Origins

• According to the description of the book provided by the publisher, McGraw-Hill, the authors began work on FMCS in 1988. The issues that it addresses were very much in the air at that time, in part because of the wave of leveraged corporate buy outs in the 1980s, culminating in the struggle for control of RJR Nabisco in 1988-89.
  
  

Premise

• The premise of FMCS is that a would-be corporate strategist must understand financial markets, both the key institutions and the valuation of securities. The financial markets, after all, define for a corporate strategist how his corporation can raise funds, from whom, at what expense and with what sorts of third-party assistance. The authors concern themselves, then, with relevant practices, laws, and regulations in several countries that host globally important institutions: the United States, the United Kingdom, Germany and Japan in particular.
  
  

Allocating Capital

• One of the most common requests from readers of the first edition was for new material about cash flows, and the mechanics of discounting expected cash flow to present value. That new material became chapter 12 of the second edition. Under the title "Allocating Capital and Corporate Strategy" this chapter is now available as a sample on the book's website. The traditional "discounted flow" approach to valuing present investments -- such as the purchase of a new piece of machinery -- asks how much money would one have to put in a savings account -- or into government bonds, or analogous safe investment -- in order to produce the cash flow that analysts expect from the proposed new machine over its lifetime. The necessary principal for such an account is the discounted value of the machine. FMCS maintains that more sophisticated approaches, the "real options approach and the ratio comparison approach" are consistent with that traditional method, but that they also "recognize that financial market information can be useful for determining the expected cash flows of a project as well as the appropriate discount rate and can thus provide more accurate estimates of value" than the traditional approach can if employed alone.
  
  

European Edition

• After the book had already established itself as a U.S. text, the authors brought it out in a new "European edition" in 2008.