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Essentials of Corporate Finance

SEVENTH EDITION

The McGraw-Hill/lrwin 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

Adair Excel Applications for Corporate Finance First Edition

Block, Hirt, and Danielsen Foundations of Financial Management Thirteenth Edition

Brealey, Myers, and Allen Principles of Corporate Finance Tenth Edition

Brealey, Myers, and Allen Principles of Corporate Finance, Concise Second Edition

Brealey, Myers, and Marcus Fundamentals of Corporate Finance Sixth Edition

Brooks FinGame Online 5.0

Bruner Case Studies in Finance: Managing for Corporate Value Creation Sixth Edition

Chew The New Corporate Finance: Where Theory Meets Practice Third Edition

Cornett, Adair, and Nofsinger Finance: Applications and Theory First Edition

DeMello Cases in Finance Second Edition

Grinblatt (editor) Stephen A. Ross, Mentor: Influence through Generations

Grinblatt and Titman Financial Markets and Corporate Strategy Second Edition

Higgins Analysis for Financial Management

Ninth Edition Kellison

Theory of Interest Third Edition

Kester, Ruback, and Tufano Case Problems in Finance Twelfth Edition

Ross, Westerfield, and Jaffe Corporate Finance Ninth Edition

Ross, Westerfield, Jaffe, and Jordan Corporate Finance: Core Principles and Applications Second Edition

Ross, Westerfield, and Jordan Essentials of Corporate Finance Seventh Edition

Ross, Westerfield, and Jordan Fundamentals of Corporate Finance Ninth 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 Eighth Edition

Bodie, Kane, and Marcus Investments Eighth Edition

Hirschey and Nofsinger Investments: Analysis and Behavior Second Edition

Hirt and Block Fundamentals of Investment Management Ninth Edition

Jordan and Miller Fundamentals of Investments: Valuation and Management Fifth Edition

Stewart, Piros, and Heisler Running Money: Professional Portfolio Management First Edition

Sundaram and Das

Derivatives: Principles and Practice First Edition

FINANCIAL INSTITUTIONS AND MARKETS

Rose and Hudgins Bank Management and Financial Services Eighth Edition

Rose and Marquis Money and Capital Markets: Financial Institutions and Instruments in a Global Marketplace Tenth Edition

Saunders and Cornett Financial Institutions Management: A Risk Management Approach Seventh Edition

Saunders and Cornett Financial Markets and Institutions Fourth Edition

INTERNATIONAL FINANCE

Eun and Resnick International Financial Management Fifth Edition

Kuemmerle Case Studies in International Entrepreneurship: Managing and Financing Ventures in the Global Economy First Edition

Robin International Corporate Finance First Edition

REAL ESTATE

Brueggeman and Fisher Real Estate Finance and Investments Fourteenth Edition

Ling and Archer Real Estate Principles: A Value Approach Third Edition

FINANCIAL PLANNING AND INSURANCE

Allen, Melone, Rosenbloom, and Mahoney Retirement Plans: 401(k)s, IRAs, and Other Deferred Compensation Approaches Tenth 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 Develop Successful Financial Skills Third Edition

Kapoor, Dlabay, and Hughes Personal Finance Ninth Edition

Essentials of Corporate Finance

SEVENTH EDITION

Stephen A. Ross Massachusetts Institute of Technology

Randolph W. Westerfield University of Southern California

Bradford D. Jordan University of Kentucky

ESSENTIALS OF CORPORATE FINANCE

Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2011, 2008, 2007, 2004, 2001, 1999, 1996 by The McGraw-Hill Companies, Inc. All rights reserved. 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 The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 0 WCK/WCK 1 0 9 8 7 6 5 4 3 2 1 0

ISBN 978-0-07-338246-3 MHID 0-07-338246-9

Vice president and editor-in-chief: Brent Gordon Publisher: Douglas Reiner Executive editor: Michele Janicek Director of development: Ann Torbert Development editor: Elizabeth Hughes Vice president and director of marketing: Robin J. Zwettler Marketing director: Sankha Basu Senior marketing manager: Melissa Caughlin Vice president of editing, design, and production: Sesha Bolisetty Lead project manager: Christine A. Vaughan Lead production supervisor: Carol A. Bielski Cover and interior designer: Pam Verros Lead media project manager: Brian Nacik

Cover image: © Veer Typeface: 10/12 Times Roman Compositor: MPS Limited, A Macmillan Company Printer: World Color Press Inc.

