For MBA/graduate students taking a course in corporate finance.
Using the unifying valuation framework based on the Law of One Price, top researchers Jonathan Berk and Peter DeMarzo
set the new standard for corporate finance textbooks. Corporate Finance blends coverage of time-tested principles
and the latest advancements with the practical perspective of the financial manager. With this ideal melding of
the core with modern topics, innovation with proven pedagogy, Berk and DeMarzo establish the new canon in finance.
The second edition reflects the constantly changing world of finance, including information on the financial crisis
of 2007, new behavioral finance research, and updated practitioner interviews.
For programs and professors who would like a streamlined book that is specifically tailored to the topics covered
in the first one-semester course, Corporate Finance: The Core.
Table of Contents
Table of Contents
Part I: Introduction
1 The Corporation
2 Introduction to Financial Statement Analysis
Part II: Tools
3 Arbitrage and Financial Decision Making
4 The Time Value of Money
5 Interest Rates
Part III: Basic Valuation
6 Investment Decision Rules
7 Fundamentals of Capital Budgeting
8 Valuing Bonds
9 Valuing Stocks
Part IV: 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 V: Capital Structure
14 Capital Structure in a Perfect Market
15 Debt and Taxes
16 Financial Distress, Managerial Incentives, and Information
17 Payout Policy
Part VI: Valuation
18 Capital Budgeting and Valuation with Leverage
19 Valuation and Financial Modeling: A Case Study
Part VII: Options
20 Financial Options
21 Option Valuation
22 Real Options
Part VIII: Long-Term Financing
23 The Mechanics of Raising Equity Capital
24 Debt Financing
25 Leasing
Part IX: Short-Term Financing
26 Working Capital Management
27 Short-Term Financial Planning
Part X: Special Topics
28 Mergers and Acquisitions
29 Corporate Governance
30 Risk Management
31 International Corporate Finance
