When the first edition of Fundamentals was published 31 years ago, we wanted to provide an introductory text that students would find interesting and easy to understand. Fundamentals immediately became the leading undergraduate finance text, and it has maintained that position ever since. Our goal with this edition was to produce a book and ancillary package that would maintain its lead and set a new standard for finance textbooks. Important changes in the financial environment have occurred since the last edition. New technology and increased globalization continue to transform practices and markets. Continued improvements in communications and transportation have made it easier for businesses to operate on a worldwide basis—a company can be headquartered in New York, develop products in India, manufacture them in China, and sell them anywhere in the world. This has led to major changes in the labor markets, especially to an increase in outsourcing, which has resulted in generally lower consumer prices; but it has caused job losses for some U.S. workers and gains for others. There have also been dramatic rises and falls in the stock market, and interesrates have remained low even as energy prices continue to rise. Corporate scandals have led to important changes in the laws governing corporate management and financial reporting, as well as to equally important changes in managerial compensation. These issues are discussed in this edition of Fundamentals, where we analyze
them from financial and ethical perspectives.