Foundations of Financial Management by Block

							                           Foundations of Financial Management
                                Seventh Canadian Edition
                                    Block, Hirt, Short
                                Errata – February 28, 2006


Chapter 1
4         FIA                  The chart should have vertical bars like a stock chart.
20        Question 2           Change promised to expected

Chapter 2
32        delete               “dividend yield =” from formula (2-5)
43        Example 1            Combined tax rate should be 18.6%; not 8.6%
48        Internet R&Q         www.cra-arc.gc.ca only
49        Problem 6b           Fourth line should be mark-up; not makeup

Chapter 3
81        Problem 13b          Compute the following ratios for both firms:
                               Not” Compute inventory turnover based on cost of goods
                               sold for each year.”
84          Problem 27         and cost of goods sold of $500,000; not $50,000
88          Problem 33         ROE for 2004 should be 9.8%; not 9.6%
                               2005 column should be 2003 and 2003 should be 2005
89          Problem 34         2004 dividend should be $60,600; not $60,000
91          Problem 35         Balance sheets for 2005 and 2004 are marginally incorrect.
                               Ratios only affected marginally. Although new balance
                               sheets and solution are available it may not be necessary
                               to change at this time.

Chapter 4

118         Problem 17         2ndparagraph add; Fixed overhead is $5,000 monthly.
                               Before, “The labour figures are:”

Chapter 5
132       last paragraph       3rd line fixed assets should be capital assets
152       Problem 16           Should be “capital assets will increase by $550,000”
154       Problem 20d          first line should be $6 million rather than $5 million
157       Problem 23           Solution omitted in Instructor’s Manual. Now available.

Chapter 11
374      Problem 20            Preferred stock and Common equity are reversed as percent
                               of capital structure
377         Problem 30         Should be Common shares not Common shares capital
381         Formula 11A-2      The Rjs (j) should be Rfs (f). Two of them.
386         Problem 8          Should be 14% Debentures; not 16%
Chapter 13
463      Table 13-6           Coefficient of Correlation should read -1, 0, +1 not -1, 10,
                              11
Chapter 14
485      second paragraph after bullets, last line should read “to raise funds in the
                          primary markets” not secondary markets
489      H1 Heading       Should be Government Securities only

Chapter 15
527      Problem 8c           drop “only” from 1st line

Chapter 19
667      Problem 25b          2nd line change basic to diluted

Chapter 21
729      Problem 13a          Should be Royal Minty not Nickel Plains