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Principles of Corporate Finance

ISBN10: 1266215646 | ISBN13: 9781266215643

Principles of Corporate Finance
ISBN10: 1266215646
ISBN13: 9781266215643
By Richard Brealey, Stewart Myers, Franklin Allen and Alex Edmans

* The estimated amount of time this product will be on the market is based on a number of factors, including faculty input to instructional design and the prior revision cycle and updates to academic research-which typically results in a revision cycle ranging from every two to four years for this product. Pricing subject to change at any time.

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Brealey: Principles of Corporate Finance bridges the gap between financial theory and practical application for corporate finance. It emphasizes the importance of understanding financial theory to adapt to non-routine situations and evolving market conditions. By explaining why companies and financial markets behave as they do, the book equips managers with the tools to make informed decisions, not just based on experience but backed by theory. The authors address controversies within financial theory, offering balanced viewpoints while emphasizing practical applications to increase company value.

The latest edition of Principles of Corporate Finance represents a significant step forward in both clarity and pedagogy. Every chapter has been revised—some extensively—incorporating the expertise of Alex Edmans, a distinguished scholar in corporate finance. Principles focuses on making complex concepts more intuitive by breaking down dense material into bite-sized, easy-to-digest sections. Key terms and principles are now highlighted for quick reference, and long lists have been reorganized into structured bullet points with brief summaries. Where appropriate, mathematical and theoretical explanations have been replaced with real-world analogies and practical insights to ensure concepts resonate beyond the classroom.

To further enhance student learning, Principles has expanded its Beyond the Page chapter features, now offering over 150 interactive applications that bring financial concepts to life. These resources allow students to explore real-world case studies, from understanding GameStop’s speculative trading frenzy to analyzing the impact of COVID-19 on stock risk. New Sense Check boxes encourage students to critically assess financial calculations, ensuring they develop the intuition needed to avoid common errors in professional settings. Meanwhile, Common Confusions sections clarify frequently misunderstood concepts, helping students build a stronger foundation in corporate finance. Whether through the printed text, the interactive eBook, or Principles' extensive Connect tools, this edition provides a richer, more engaging learning experience than ever before.

PART ONE: VALUE
1. Introduction to Corporate Finance
2. How to Calculate Present Values 
3. Valuing Bonds 
4. Valuing Stocks 
5. Net Present Value and Other Investment Criteria 
6. Making Investment Decisions with the Net Present Value Rule 

PART TWO: RISK
7. Risk, Diversification, and Portfolio Selection 
8. The Capital Asset Pricing Model 
9. Risk and the Cost of Capital

PART THREE: BEST PRACTICES IN CAPITAL BUDGETING
10. Project Analysis 
11. How to Ensure That Projects Truly Have Positive NPVs 

PART FOUR: FINANCING DECISIONS AND MARKETING EFFICIENCY
12. Efficient Markets and Behavioral Finance 
13. An Overview of Corporate Financing 
14. How Companies Issue Securities 

PART FIVE: PAYOUT POLICY AND CAPITAL STRUCTURE
15. Payout Policy 
16. Capital Structure in Perfect Capital Markets 
17. How Much Should a Corporation Borrow? 
18. Financing and Valuation 

PART SIX: CORPORATE OBJECTIVES AND GOVERNANCE
19. Corporate Governance 
20. Stakeholder Capitalism and Responsible Business 

PART SEVEN: OPTIONS
21. Understanding Options 
22. Valuing Options 
23. Real Options

PART EIGHT: DEBT FINANCING
24. Credit Risk and the Value of Corporate Debt 
25. The Many Different Kinds of Debt 
26. Leasing 

PART NINE: RISK MANAGEMENT
27. Managing Risk 
28. International Financial Management 

PART TEN: FINANCIAL PLANNING AND WORKING CAPITAL MANAGEMENT
29. Financial Analysis 
30. Financial Planning 
31. Working Capital Management 

PART ELEVEN: MERGERS, CORPORATE CONTROL, AND GOVERNANCE
32. Mergers 
33. Corporate Restructuring 

PART TWELVE: CONCLUSION
34. Conclusion: What We Do and Do Not Know about Finance

About the Author

Richard Brealey

Richard A. Brealey - Emeritus Professor of Finance at London Business School. He is the former president of the European Finance Association and a former director of the American Finance Association. He is a fellow of the British Academy and has served as a special adviser to the Governor of the Bank of England and director of a number of financial institutions. Other books written by Professor Brealey include Introduction to Risk and Return from Common Stocks.

Stewart Myers

Stewart C. Myers - Emeritus Professor of Financial Economics at MIT’s Sloan School of Management. He is past president of the American Finance Association, a research associate at the National Bureau of Economic Research, a principal of the Brattle Group Inc., and a retired director of Entergy Corporation. His research is primarily concerned with the valuation of real and financial assets, corporate financial policy, and financial aspects of government regulation of business. He is the author of influential research papers on many topics, including adjusted present value, rate of return regulation, pricing and capital allocation in insurance, real options, and moral hazard and information issues in capital structure decisions.

Franklin Allen

Franklin Allen - Professor of Finance and Economics, Imperial College London, and Emeritus Nippon Life Professor of Finance at the Wharton School of the University of Pennsylvania. He is past president of the American Finance Association, Western Finance Association, Society for Financial Studies, Financial Intermediation Research Society, and Financial Management Association. His research has focused on financial innovation, asset price bubbles, comparing financial systems, and financial crises. He is Director of the Brevan Howard Centre for Financial Analysis at Imperial College Business School.

Alex Edmans

Alex Edmans is Professor of Finance at London Business School. Alex has a PhD from MIT as a Fulbright Scholar, and was previously a tenured professor at Wharton and an investment banker at Morgan Stanley. Alex has spoken at the World Economic Forum in Davos, testified in the UK Parliament, and given the TED talk What to Trust in a Post-Truth World and the TEDx talks The Pie-Growing Mindset and The Social Responsibility of Business with a combined 3 million views. He serves as non-executive director of the Investor Forum and on Morgan Stanley’s Institute for Sustainable Investing Advisory Board, Novo Nordisk’s Sustainability Advisory Council, and Royal London Asset Management’s Responsible Investment Advisory Committee. He is a Fellow of the British Academy and a Fellow of the Academy of Social Sciences.

Alex’s book, Grow the Pie: How Great Companies Deliver Both Purpose and Profit, was a Financial Times Book of the Year and has been translated into nine languages. His latest book, May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases – And What We Can Do About It was published by Penguin Random House in 2024. He has won 28 teaching awards and was named Professor of the Year by Poets & Quants in 2021.

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