An Emphasis on Core Financial Principles to Elevate Individuals’ Financial Decision Making
Using the unifying 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, Fourth Edition blends coverage of time-tested principles and the latest advancements with the practical perspective of the financial manager, so students have the knowledge and tools they need to make sound financial decisions in their careers.
For a streamlined book specifically tailored to the topics covered in the first one-semester course, Corporate Finance: The Core is also available by Jonathan Berk and Peter DeMarzo.
MyFinanceLabTM not included. Students, if MyFinanceLab is recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyFinanceLab should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.MyFinanceLab is an online homework, tutorial, and assessment product designed to personalize learning and improve results. With a wide range of interactive, engaging, and assignable activities, students are encouraged to actively learn and retain tough course concepts.
For MBA/graduate students taking a course in corporate finance.
- 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.
o Common Mistakes boxes alert students to frequently made mistakes stemming from misunderstanding core concepts and calculations -- in the classroom and in the field.
o Worked examples accompany every important concept using a step-by-step procedure that models the solution and process.
- Nobel Prize boxes reflect recent Nobel prizes awarded for material covered in the text.
- A simplified presentation of mathematics. One of the hardest parts of learning finance is mastering the jargon, math, and non-standardized notation. Corporate Finance systematically uses the following:
o Chapter-Opening notation boxes define the variables and acronyms used in the chapter and serve as a 'legend' for students' reference.
o Timelines are emphasized as an important first step in solving every problem that involves cash flows.
o Numbered and labeled equations. The first time a full equation is given in notation form it is numbered. Key equations are titled and revisited in the summary and in end papers.
- Practice finance to learn finance. Working problems are the proven way to cement and demonstrate an understanding of finance.