Library of Congress Cataloging-in-Publication Data

Ross, Stephen A. Essentials of corporate finance / Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan.

-- 7th ed. p. cm. -- (The McGraw-Hill/Irwin series in finance, insurance, and real estate)

Includes index. ISBN-13: 978-0-07-338246-3 (alk. paper) ISBN-10: 0-07-338246-9 (alk. paper) 1. Corporations—Finance. I. Westerfield, Randolph. II. Jordan, Bradford D. III. Title.

HG4026.R676 2011 658.15-dc22

2009049816

www.mhhe.com

About the Authors

Stephen A. Ross

Sloan School of Management, Franco Modigliani Professor of Finance and Economics, Massachusetts Institute of Technology

Stephen A. Ross is 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 is recognized for his work in developing the Arbitrage Pricing Theory and his substantial contributions to the discipline through his research in signaling, 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 currently serves as an associate editor of several academic and practitioner journals. He is a trustee of CalTech.

Randolph W. Westerfield

Marshall School of Business, University of Southern California

Randolph W. Westerfield is Dean Emeritus of the University of Southern California’s Marshall School of Business and is the Charles B. Thornton Professor of Finance. He 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 several public company boards of directors including Health Management Associates, Inc., and the Nicholas Applegate Growth Fund. His areas of expertise include corporate financial policy, investment management, and stock market price behavior.

Bradford D. Jordan

Gatton College of Business and Economics, University of Kentucky

Bradford D. Jordan is Professor of Finance and holder of the Richard W. and Janis H. Furst Endowed Chair in Finance 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 the cost of capital, capital structure, and the behavior of security prices. He is a past president of the Southern Finance Association, and he is coauthor of Fundamentals of Investments: Valuation and Management, 5th edition, a leading investments text, also published by McGraw-Hill/Irwin.

From the Authors

When we first wrote Essentials of Corporate Finance, we thought there might be a small niche for a briefer book that really focused on what students with widely varying backgrounds and interests needed to carry away from an introductory finance course. We were wrong. There was a huge niche! What we learned is that our text closely matches the needs of instructors and faculty at hundreds of schools across the country. As a result, the growth we have experienced through the first six editions of Essentials has far exceeded anything we thought possible.

With the seventh edition of Essentials of Corporate Finance, we have continued to refine our focus on our target audience, which is the undergraduate student taking a core course in business or corporate finance. This can be a tough course to teach. One reason is that the class is usually required of all business students, so it is not uncommon for a majority of the students to be nonfinance majors. In fact, this may be the only finance course many of them will ever have. With this in mind, our goal in Essentials is to convey the most important concepts and principles at a level that is approachable for the widest possible audience.

To achieve our goal, we have worked to distill the subject down to its bare essentials (hence, the name of this book), while retaining a decidedly modern approach to finance. We have always maintained that the subject of corporate finance can be viewed as the working of a few very powerful intuitions. We also think that understanding the “why” is just as important, if not more so, than understanding the “how,” especially in an introductory course. Based on the gratifying market feedback we have received from our previous editions, as well as from our other text, Fundamentals of Corporate Finance (now in its ninth edition), many of you agree.

By design, this book is not encyclopedic. As the table of contents indicates, we have a total of 18 chapters. Chapter length is about 30 pages, so the text is aimed squarely at a single-term course, and most of the book can be realistically covered in a typical semester or quarter. Writing a book for a one-term course necessarily means some picking and choosing, with regard to both topics and depth of coverage. Throughout, we strike a balance by introducing and covering the essentials (there’s that word again!) while leaving some more specialized topics to follow-up courses.

The other things we have always stressed, and have continued to improve with this edition, are readability and pedagogy. Essentials is written in a relaxed, conversational style that invites the students to join in the learning process rather than being a passive information absorber. We have found that this approach dramatically increases students' willingness to read and learn on their own. Between larger and larger class sizes and the ever-growing demands on faculty time, we think this is an essential (!) feature for a text in an introductory course.

Throughout the development of this book, we have continued to take a hard look at what is truly relevant and useful. In doing so, we have worked to downplay purely theoretical issues and minimize the use of extensive and elaborate calculations to illustrate points that are either intuitively obvious or of limited practical use.

