This well-established textbook has been extensively revised to incorporate innovations in the financial markets and financial instruments of the late 1980s. Two new chapters on International Finance and Mergers and Takeovers ensure that the reader will be kept up to date with recent developments in financial theory and practice. Distinctive features of the book which make it attractive to students facing a complex subject for the first time are integration of the theory and practice of finance and clear description of the institutional framework of corporate finance. This is an ideal textbook for courses on corporate finance, and is accompanied by a workbook which includes worked examples, questions, and solutions.