Corporate Finance, Canadian Edition, 6th edition

Published by Pearson Canada (March 14, 2024) © 2025
  • Jonathan Berk
  • Peter DeMarzo
  • David A. Stangeland

Title overview

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, Peter DeMarzo and David Stangeland have set the new canon for corporate finance textbooks. Corporate Finance 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.

Hallmark features of this title

  • Worked Examples accompany every important concept using a step-by-step procedure that illustrates both the Problem and its Solution. Clear labels make them easy to find for help with homework or studying.
  • Common Mistake boxes alert students to frequently made mistakes stemming from misunderstanding core concepts and calculations, as well as mistakes made in practice.
  • Finance in Times of Disruption boxes reflect the reality of recent financial crises and the ongoing sovereign debt crisis, noting lessons learned.
  • End-of-chapter problems written personally by Jonathan Berk, Peter DeMarzo, and David Stangeland offer instructors the opportunity to assign first rate materials to students for homework and practice with the confidence that the problems are consistent with the chapter content. Both the problems and solutions, which were also written by the authors, have been class-tested and accuracy checked to ensure quality. Selected end-of-chapter problems are also accompanied by Excel spreadsheets with different icons indicating what the spreadsheets are for, and where they can be found.

New GenAI Study Tool

We’ve heard how important it is for students to use reliable AI tools in responsible and productive ways. To that end, Pearson is focused on creating tools that combine the power of generative AI with trusted Pearson content to provide students with a simplified study experience, delivering on-demand and personalised support that compliments your teaching and aligns with the text you’ve chosen. The Study Tool is available to students who access the Pearson eText on its own or through MyLab.

What can the AI Study Tool do?

  • Generate simplified explanations of challenging sections
  • Summarize material to help learners focus on key topics and ideas
  • Students can ask for multiple choice or short answer questions related to a specific chapter or section to help fill knowledge gaps
  • For extra practice, students can also generate flashcards and notes based on their chat interaction with the tool

New to this Edition

  • As the world shifts to a greater reliance on digital media, it is appropriate that this resource evolves as well. This sixth edition is the first fully digital version of Corporate Finance. Instructors and students will find that, although the medium has changed, the content is fully consistent with prior editions
  • We have updated all text discussions and figures, tables, and facts to accurately reflect developments in the field in the last two years.
  • Many of our tables and figures now have interactive versions on MyLab and in the eTextbook; these can be interesting for students to manipulate or for an instructor’s use while teaching.
  • Our ”Global Financial Crisis” boxes have all been updated and renamed to ”Finance in Times of Disrup-tion” as we bring in more recent crises into the narrative.
  • We brought in a diverse group of interviewees with six new interviews that provide real-world views and practices related to the concepts and topics covered in the chapters. We improved the diversity of many of the names used in examples so as to better reflect Canadian society.

Key features

Important Digital Assets in MyLab Finance

  • New GenAI Study Tool. We’ve heard how important it is for students to use reliable AI tools in responsible and productive ways. To that end, Pearson is focused on creating tools that combine the power of generative AI with trusted Pearson content to provide students with a simplified study experience, delivering on-demand and personalised support that compliments your teaching and aligns with the text you’ve chosen.
  • Video Lessons: Video lessons are brief two to three-minute instructional videos that cover key definitions and concepts that are embedded within the eTextbook. They reinforce the content by expanding on examples and explaining key graphs and figures, which help students understand essential and difficult concepts. The videos appear in the eTextbook and can be assigned through the multimedia library of MyLab.
  • Interactive Graphs: Available in both the eTextbook and MyLab Finance, interactive graphs and tools offer exploration of the current and historical yield curve (and how it moves in relation to other macro data), analysis of common financial statement data and valuation metrics across firms and industries, a compound interest calculator, use of an annuity calculator with an amortization table, a Modigliani and Miller WACC tool, and an efficient frontier portfolio explorer. Instructors also can link to these tools with pre-populated default values for efficient use in the classroom.
  • Excel Projects: Using proven, field-tested technology, auto-graded Excel Projects let you seamlessly integrate Microsoft® Excel® content into your course without having to manually grade spreadsheets. Students can practise important skills in Excel, helping them master key concepts and gain proficiency with the program. They simply download a spreadsheet, work live on a problem in Excel, and then upload that file back into MyLab. Within minutes, they receive a report that provides personalized, detailed feedback to pinpoint where they went wrong in the problem.
  • Dynamic Study Modules: Using a highly personalized, algorithmically driven process, Dynamic Study Modules continuously assess student performance and provide additional practice in the areas where they struggle the most. Each Dynamic Study Module, accessed by computer, smartphone, or tablet, promotes fast learning and long-term retention.
  • Question Help: MyLab Finance homework and practice questions are correlated to the textbook, and generate algorithmically to give students unlimited opportunity for mastery of concepts. If students get stuck, Learning Aids including Help Me Solve This, View an Example, eText book Pages, and a Financial Calculator walk them through the problem and identify helpful info in the text, giving them assistance when they need it most.
  • Financial Calculator: Students have access to a fully functional financial calculator inside MyLab Finance and a financial calculator app that they can download to their iPhone®, iPad®, or Android device.
  • Video Series: Conceptual videos on several topics that can be challenging for students to grasp, including default risk, market efficiency, diversification, mutual fund performance, and more are available for instructors to assign in the assignment manager, or for student self-study in the multimedia library.
  • Reporting Dashboard: View, analyze, and report learning outcomes clearly and easily, and get the information you need to keep your students on track throughout the course, with the new Reporting Dashboard. Available via the Gradebook and fully mobile-ready, the Reporting Dashboard presents student performance data at the class, section, and program levels in an accessible, visual manner.
  • Easily Scalable and Shareable Content: MyLab Finance enables you to manage multiple class sections, and lets other instructors copy your settings so a standardized syllabus can be maintained across your department. Should you want to use the same MyLab Finance course next semester, with the same customized settings, you can copy your existing course exactly—and even share it with other faculty members.