As a result of this process, three basic themes emerge as our central focus in writing Essentials of Corporate Finance:

An Emphasis on Intuition

We always try to separate and explain the principles at work on a commonsense, intuitive level before launching into any specifics. The underlying ideas are discussed first in very general terms and then by way of examples that illustrate in more concrete terms how a financial manager might proceed in a

given situation.

A Unified Valuation Approach

We treat net present value (NPV) as the basic concept underlying corporate finance. Many texts stop well short of consistently integrating this important principle. The most basic and important notion, that NPV represents the excess of market value over cost, often is lost in an overly mechanical approach that emphasizes computation at the expense of comprehension. In contrast, every subject we cover is firmly rooted in valuation, and care is taken throughout to explain how particular decisions have valuation effects.

A Managerial Focus

Students shouldn’t lose sight of the fact that financial management concerns management. We emphasize the role of the financial manager as decision maker, and we stress the need for managerial input and judgment. We consciously avoid “black box” approaches to finance, and, where appropriate, the approximate, pragmatic nature of financial analysis is made explicit, possible pitfalls are described, and limitations are discussed.

Today, as we prepare to once again enter the market, our goal is to stick with and build on the principles that have brought us this far. However, based on an enormous amount of feedback we have received from you and your colleagues, we have made this edition and its package even more flexible than previous editions. We offer flexibility in coverage and pedagogy by providing a wide variety of features in the book to help students to learn about corporate finance. We also provide flexibility in package options by offering the most extensive collection of teaching, learning, and technology aids of any corporate finance text. Whether you use just the textbook, or the book in conjunction with other products, we believe you will find a combination with this edition that will meet your current as well as your changing needs.

Stephen A. Ross Randolph W. Westerfield Bradford D. Jordan

Organization of the Text

We designed Essentials of Corporate Finance to be as flexible and modular as possible. There are a total of nine parts, and, in broad terms, the instructor is free to decide the particular sequence. Further, within each part, the first chapter generally contains an overview and survey. Thus, when time is limited, subsequent chapters can be omitted. Finally, the sections placed early in each chapter are generally the most important, and later sections frequently can be omitted without loss of continuity. For these reasons, the instructor has great control over the topics covered, the sequence in which they are covered, and the depth of coverage.

Just to get an idea of the breadth of coverage in the seventh edition of Essentials, the following grid presents for each chapter some of the most significant new features, as well as a few selected chapter highlights. Of course, in every chapter, figures, opening vignettes, boxed features, and in-chapter illustrations and examples using real companies have been thoroughly updated as well. In addition, the end-of-chapter material has been completely revised.

Learning Solutions

In addition to illustrating relevant concepts and presenting up-to-date coverage, Essentials of

Corporate Finance strives to present the material in a way that makes it engaging and easy to understand. To meet the varied needs of the intended audience, Essentials of Corporate Finance is rich in valuable learning tools and support.

Each feature can be categorized by the benefit to the student:

Real financial decisions Application tools Study aids

REAL FINANCIAL DECISIONS

We have included two key features that help students connect chapter concepts to how decision makers use this material in the real world.

Chapter-Opening Vignettes Each chapter begins with a contemporary real-world event to introduce students to chapter concepts.

Reality Bytes Boxes Most chapters include at least one Reality Bytes box, which takes a chapter issue and shows how it is

being used right now in everyday financial decision making.

APPLICATION TOOLS

Because there is more than one way to solve problems in corporate finance, we include many sections that encourage students to learn or brush up on different problem-solving methods, such as financial calculator and Excel spreadsheet skills.

Chapter Cases Located at the end of most chapters, these cases focus on hypothetical company situations that embody

corporate finance topics. Each case presents a new scenario, data, and a dilemma. Several questions at the end of each case require students to analyze and focus on all of the material they learned from the chapters in that part. Great for homework or in-class exercises and discussions!

Work the Web These in-chapter boxes show students how to research financial issues using the Web and how to use

the information they find to make business decisions. New to this edition, now all of the Work the Web boxes also include interactive follow-up questions and exercises.

Explanatory Web Links These Web links are provided in the margins of the text. They are specifically selected to accompany

text material and provide students and instructors with a quick way to check for additional information using the Internet.

