For undergraduate courses in corporate finance or financial management.

Help students practice and connect to real-world financial decisions

Fundamentals of Corporate Finance presents finance as one unified whole based on two simple, powerful ideas: (1) valuation drives decision making—the firm should take projects for which the value of the benefits exceeds the value of the costs—and (2) in a competitive market, market prices (rather than individual preferences) determine values. The authors combine these two ideas with the Valuation Principle, and from it we establish all the key ideas in corporate finance.

With the increasing focus on finance in the news, today's undergraduate students arrive in the classroom with a greater interest in finance than many of their predecessors. The challenge is to use that natural interest and motivation to overcome their fear of the subject and communicate these time-tested core principles. By providing examples involving familiar companies such as Air Canada, Apple and BCE; making consistent use of real-world data; and demonstrating personal finance applications of core concepts, we strive to keep even nonfinance majors engaged.

Hallmark features of this title

• With an emphasis on bridging theory to practice, the authors help students master the core concepts and solve problems that today's practitioners face.
• Timely, practical applications prepare students to use financial concepts in their future careers.
• Integrated support for Microsoft® Excel® and a financial calculator will save instructors class time while allowing students to “think finance” using the requisite tools.
• To learn finance, students need to practice finance, and instructors have flexibility in designing their assignments with a wide range of problems, cases, and projects.

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 and updated features of this title

In response to reviewers’ feedback we retained the sequence of chapters first introduced in the second Canadian edition. We have thoroughly updated each of the chapters in the text. Changes include:

• Chapter 5 Interest Rates includes enhanced discussion on how to do interest rate conversions. We have also updated data and figures with respect to inflation, interest rates, and yield curves. We enhanced the discussion on how interest rates are set by the forces of supply and demand for funds to include how central banks can intervene in this process by creating money and buying bonds versus issuing bonds. Here we discuss the negative real rates that existed as we emerged from the COVID-19 pandemic as high inflation took hold. The Bank of Canada response of raising interest rates and the effects on businesses and individuals are explained in a new interview with Beata Caranci, Chief Economist and Senior VP of TD Bank Group.
• Chapter 9 Fundamentals of Capital Budgeting now includes a revised Common Mistake Box about CCA tax shields that is expanded significantly to include Accelerated Investment Incentives. A new end-of chapter problem has been added to specifically addresses this material. A major revision is the introduction of a new section on qualitative analysis of competitive advantage that should be used to complement the quantitative analysis used in the rest of the chapter; a new end-of-chapter problem is added to specifically address this new section. We also added two new interviews to the chapter, including one that deals with capital budgeting in a Canadian Indigenous context.
• Chapter 19 Working Capital Management includes company and data updates. We contrasted the inventory management at Canada Goose and Walmart and added a new box on how COVID-19 impacted supply chains and inventories at many companies during the pandemic. Another box was added about firms hoarding cash during times of disruption such as the pandemic. A new data case was also included at the end of the chapter.