Table of contents

  1. The Corporation and Financial Markets
  2. Introduction to Financial Statement Analysis
  3. Arbitrage and Financial Decision Making
  4. The Time Value of Money
  5. Interest Rates
  6. Valuing Bonds
  7. Valuing Stocks
  8. Investment Decision Rules
  9. Fundamentals of Capital Budgeting
  10. Capital Markets and the Pricing of Risk
  11. Optimal Portfolio Choice and the Capital Asset Pricing Model
  12. Estimating the Cost of Capital
  13. Investor Behaviour and Capital Market Efficiency
  14. Financial Options
  15. Option Valuation
  16. Real Options
  17. Capital Structure in a Perfect Market
  18. Debt and Taxes
  19. Financial Distress, Managerial Incentives, and Information
  20. Payout Policy
  21. Capital Budgeting and Valuation with Leverage
  22. Valuation and Financial Modeling: A Case Study
  23. Raising Equity Capital
  24. Debt Financing
  25. Leasing
  26. Working Capital Management
  27. Short-Term Financial Planning
  28. Mergers and Acquisitions
  29. Corporate Governance
  30. Risk Management
  31. International Corporate Finance

Author bios

Jonathan Berk, Stanford University, is the A.P. Giannini Professor of Finance at the Graduate School of Business, Stanford University and is a Research Associate at the National Bureau of Economic Research. Prior to earning his PhD, he worked as an Associate at Goldman Sachs (where his education in finance really began). Professor Berk's research interests in finance include corporate valuation, capital structure, mutual funds, asset pricing, experimental economics, and labor economics.

Peter DeMarzo, Stanford University, is the Mizuho Financial Group Professor of Finance and former Senior Associate Dean for Academic Affairs at the Stanford Graduate School of Business. He is also a Research Associate at the National Bureau of Economic Research. He currently teaches MBA and PhD courses in corporate finance and financial modeling. In addition to his experience at the Stanford Graduate School of Business, Professor DeMarzo has taught at the Haas School of Business and the Kellogg Graduate School of Management, and he was a National Fellow at the Hoover Institution.

David Stangeland, PhD, BComm (Distinction), CPA, CMA, did his undergraduate and graduate university education at the University of Alberta in Edmonton. In 1991 he moved to Winnipeg, where he joined the Accounting and Finance Department at the I. H. Asper School of Business at the University of Manitoba. Dr. Stangeland is a Professor of Finance and regularly teaches undergraduate and MBA students corporate finance. Over his career, he has held several Associate Dean positions that oversaw the following programs: under-graduate (Bachelor of Commerce (Honours), MBA, Master of Finance, Master of Supply Chain Management and Logistics, Co-op, and International Exchange; in addition, he fulfilled several appointments as Head of the Department of Accounting and Finance.

Professor Stangeland teaches finance courses at the University of Manitoba and in the Canadian Executive MBA program at the Warsaw School of Economics in Poland. His teaching spans undergraduate, MBA, and PhD courses in corporate finance, investment banking, and international finance.

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