What’s On the Web? These end-of-chapter activities show students how to use and learn from the vast amount of financial

resources available on the Internet.

Calculator Hints Calculator Hints is a self-contained section occurring in various chapters that first introduces students

to calculator basics and then illustrates how to solve problems with the calculator. Appendix D goes into more detailed instructions by solving problems with two specific calculators.

Spreadsheet Strategies The unique Spreadsheet Strategies feature is also in a self-contained section, showing students how to

set up spreadsheets to solve problems—a vital part of every business student’s education.

Spreadsheet Templates Indicated by an Excel icon next to applicable end-of-chapter questions and problems, spreadsheet

templates are available for selected problems on the Student Edition of the book’s Web site, www.mhhe.com/rwj. For even more spreadsheet examples, check out Excel Master, also available on the Web site.

STUDY AIDS

We want students to get the most from this book and this course, and we realize that students have

different learning styles and study needs. We therefore present a number of study features to appeal to a wide range of students.

Learning Objectives Each chapter begins with a number of learning objectives that are key to the student’s understanding of

the chapter. Learning objectives are also linked to end-of-chapter problems and test bank questions.

Pedagogical Use of Color We continue to use a full color palette in Essentials not only to make the text more inviting, but, more

importantly, as a functional element to help students follow the discussion. In almost every chapter, color plays an important, largely self-evident role. A guide to the use of color is found on the back endsheets.

Critical Thinking Questions Every chapter ends with a set of critical thinking questions that challenge the students to apply the

concepts they have learned in the chapter to new situations.

Concept Questions Chapter sections are intentionally kept short to promote a step-by-step, building-block approach to

learning. Each section is then followed by a series of short concept questions that highlight the key ideas just presented. Students use these questions to make sure they can identify and understand the most important concepts as they read.

Numbered Examples Separate numbered and titled examples are extensively integrated into the chapters. These examples

provide detailed applications and illustrations of the text material in a step-by-step format. Each example is completely self-contained so that students don’t have to search for additional information. Based on our classroom testing, these examples are among the most useful learning aids because they provide both detail and explanation.

Summary Tables These tables succinctly restate key principles, results, and equations. They appear whenever it is

useful to emphasize and summarize a group of related concepts.

Key Terms

These are printed in blue the first time they appear, and are defined within the text and in the margin.

Key Equations These are called out in the text and identified by equation numbers. Appendix B shows the key

equations by chapter.

Highlighted Phrases Throughout the text, important ideas are presented separately and printed in a green box to indicate

their importance to the students.

Chapter Summary and Conclusions These paragraphs review the chapter’s key points and provide closure to the chapter.

Chapter Review and Self-Test Problems Review and self-test problems appear after the chapter summaries. Detailed answers to the self-test

problems immediately follow. These questions and answers allow students to test their abilities in solving key problems related to the content of the chapter.

End-of-Chapter Questions and Problems We have found that many students learn better when they have plenty of opportunity to practice. We

therefore provide extensive end-of-chapter questions and problems—now linked to Learning Objectives. The questions and problems are generally separated into three levels—Basic, Intermediate, and Challenge. All problems are fully annotated so that students and instructors can readily identify particular types. Throughout the text, we have worked to supply interesting problems that illustrate real-world applications of chapter material. Answers to selected end-of-chapter problems appear in Appendix C.

Comprehensive Teaching and Learning Package

This edition of Essentials has more options than ever in terms of the textbook, instructor supplements, student supplements, and multimedia products. Mix and match to create a package that is perfect for your course!

INSTRUCTOR SUPPLEMENTS

Assurance of Learning Many educational institutions today are focused on the notion of assurance of learning, an important

element of some accreditation standards. This text is designed specifically to support your assurance of learning initiatives with a simple, yet powerful, solution.

Each test bank question maps to a specific chapter learning outcome/objective listed in the text. You can use the Test Bank software to easily query for learning outcomes/objectives that directly relate to the learning objectives for your course. You can then use the reporting features of the software to aggregate student results in similar fashion, making the collection and presentation of assurance of learning data simple and easy.

Instructor’s CD-ROM ISBN 0077260651 Keep all the supplements in one place! This CD contains all the necessary supplements— Instructor’s

Manual, Solutions, Test Bank, Computerized Test Bank, and PowerPoint—all in one useful product in an electronic format.

Instructor’s Manual (IM) Prepared by Lynn Kugele, The University of Mississippi A great place to find new lecture ideas! This annotated outline for each chapter includes Lecture

Tips, Real-World Tips, Ethics Notes, suggested PowerPoint slides, and, when appropriate, a video synopsis.

Solutions Manual (SM) Prepared by Joseph Smolira, Belmont University The Essentials Solutions Manual provides detailed solutions to the extensive end-of-chapter

material, including concept review questions, quantitative problems, and cases. Select chapters also contain calculator solutions.

Test Bank Prepared by Kay Johnson, Penn State University-Erie Great format for a better testing process! All questions closely link with the text material, listing

section number, Learning Objective, Bloom’s Taxonomy Question Type, and AACSB topic when applicable. Each chapter is divided into five parts. Part I contains questions that test the understanding of the key terms in the book. Part II includes questions patterned after the learning objectives, concept questions, chapter opening vignettes, boxes, and highlighted phrases. Part III contains multiple-choice and true/false problems patterned after the end-of-chapter questions, in basic, intermediate, and challenge levels. Part IV provides essay questions to test problem-solving skills and more advanced understanding of concepts. Part V is a new section that picks up questions directly from the end-of-chapter material and converts them into parallel test bank questions. For

your reference, each test bank question in this part is linked with its corresponding question in the end-of-chapter. Also included are ready-made quizzes to hand out in class.

Computerized Test Bank (Windows) Create your own tests in a snap! These additional questions are found in a computerized test bank

utilizing McGraw-Hill’s EZ Test testing software to quickly create customized exams. This user- friendly program allows instructors to sort questions by format, edit existing questions or add new ones, and scramble questions for multiple versions of the same test.

PowerPoint Presentation System Prepared by Lynn Kugele, The University of Mississippi Customize our content for your course! This presentation has been thoroughly revised to include

more lecture-oriented slides, as well as exhibits and examples both from the book and from outside sources. Applicable slides have Web links that take you directly to specific Internet sites or spreadsheet links to show an example in Excel. You can also go to the Notes Page function for more tips in presenting the slides. New to this edition, additional PPT slides work through example problems for instructors to show in class. If you already have PowerPoint installed on your PC, you have the ability to edit, print, or rearrange the complete presentation to meet your specific needs.

Videos (DVD Format) Current set of videos on hot topics! McGraw-Hill/Irwin has produced a series of finance videos that

are 10-minute case studies on topics such as Financial Markets, Careers, Rightsizing, Capital Budgeting, EVA (Economic Value Added), Mergers and Acquisitions, and International Finance.

ONLINE SUPPORT

Online Learning Center at www.mhhe.com/rwj The Online Learning Center (OLC) contains free access to additional Web-based study and teaching

aids created for this text, such as:

Student Support A great resource for those seeking additional practice, students can access self-grading quizzes,

Excel template problems, and the new tutorial Excel Master designed by Brad Jordan and Joe Smolira.

Premium Content Access iPod Content The library isn’t the place to study! Students lead active and mobile lives.

Harness the power of one of the most popular technology tools today and study on the go. Our innovative approach allows you to download Narrated PowerPoints and quizzes right into your iPod or other MP3 player device.

Narrated PowerPoint Slides Created by Kent Ragan, Missouri State University. The narrated PowerPoints provide real-world examples accompanied by step-by-step instructions and explanations for solving problems presented in the chapter. The Concept Checks from the text are also integrated into the slides to reinforce the key topics in the chapter. Designed specifically to appeal to different learning styles, the slides provide a visual and audio explanation of topics and problems. Click on the slide and listen to the accompanying narration! You can view this slides via computer or download them onto your video iPod.

Teaching Support Along with having access to all of the same material your students can view on the book’s OLC,

you also have password protected access to the Instructor’s Manual, solutions to end-of-chapter

problems and cases, Instructor’s Excel Master, Instructor’s PowerPoint, Excel template solutions, video clips, and video projects and questions.

WebCT and Blackboard course cartridges allow instructors to manage their course and administer examinations online. Increase ease, organization, and efficiency and ask your representative for more details about course cartridges today!

McGraw-Hill Connect Finance

Less Managing. More Teaching. Greater Learning. McGraw-Hill’s Connect Finance is an online assignment and assessment solution that connects

students with the tools and resources they’ll need to achieve success. Connect helps prepare students for their future by enabling faster learning, more efficient studying, and better retention of knowledge.

