Fundamentals of Corporate Finance By Jonathan Berk

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KEY BENEFIT Fundamentals of Corporate Finance's applied perspective cements students' understanding of the modern-day core principles by equipping students with a problem-solving methodology and profiling real-life financial management practices, all within a clear valuation framework.
Financial statement analysis, the valuation principles, NPV and the time value of money, interest rates, bonds, investment decision rules, capital budgeting, valuing stocks, debt financing, payout policy, financial planning, insurance and risk management, and international corporate finance.
MARKET For business professionals seeking to understand the basic principles of corporate finance.
Fundamentals of Corporate Finance

I am a professor and it helped me a lot to build content and create exercises for the students. 737 As an MBA student it really helps me with a lot of information and guidance.. however im not good at numbers..there is a recomanded chapter for those who want to start a new business in accordance with finance principals and methods.. 737 Summary: A great book with examples. I would consider it for sure if trying to get the basics of corporate finance down. It does have some bonus stuff on the equity capital markets. The stuff on bonds is a bit less interesting.

I saw this in my laundry room and thought it might make for a good review. It's always interesting to see what people are learning in formal classes. I ended up being fairly impressed. It is definitely by practitioners for practitioners. The book does an excellent job of including interviews from people that are newly out of uni and sage old dogs that have been in the business for a while.

Dork that I am, it was nice to review the stats and all the different ways that you are taught to think about a company's financials in the way of their health, value, and profitability. I had forgotten about the Dupont identity as I personally don't use it quite as much. But I'm actually quite glad to review it as I don't think I fully appreciated it when I was first learning it.

I do think his section on Systematic and Non-Systematic risk was a bit confusing. This might be because I don't just use CAPM, which I think is where he's coming from. His terminology is of course correct, it's just that when you start to add more variables, the point of view for what can and cannot be diversified and how you think about what the errors mean is very different. So in other words unsystematic risk - in this framework - is diversify-able, and systematic risk (market risk) is not diversify-able.

So when he says about unsystematic risk: Because investors can eliminate unsystematic risk 'for free' by diversifying their portfolio, they will not require (nor deserve) a reward or risk premium for bearing it. Kinda, but not really. Here, you are using CAPM with no alpha due to asset selection. Then the idea that you cannot diversify out systematic risk (things like market crashes, etc), but this assumes no ability to short or otherwise hedge the book. As a result, I got a bit confused on the terms at first and then remembered this is from 2010 and although things had already gotten more advanced at that point by a lot, this was (and may still be) the way it was taught.

Otherwise, I really love all the anecdotes and commentary. I forgot about the ways of thinking about put-call parity from the perspective of the bond markets. IMO, it's described from the point of view of the treasury function in a corp. Still, I'm def a bit weaker here than I realized so it's worth getting a bit smarter just to shore up this side of my knowledge. They do a good job of describing FX hedging in the context of the of Corp deals and also as a part of the treasury function.

The black scholes section on options is surprisingly easy to understand and doesn't get too deep in ways that don't matter to corp finance.

It's interesting that they don't do the DPOs that have become popular in the current day. In fairness, I really didn't see them until much later than this book was written. At the same time, these writers seem super competent. Would love to hear their thoughts on it. Possibly if you're considering this text book, just preview a later version. I am using Version 2. 737 I read selections of this for a financial economics class. 737