NPV as the master decision rule
The textbook centers capital budgeting on net present value, discounting future cash flows to compare investments against their cost. Accept projects with positive NPV because they add value to the firm.
Corporate finance
3 ideas
Risk, return, and the cost of capital
Ross links required return to risk through models like CAPM, deriving the discount rate a project must beat. The cost of capital is the hurdle that ties financing to investment.
Capital structure and Modigliani-Miller
The book uses the Modigliani-Miller propositions as the baseline for how debt and equity mix affects firm value, then adds taxes and distress costs. Financing choices matter only through frictions from the frictionless benchmark.