McGraw-Hill Connect Finance Features Connect Finance offers powerful tools and features to make managing assignments easier, so faculty can spend more time teaching. With Connect Finance, students can engage with their coursework anytime and anywhere, making the learning process more accessible and efficient. Connect Finance offers you the features described below.

Simple Assignment Management With Connect Finance, creating assignments is easier than ever, so you can spend more time teaching and less time managing. The assignment management function enables you to:

Create and deliver assignments easily with selectable end-of-chapter questions and test bank items.

Streamline lesson planning, student progress reporting, and assignment grading to make classroom management more efficient than ever.

Go paperless with the eBook and online submission and grading of student assignments.

Smart Grading When it comes to studying, time is precious. Connect Finance helps students learn more efficiently by providing feedback and practice material when they need it, where they need it. When it comes to teaching, your time is also precious. The grading function enables you to:

Have assignments scored automatically, giving students immediate feedback on their work and side-by-side comparisons with correct answers.

Access and review each response; manually change grades or leave comments for students to review.

Reinforce classroom concepts with practice tests and instant quizzes.

Instructor Library The Connect Finance Instructor Library is your repository for additional resources to improve student engagement in and out of class. You can select and use any asset that enhances your lecture.

Student Study Center The Connect Finance Student Study Center is the place for students to access additional resources. The Student Study Center:

Offers students quick access to lectures, practice materials, eBooks, and more. Provides instant practice material and study questions, easily accessible on the go. Gives students access to the Personal Learning Plan described below.

Connect Study Feature This Study Feature connects each student to the learning resources needed for success in the course. For each chapter, students:

Take a practice test to gauge understanding of the material. Immediately upon completing the practice test, see how their performance compares to the

chapter objectives to be achieved within each section of the chapters. Receive a personal learning plan that recommends specific readings from the text, supplemental

study material, and practice work that will improve their understanding and mastery of each learning objective.

Students Progress Tracking Connect Finance keeps instructors informed about how each student, section, and class is performing, allowing for more productive use of lecture and office hours. The progress-tracking function enables you to:

View scored work immediately and track individual or group performance with assignment and grade reports.

Access an instant view of student or class performance relative to learning objectives.

Lecture Capture through Tegrity Campus For an additional charge, Lecture Capture offers new ways for students to focus on the in-class discussion, knowing they can revisit important topics later. This can be delivered through Connect or separately. See below for more details.

McGraw-Hill Connect Plus Finance McGraw-Hill reinvents the textbook learning experience for the modern student with Connect Plus Finance. A seamless integration of an eBook and Connect Finance, Connect Plus Finance provides all of the Connect Finance features plus the following:

An integrated eBook, allowing for anytime, anywhere access to the textbook. Dynamic links between the problems or questions you assign to your students and the location in

the eBook where that problem or question is covered. A powerful search function to pinpoint and connect key concepts in a snap.

In short, Connect Finance offers you and your students powerful tools and features that optimize your time and energies, enabling you to focus on course content, teaching, and student learning. Connect Finance also offers a wealth of content resources for both instructors and students. This state-of-the-art, thoroughly tested system supports you in preparing students for the world that awaits.

For more information about Connect, go to www.mcgrawhillconnect.com, or contact your McGraw- Hill sales representative.

TEGRITY CAMPUS: LECTURES 24/7

Tegrity Campus is a service that makes class time available 24/7 by automatically capturing every lecture in a searchable format for students to review when they study and complete assignments. With a simple one-click start-and-stop process, you capture all computer screens and corresponding audio. Students can reply any part of any class with easy-to-use browser-based viewing on a PC or Mac.

Educators know that the more students can see, hear, and experience class resources, the better they

learn. In fact, studies prove it. With Tegrity Campus, students quickly recall key moments by using Tegrity Campus’s unique search feature. This search helps students efficiently find what they need, when they need it, across an entire semester of class recordings. Help turn all your students' study time into learning moments immediately supported by your lecture.

To learn more about Tegrity watch a 2-minute Flash demo at http://tegritycampus.mhhe.com.

McGraw–Hill Customer Care Contact Information At McGraw–Hill, we understand that getting the most from new technology can be challenging. That’s