninth Edition
Rose and Marquis
Financial Institutions and Markets Eleventh Edition
Saunders and Cornett
Financial Institutions Management: A Risk Management Approach
Eighth Edition
Saunders and Cornett
Financial Markets and Institutions
Sixth Edition
International Finance
Eun and Resnick
International Financial Management
Seventh Edition
Real Estate
Brueggeman and Fisher
Real Estate Finance and Investments Fourteenth Edition
Ling and Archer
Real Estate Principles: A Value Approach Fourth Edition
Financial Planning and Insurance
Allen, Melone, Rosenbloom, and Mahoney
Retirement Plans: 401(k)s, IRAs, and Other Deferred Compensation Approaches
Eleventh Edition
Altfest
Personal Financial Planning
First Edition
Harrington and Niehaus
Risk Management and Insurance
Second Edition
Kapoor, Dlabay, and Hughes
Focus on Personal Finance: An Active Approach to Help You Achieve Financial Literacy
Fifth Edition
Kapoor, Dlabay, and Hughes
Personal Finance
Eleventh Edition
Walker and Walker
Personal Finance: Building Your Future First Edition
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FUNDAMENTALS OF CORPORATE FINANCE, ELEVENTH EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright 2016 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions 2013, 2010, 2008, 2006, 2003, 2000, 1998, 1995, 1993, and 1991. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.
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ISBN 978-0-07-786170-4
MHID 0-07-786170-1
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All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.
Library of Congress Cataloging-in-Publication Data
Ross, Stephen A.
Fundamentals of corporate finance / Stephen A. Ross, Massachusetts Institute of Technology, Randolph W. Westerfield, University of Southern California, Bradford D. Jordan, University of Kentucky. -- Eleventh Edition.
pages cm. -- (The McGraw-Hill/Irwin series in finance, insurance, and real estate)
Includes index.
ISBN 978-0-07-786170-4 (alk. paper)
1. Corporations--Finance. I. Westerfield, Randolph W. II. Jordan, Bradford D. III. Title.
HG4026.R677 2016
658.15--dc23
2014039303
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.
www.mhhe.com
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To our families and friends with love and gratitude.
S.A.R. R.W.W. B.D.J.
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About the Authors
STEPHEN A. ROSS
Sloan School of Management, Massachusetts Institute of Technology