Corporate Finance Truck Wars

This second edition maintains the approach of building up explanations from the simplest to ever-more complex scenarios. Numerical examples take center stage, and each step is easy. Students learn why the fundamentals make sense, as this book teaches not only the traditional finance canon, but also how to think in financial terms. It is both more advanced and easier to understand than its competitors.

The book is self-contained, helping students with incomplete foundations in accounting, economics, and statistics. Its focus is valuation, containing novel chapters on reading financial statements from a finance perspective, using comparables, and constructing pro formas. It consistently emphasizes the difference between the default (credit) premium and the risk (aversion) premium, and it is honest about what financiers do and do not know.

The book features many small innovations, such as an NPV checklist to prevent common errors and a demystification of the relation between tax-adjusted APV, WACC, and other perfect-market violations. The capital structure chapters explain how non-financial liabilities can finance the firm (and break M&M), how firms should act if financial markets are not efficient, and how stock returns greatly influence debt-ratio variation.

Chapters not normally covered in a first course are laid out in a (free) companion, making this book more like a "Fundamentals" version. For example, rates of return, present values, and the law of one price are first explained in a world of certainty, then in a world with risk but no risk premium, followed by a world in which higher risk comes with higher expected returns, and finally in a world with imperfect markets.

In summary, this book offers a comprehensive and innovative approach to finance education, providing students with a solid understanding of the fundamentals and the ability to think in financial terms. Its unique features and self-contained nature make it a valuable resource for students with diverse backgrounds and a wide range of finance-related interests.

product information: