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Corporate Finance, Global Edition, 5th edition

Published by Pearson (June 11, 2019) © 2019

  • Jonathan Berk Stanford University
  • Peter DeMarzo Stanford University

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Help your students master modern financial principles and develop their decision-making skills.

Corporate Finance, 5th Edition, is an industry-leading text that examines core financial principles and the latest advancements through the practical perspective of a financial manager.

This edition uses the valuation framework based on the Law of One Price and provides opportunity to practice finance by solving quantitative business problems faced by professionals.

With a host of features and learning aids to help students master jargon and understand practical applications of Finance, this textbook is ideal for MBA and graduate students studying corporate finance.

Also available with MyLab Finance.

Hallmark Features of this title

A Methodology that connects theory to practice

  • The Law of One Price is used as a framework, unifying what might appear to students as disparate topics.
  • Options for Teaching Risk and Return are introduced in chapter 3 allowing it to be used in early chapters.
  • Study aids with a practical focus allow students to master the core concepts and learn to solve modern problems.

Built-in tools to encourage students to 'think finance'

  • Personal Finance examples demonstrate how to apply managerial finance concepts, tools, and techniques to personal decisions.
  • Common Mistakes boxes alert students to frequently made mistakes.
  • Worked examples accompany every important concept using a step-by-step procedure that models the solution and process.

Pearson's webinar series "Changing Perspectives": a conversation regarding active learning in Corporate Finance

Authors Jonathan Berk and Peter DeMarzo shared useful tips on how to keep finance students engaged and spoke more about the interactive tools available with the textbook's new edition.

The webinar also focused on "clearing the air" regarding common misconceptions amongst students, which could impact their engagement and understanding with the subject, encouraging them to experiment with visualisation data to deepen their understanding of the subject.

Read our blog post "Bringing learning to life via interactive finance tools" for more information and watch the YouTube video of the webinar.

New to this edition

Updated material and added features enhance student engagement with the subject.

  • General Interest boxes highlight timely material from financial publications regarding business problems, real-company practices, and the latest tax rates.
  • Chapter-Opening notation boxes define the variables and acronyms used in the chapter and serve as a 'legend' for students' reference.
  • Concept Check questions at the end of each section enable students to test their understanding and target areas for further review.

Additional business scenarios and interviews with notable practitioners help students understand real-world practice.

  • DataCases present in-depth business scenarios with questions to guide student analysis. Many questions involve the use of Internet resources and Excel. Cases on bitcoin, JMP, and more have been added to the 5th Edition.
  • Six interviews with notable practitioners, such as Janet Yellen, Susan Athey, and Anne Martin, address the effects of the financial crisis and the ongoing European sovereign debt crisis.
  • Berk and DeMarzo introduce recent advances in financial research, data, events, and technologies, including fintech, cryptocurrencies, blockchain, and capital budgeting.

Features of MyLab® Finance for the 5th Edition.

Corporate Finance is available with MyLab® Finance, a fully integrated homework and tutorial system.

  • MyLab® Finance revolutionises homework and practice with material written and developed by Jonathan Berk and Peter DeMarza.
  • Homework Manager Tools allow instructors to easily create and assign tests, quizzes, or graded homework assignments.
  • Algorithmically generated, end-of-chapter problems, and integrated assessment material, allow you to set online assignments for your students.
  • Useful tutorial and pedagogical learning aids are now available for your students to access, with links to eText for further review.
  • Pre-built Practice Tests generate an individualised Study Plan for your students, pinpointing the areas they need to focus on.

A series of interactive material help students master key concepts and connect theory with practice.

  • The Auto-Graded Excel Projects allow you to support student learning with Excel content, offering opportunities for them to practice and master the program.
  • Author Solution Videos use examples using Maths, financial calculators, and spreadsheets to familiarise students with the jargon and further support their learning.
  • A Test Bank is available to create assignments for your students with an automatic grading system via Gradebook.

Features of Pearson eText for the 5th Edition

"Think Finance" from theory to practice, and study core modern financial principles to improve your decision-making skills.

Corporate Finance, 5th Edition is an industry-leading text with built-in resources and worked examples to help you master financial jargon and develop the tools you need to solve problems like a modern practitioner.

Extend learning beyond the classroom with Pearson eText – an easy-to-use digital textbook.

Optimise study time

  • Find it fast. Enhanced search makes it easy to find a key term or topic to study. Students can also search videos, images, and their own notes.
  • Get organised and get results. Students can customise how they study and add their own notes, bookmarks, and highlights directly in their eText.
  • Study in a flash.Students can use pre-built flashcards or create their own to study how they like.

Meet students where they are

  • Read online or offline. With the mobile app, you and your students can access your eText anytime, even offline.
  • Listen anywhere. Learners can listen to the audio version of their eText for most titles, whether at home or on the go.
  • Watch and learn.Videos and animations within the eText bring tricky concepts to life (available in selected titles).

PART 1: INTRODUCTION

  1. The Corporation and Financial Markets
  2. Introduction to Financial Statement Analysis
  3. Financial Decision Making and the Law of One Price

PART II: TIME, MONEY, AND INTEREST RATES

  1. The Time Value of Money
  2. Interest Rates
  3. Valuing Bonds

PART III: VALUING PROJECTS AND FIRMS

  1. Investment Decision Rules
  2. Fundamentals of Capital Budgeting
  3. Valuing Stocks

PART IV: RISK AND RETURN

  1. Capital Markets and the Pricing of Risk
  2. Optimal Portfolio Choice and the Capital Asset Pricing Model
  3. Estimating the Cost of Capital
  4. Investor Behavior and Capital Market Efficiency

PART V: CAPITAL STRUCTURE

  1. Capital Structure in a Perfect Market
  2. Debt and Taxes
  3. Financial Distress, Managerial Incentives, and Information
  4. Payout Policy

PART VI: ADVANCED VALUATION

  1. Capital Budgeting and Valuation with Leverage
  2. Valuation and Financial Modeling: A Case Study

PART VII: OPTIONS

  1. Financial Options
  2. Option Valuation
  3. Real Options

PART VIII: LONG-TERM FINANCING

  1. Raising Equity Capital
  2. Debt Financing
  3. Leasing

PART IX: SHORT-TERM FINANCING

  1. Working Capital Management
  2. Short-Term Financial Planning

PART X: SPECIAL TOPICS

  1. Mergers and Acquisitions
  2. Corporate Governance
  3. Risk Management
  4. International Corporate Finance

Jonathan Berk 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.

Before coming to Stanford, he was the Sylvan Coleman Professor of Finance at Hans School of Business at the University of California, Berkeley. Prior to earning his Ph.D., he worked as an Associate at Goldman Sachs (where his education in finance really began).

Peter DeMarzo is the Staehelin Family Professor of Finance at the Graduate School of Business, Stanford University.

He is the current President of the American Finance Association and a Research Associate at the National Bureau of Economic Research. He teaches MBA and Ph.D. courses in Corporate Finance and Financial Modeling.

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MyLab

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Extend learning beyond the classroom. Pearson eText is an easy-to-use digital textbook. It lets students customise how they study and learn with enhanced search and the ability to create flashcards, highlight and add notes all in one place. The mobile app lets students learn wherever life takes them, offline or online.

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