Overview of Financial Management 3/e Book

This Global Edition has been edited to include enhancements making it more relevant to students outside the United States. 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. 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 is also available by Jonathan Berk and Peter DeMarz. Features: 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, Arbitrage and Financial Decision Making, 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, valuation). Teaching Students to Think Finance. In each chapter, an innovative set of learning aids teaches every student how to 'think finance. ' Problem-solving study aids include: Common Mistakes boxes point to frequently made errors stemming from misunderstood core concepts and calculations, as well as mistakes made in practice. Worked Examples accompany every important concept using a procedure that illustrates both the Problem and the step-by-step Solution. With a simplified presentation of mathematics, this text breaks the sink-or-swim trend found in most texts by systematically using Notation Boxes as well as Numbered and Labeled Equations. Timelines are introduced in Chapter 4, The Time Value of Money, and consistently used throughout the book when appropriate. Stressing the importance of creating timelines for every problem that involves cash flows, each worked example involving a cash flow includes a timeline as the critical first step. Modern Research. Berk and DeMarzo introduce recent advances in finance research throughout the book. For example, Chapter 16, Financial Distress, Managerial Incentives and Information, 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, Capital Budgeting with Leverage, 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, Valuation and Financial Modeling: A Case Study, illustrates the application and real-world implementation of valuation techniques. New to this edition: New Global Financial Crisis boxes highlight the ongoing sovereign debt crisis and financial crisis of 2007-2009, with analysis focused on the core concepts that underlie financial decision making. Seven new practitioner interviews support the book s practical perspective and incorporate timely viewpoints related to recent financial turmoil in the United States and abroad. Reorganized