Corporate Finance, Global Edition 4th ed.

Reihe
Pearson
Autor
Jonathan Berk / Peter DeMarzo  
Verlag
Pearson
Einband
Softcover
Auflage
4
Sprache
Englisch
Seiten
1152
Erschienen
September 2016
ISBN13
9781292160160
ISBN
1292160160
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9781292160160
Corporate Finance, Global Edition 4th ed.
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Description

For MBA/graduate students taking a course in corporate finance.

 

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.

Features

This title is a Pearson Global Edition. The Editorial team at Pearson has worked closely with educators around the world to include content, which is especially relevant to students outside the United States.

 

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 concepts and calculations–in the classroom and in the field.

Coverage of The Latest Developments in the Field

  • Modern Research. Berk and DeMarzo introduce recent advances in finance research throughout the book. For example, Chapter 16 is a full-chapter treatment of the effects of financial distress, agency issues, and asymmetric information on the firm's choice of capital structure.
  • Modern Practice. Throughout Corporate Finance the authors connect finance concepts to practice. Chapter 18 shows the relationship between the WACC, APV, and Flow-to-Equity methodologies, and stresses the role of the firm's leverage policy. Then, a unique capstone to capital budgeting, Chapter 19 illustrates the application and real-world implementation of valuation techniques.
  • 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:
    • NEW! Six interviews with notable practitioners highlight leaders in the field and address the effects of the financial crisis and ongoing European sovereign debt crisis.
    • General Interest boxes highlight timely material from financial publications that shed light on business problems and real-company practices.
  • NEW! Nobel Prize boxes reflect recent Nobel prizes awarded for material covered in the book.

Specific Content Changes

·    NEW! Material that addresses the implications of negative interest rates has been added throughout the book.

·    NEW! 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).

·    NEW! Interview with Ruth Porat, Google and an expanded explanation of key financial ratios have been added (Chapter 2).

·    NEW! Box on the dynamics of stock index arbitrage and high frequency trading has been added (Chapter 3).

·    NEW! Box on annuity due has been included (Chapter 4).

·    NEW! Data Case on Florida’s pension plan liability has been added (Chapter 5).

·    NEW! Expanded coverage of the European debt crisis, including a case study on the Greek default, has been added (Chapter 6).

·    NEW! Common Mistake box on the sunk cost fallacy has been included (Chapter 8).

·    NEW! Extensive data updates throughout have been made to reflect current market conditions (Chapter 10).

·    NEW! 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).

·    NEW! Material that relates the capital structure to the current debate on bank leverage has been added throughout Part 5.

·    NEW! Box on the repatriation tax controversy has been included (Chapter 15).

·    UPDATED! Discussion of corporate cash retention has been added (Chapter 17).

·    NEW! Interview with Zane Rowe, VMWare, and material explaining the relation between DCF and residual income valuation methods, have been added (Chapter 18).

·    NEW! Using Excel box “Summarizing Model Outputs” has been added (Chapter 19).

·    NEW! Redesigned sections of Chapter 22, including new examples of decision tree methodology, make the exposition clearer.

·    NEW! 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).

·    NEW! 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).

·    NEW! Box on the Ex-Im Bank controversy has been included (Chapter 27).

·    NEW! Expanded discussion of valuation and premiums paid has been added (Chapter 28).

·    NEW! Discussion of shareholder activism and its recent impact on corporate governance is now included (Chapter 29).

 

MyFinanceLabTM not included. Students, if MyFinanceLab is a 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.

  • NEW! Auto-Graded Excel Projects use proven, field-tested technology, allowing instructors to seamlessly integrate Excel problems into their course.
  • End-of-chapter problems. The values in the problems are algorithmically generated, giving students many opportunities for practice and mastery. Problems can be assigned by professors and completed online by students.
  • Helpful tutorial tools, along with the same pedagogical aids from the text, support students as they study. Links to the eText direct students to the material they most need to review.
  • Interactive Figures. Select in-text graphs and figures that cover topics such as bonds, stock valuation, NPV, and IRR have been digitally enhanced to allow students to interact with variables to affect outcomes and bring concepts to life.
  • Video clips cover high-profile firms such as Boeing, Cisco, Delta, and Intel through interviews and analysis. The videos focus on core topical areas, including capital budgeting, mergers and acquisitions, and risk and return.
  • Finance in the News provides weekly postings of a relevant and current article from a newspaper or journal article with discussion questions that are assignable in MyFinanceLab.
  • Live news and video feeds from The Financial Times and ABC News provide real-time news updates.
  • Author Solution Videos walk students through the in-text examples using math, the financial calculator, and spreadsheets.
  • UPDATED! HTML5 Player. In addition to matching the Flash player’s support of Accessibility requirements, the HTML5 player has a new “Show Work” feature to allow students to enter text either from a keyboard or stylus and to draw freehand on different backgrounds, such as a coordinate graph, with multiple fonts and colors. Students can also continue to upload images such as phone photos of handwritten work. Printing enhancements include:
    • a more pen-and-paper-friendly layout of exercises
    • the ability for instructors to choose whether to print the header; to include an honor statement; and to print with answers in line, after each question, or on a separate sheet

New to this Edition

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).
  • Expanded discussion of valuation and premiums paid has been added (Chapter 28).
  • Discussion of shareholder activism and its recent impact on corporate governance is now included (Chapter 29).

MyFinanceLabTM not included. Students, if MyFinanceLab is a 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.

  • Auto-Graded Excel Projects use proven, field-tested technology, allowing instructors to seamlessly integrate Excel problems into their course.
  • UPDATED! HTML5 Player. In addition to matching the Flash player’s support of Accessibility requirements, the HTML5 player has a new “Show Work” feature to allow students to enter text either from a keyboard or stylus and to draw freehand on different backgrounds, such as a coordinate graph, with multiple fonts and colors. Students can also continue to upload images such as phone photos of handwritten work. Printing enhancements include:
    • a more pen-and-paper-friendly layout of exercises
    • the ability for instructors to choose whether to print the header; to include an honor statement; and to print with answers in line, after each question, or on a separate sheet

Table of Contents

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