Corporate Finance: The Core, Global Edition, 5th edition

For MBA/graduate students taking a course in corporate finance

An emphasis on modern theory blended with practice elevates students' financial decision making

Using the valuation framework based on the Law of One Price, top researchers Jonathan Berk and Peter DeMarzo have set the new canon for corporate finance textbooks. Corporate Finance: The Core, 5th Edition blends coverage of time-tested principles and the latest advancements with the practical perspective of the financial manager. Students have the opportunity to practice finance to learn finance by solving quantitative business problems like those faced by today's professionals. With built-in resources to help students master the core concepts, students develop the tools they need to make sound financial decisions in their careers.

Corporate Finance: The Core, 5th Edition fits programs and individual professors who desire a streamlined book that is specifically tailored to the topics covered in the first one-semester course. For those who would like to use a text in a two semester, or more course, please see Corporate Finance, 5th Edition by the same authors.

Key features

• The Law of One Price: A Unifying Principle of Valuation. The Law of One Price is used as a framework, reflecting the modern idea that the absence of arbitrage is the unifying concept in valuation. This theme is introduced in Chapter 3, revisited in each Part Opener, and integrated throughout. It connects theory to practice, and unifies what might appear to students as disparate topics that comprise the course syllabus.
• Options for Teaching Risk and Return. Chapter 3 briefly introduces the concept of risk and return so that it can be used in early chapters. Later, Part IV is flexible and allows instructors to opt for brief or comprehensive coverage of the topic.
• Emphasis of Capital Budgeting and Valuation. Capital budgeting and valuation is presented in two distinct stages. In Chapter 8, the first stage focuses on cash flows, while the second stage focuses on capital budgeting and valuation in the real world in Chapter 18 and the capstone Chapter 19.
• Study aids with a practical focus. To be successful, students need to master the core concepts and learn to solve problems that today's practitioners face.
• Common Mistakes boxes alert students to frequently made mistakes stemming from misunderstanding core concepts and calculations - in the classroom and in the field.
• Worked examples accompany every important concept using a step-by-step procedure that models the solution and process.

New to this edition

• Corporate Finance: The Core features real companies, leaders, and practices:
• Six interviews with notable practitioners, such as Janet Yellen, Susan Athey, and Anne Martin, highlight leaders in the field and address the effects of the financial crisis and ongoing European sovereign debt crisis. Nobel Prize boxes reflect recent prizes awarded for finance.
• General Interest boxes highlight timely material from financial publications about business problems, real-company practices, and the latest tax rates.
• Global Financial Crisis boxes examine individuals and companies in crisis around the world and include updated discussion on The Dodd-Frank Act's implementation and relevancy.
• Berk and DeMarzo introduce recent advances in financial research, data, events, and technologies, including:
• Updates consistent with the Tax Cut and Jobs Act of 2017
• Updated discussions of fintech, cryptocurrencies, blockchain, and capital budgeting
• New discussion on debt and taxes, and expanded information on international corporate finance
• Personal Finance examples demonstrate how students can apply managerial finance concepts, tools, and techniques to their own personal finance decisions.
• Chapter-Opening notation boxes define the variables and acronyms used in the chapter and serve as a 'legend' for students' reference.
• Practice finance to learn finance. Working problems are the proven way to cement and demonstrate an understanding of finance.
• End-of-Chapter Excel Projects exercises help students gain important statistical skills and become more proficient in Excel. Excel exercises with an icon are assignable and auto-graded in MyLab Finance.
• Concept Check questions at the end of each section enable students to test their understanding and target areas for further review.
• End-of-chapter problems (and solutions) written by Jonathan Berk and Peter DeMarzo offer instructors the opportunity to assign accurate, first-rate problems that are consistent with chapter content.
• Data Cases present in-depth business scenarios with questions to guide students' analysis. Many questions involve the use of internet resources and Excel. Cases on bitcoin, JMP, and more have been added to the 5th Edition.