Financial Management, Third Edition

Preface
Financial Management, designed for finance and business students, presents
the theory and application of corporate finance. As in the preceding volumes
in the Schaum’s Outline Series in Accounting, Business, and Economics, the
solved-problems approach is used, with emphasis on the practical application of
principles, concepts, and tools of financial management. Although an elementary
knowledge of accounting, economics, and statistics is helpful, it is not required for
using this book since the student is provided with the following:
1. Definitions and explanations that are clear and concise.
2. Examples that illustrate the concepts and techniques discussed in
each chapter.
3. Review questions and answers.
4. Detailed solutions to representative problems covering the subject matter.
5. Comprehensive examinations, with solutions, to test the student’s
knowledge of each chapter; the exams are representative of those
used by 2- and 4-year colleges and M.B.A. programs.
In line with the development of the subject, two professional designations
are noted. One is the Certificate in Management Accounting (CMA)/Certified
in Financial Management (CFM) which is a recognized certificate for both
management accountants and financial managers. The other is the Chartered
Financial Analyst (CFA), established by the Institute of Chartered Financial
Analysts. Students who hope to be certified by either of these organizations
may find this outline particularly useful.
This book was written with the following objectives in mind:
1. To supplement formal training in financial management courses
at the undergraduate and graduate levels. It therefore serves as an
excellent study guide.
2. To enable students to prepare for the business finance portion of such
professional examinations as the CMA/CFMand CFA examinations.
Hence it is a valuable reference source for review and self-testing.
This edition expands in scope to cover new developments in finance such as
real options and the Sarbanes-Oxley Act.
Financial Management was written to cover the common denominator of
managerial finance topics after a thorough review was made of the numerous
managerial finance, financial management, corporate finance, and business
finance texts currently available. It is, therefore, comprehensive in coverage and
presentation. In an effort to give readers a feel for the types of questions asked on
the CMA/CFM and CFA examinations, problems from those exams have been
incorporated within this book.
‘‘Permission has been received from the Institute of Certified Management
Accountants to use questions and/or unofficial answers from past CMA/CFM
examinations.’’
Finally, we would like to thank our assistant Allison Slim for her assistance.
JAE K. SHIM, JOEL G. SIEGEL