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Lecturer’s Guide
Corporate Financial
Management
Sixth edition



Glen Arnold
Deborah Lewis


For further instructor material,
please visit:
www.pearsoned.co.uk/arnold
ISBN: 978-1-292-14045-2

 Pearson Education Limited 2019
Lecturers adopting the main text are permitted to download and photocopy the manual as required.

,PEARSON EDUCATION LIMITED
KAO Two
KAO Park
Harlow CM17 9SR
United Kingdom
Tel: +44 (0)1279 623623
Web: www.pearson.com/uk
________________________

First published under the Financial Times
Pitman Publishing imprint in 1998
Second Edition published 2002
Third Edition published 2005
Fourth Edition published 2008
Fifth edition published 2013
Sixth edition published 2019

© Financial Times Professional Limited 1998
© Pearson Education Limited 2002, 2005, 2008, 2013, 2019

The rights of Glen Arnold and Deborah Lewis to be identified as authors of this work have been
asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

Pearson Education is not responsible for the content of third-party internet sites.

ISBN 978-1-292-14045-2

All rights reserved. Permission is hereby given for the material in this publication to be
reproduced for OHP transparencies and student handouts, without express permission of the
Publishers, for educational purposes only. In all other cases, no part of this publication may be
reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise without either the prior written permission
of the Publishers or a licence permitting restricted copying in the United Kingdom issued by the
Copyright Licensing Agency Ltd., Barnard’s Inn, 86 Fetter Lane, London EC4A 1EN. This
book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of
binding or cover other than that in which it is published, without the prior consent of the
Publishers.

The Financial Times. With a worldwide network of highly respected journalists, The Financial
Times provides global business news, insightful opinion and expert analysis of business, finance
and politics. With over 500 journalists reporting from 50 countries worldwide, our in-depth
coverage of international news is objectively reported and analysed from an independent, global
perspective. To find out more, visit www.ft.com/pearsonoffer.

, Contents

Chapters Pages

Preface 5

Location of answers to questions and problems 6

SUPPLEMENTARY MATERIAL FOR CHAPTERS

Chapter 1 The financial world 8

Chapter 2 Project appraisal: net present value and internal rate of return 12

Chapter 3 Project appraisal: cash flow and applications 17

Chapter 4 The decision-making process for investment appraisal 26

Chapter 5 Project appraisal: capital rationing, taxation and inflation 31

Chapter 6 Risk and project appraisal 38

Chapter 7 Portfolio theory 44

Chapter 8 The capital asset pricing model and multi-factor models 51

Chapter 9 Stock markets 54

Chapter 10 Raising equity capital 58

Chapter 11 Long-term debt finance 64

Chapter 12 Short-term and medium-term finance 69

Chapter 13 Stock market efficiency 78

Chapter 14 Value-based management 80

Chapter 15 Value-creation metrics 87

Chapter 16 The cost of capital 95

Chapter 17 Valuing shares 98

Chapter 18 Capital structure 104

Chapter 19 Dividend policy 108

Chapter 20 Mergers 110

Chapter 21 Derivatives 118

Chapter 22 Managing exchange-rate risk 126



3
© Pearson Education Limited 2019

, Arnold & Lewis, Corporate Financial Management, 6e, Instructor’s Manual


Corporate Financial Management Online
A wide range of supporting resources are available at:
Pearson | MyLab | Finance

Register to create your own personal account using the access code supplied with your copy of the book,*
and access the following teaching and learning resources:

Resources for students
● A dynamic eText of the book that you can search, bookmark, annotate and highlight as you please
● Self-assessment questions that identify your strengths before recommending a personalised study
plan that points you to the resources which can help you achieve a better grade
● FT articles keeping you up to date with key business concepts discussed in the book
● Flashcards to test your understanding of key terms

Resources for instructors
● Complete, downloadable Instructor’s Manual
● PowerPoint slides that can be downloaded and used for presentations
For more information, please contact your local Pearson Education sales representative or visit
www.pearson.com/mylab/finance

*Visit www.pearson.com/mylab/finance to purchase access.




4
© Pearson Education Limited 2019

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