PART 1: INTRODUCTION 1. The Corporation 2. Introduction to Financial Statement Analysis 3. Financial Decision Making and the Law of One Price   PART 2: TIME, MONEY, AND INTEREST RATES 4. The Time Value of Money 5. Interest Rates 6. Valuing Bonds    PART 3: VALUING PROJECTS AND FIRMS 7. Investment Decision Rules 8. Fundamentals of Capital Budgeting 9. Valuing Stocks    PART 4: RISK AND RETURN 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 Behavior and Capital Market Efficiency    PART 5: CAPITAL STRUCTURE 14. Capital Structure in a Perfect Market 15. Debt and Taxes 16. Financial Distress, Managerial Incentives, and Information 17. Payout Policy    PART 6: ADVANCED VALUATION 18. Capital Budgeting and Valuation with Leverage 19. Valuation and Financial Modeling: A Case Study   PART 7: OPTIONS 20. Financial Options 21. Option Valuation 22. Real Options PART 8: LONG-TERM FINANCING 23. Raising Equity Capital 24. Debt Financing 25. Leasing    PART 9: SHORT-TERM FINANCING 26. Working Capital Management 27. Short-Term Financial Planning   PART 10: SPECIAL TOPICS 28. Mergers and Acquisitions 29. Corporate Governance 30. Risk Management 31. International Corporate Finance

  Methodology that Connects Theory to Practice 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 explicitly introduced in Chapter 3, revisited in each Part Opener, and integrated throughout the text—motivating all major concepts. This methodology directly connects theory to practice, and unifies what might appear to students as disparate topics that comprise the course syllabus (corporate finance, investments, and valuation). Options for Teaching Risk and Return. Chapter 3 briefly introduces the concept of risk and return. Using the no-arbitrage concept, the reasoning behind evaluating risk relative to a benchmark is explained conceptually and allows for use of the concept of risk and return in early chapters. Later, the structure of 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. The first, which appears in Chapter 8, 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.   Learning Aids that Teach Students to ‘Think Finance’ 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: Notation Boxes: Each chapter opens by defining the variables and acronyms used in the chapter as a 'legend' for students' reference. Timelines: Introduced in Chapter 4, timelines are emphasized as the important first step in solving every problem that involves cash flows. 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. Using Excel boxes: Provide hands-on instruction of Excel techniques and include screenshots to serve as a guide for students. Spreadsheet Tables: Select tables are available as Excel files, enabling students to change inputs and manipulate the underlying calculations. Practice Finance to Learn Finance: Working problems are the proven way to cement and demonstrate an understanding of finance. Concept Check questions at the end of each section enable students to test their understanding and target areas in which they need further review. End-of-chapter problems written personally by Jonathan Berk and Peter DeMarzo offer instructors the opportunity to assign first-rate materials to students for homework and practice with the confidence that the problems are consistent with chapter content. Both the problems and solutions, which were also written by the authors, have been class-tested and accuracy checked to ensure quality. Data Cases present in-depth scenarios in a business setting with questions designed to guide students' analysis. Many questions involve the use of Internet resources and Excel techniques. Study Aids with a Practical Focus. To be successful, students need to master the core concepts and learn to identify and solve problems that today's practitioners face. Common Mistakes boxes alert students to frequently made mistakes stemming from misunderstanding core

Coverage of The Latest Developments in the Field UPDATED! Focus on the 2007–2009 Financial Crisis and Sovereign Debt Crisis. Twenty-two Global Financial Crisis boxes reflect the reality of the recent financial crisis and ongoing sovereign debt crisis, noting lessons learned. Boxes across the book illustrate and analyze key details. Applications that Reflect Real Practice. Corporate Finance features actual companies and leaders in the field: Six interviews with notable practitioners highlight leaders in the field and address the effects of the financial crisis and ongoing European sovereign debt crisis. Nobel Prize boxes reflect recent Nobel prizes awarded for material covered in the book. Specific Content Changes Material that addresses the implications of negative interest rates has been added throughout the book. Coverage describes the ongoing changes to how stocks are traded worldwide. Also, the Dodd-Frank Act information has been updated and a new interview with M. Hathaway, NASDAQ has been included (Chapter 1). Interview with Ruth Porat, Google and an expanded explanation of key financial ratios have been added (Chapter 2). Box on the dynamics of stock index arbitrage and high frequency trading has been added (Chapter 3). Box on annuity due has been included (Chapter 4). Data Case on Florida’s pension plan liability has been added (Chapter 5). Expanded coverage of the European debt crisis, including a case study on the Greek default, has been added (Chapter 6). Common Mistake box on the sunk cost fallacy has been included (Chapter 8). Extensive data updates throughout have been made to reflect current market conditions (Chapter 10). Common Mistake box on using a single cost of capital in multidivisional firms and a new Using Excel box on estimating beta have been added (Chapter 12). UPDATED! Coverage of recent developments in asset pricing, discussion of fund manager performance, and an interview with Jonathan Clements, former columnist at WSJ, have been updated or expanded (Chapter 13). Material that relates the capital structure to the current debate on bank leverage has been added throughout Part 5. Box on the repatriation tax controversy has been included (Chapter 15). UPDATED! Discussion of corporate cash retention has been added (Chapter 17). Interview with Zane Rowe, VMWare, and material explaining the relation between DCF and residual income valuation methods, have been added (Chapter 18). Using Excel box “Summarizing Model Outputs” has been added (Chapter 19). Redesigned sections of Chapter 22, including new examples of decision tree methodology, make the exposition clearer. Increased coverage of early stage financing, including a detailed explanation of angel financing and venture capital deal terms; an expanded explanation of typical returns investors make; a new Common Mistake box on misinterpreting startup valuations; and a new interview with Kevin Laws, AngelList, have all been added (Chapter 23). Box on Detroit’s municipal bond default has been included (Chapter 24). UPDATED! New FASB rules for lease accounting and a new interview with Mark S. Long, XOJet have been added (Chapter 25). Box on the Ex-Im Bank controversy has been included (Chapter 27). Expand