Financial Management

Principles and Practice

Those who advocate the traditional maximize shareholder value goal of the firm will find that position clearly presented in the 9th edition in addition to critical arguments for and against it. Those who advocate a multiple stakeholder approach will see that view fairly presented as well, in addition to the criticisms of this approach. The financial effect of the world-wide COVID pandemic is examined in this 9th edition. Both shareholder capitalism and stakeholder capitalism are critically evaluated. Should a company’s impact on climate change be considered when corporate decisions are made? If so, is this a matter of self-interest, a desire to also consider the interests of stakeholders who are not shareholders of the firm, or both? The 9th edition addresses these questions. There are special forms of business organization that have an explicit social welfare purpose. We covered the state-chartered benefit corporation and B Lab certified corporation in 8e. In 9e, the low-profit limited liability company (L3C) has been added. Business schools everywhere are emphasizing in their marketing communications their contributions to society. Perhaps your business school has communicated about sustainable business practices and the triple bottom line of profit, people, and planet. Finance is a discipline that has not been a significant part of these conversations. It is our view that finance needs to take part, but in a way that is true to our discipline. Ignoring these issues, as most books in this market do, is not the answer.