Coverage Comparisons

This document is my quick-take on how the corporate finance books are similar and different.

Introductory corporate finance books overlap about 80%. None of the authors have special knowledge. They differ primarily in how they focus the learning experience. Brealey, Ross, and Berk are more similar to one another. Welch is somewhat different. It is less of an 'executive' take and more of a 'tutorial' take on corporate finance. It has more emphasis on the distinction between expected and promised returns, on the role of perfect markets, on benchmark-based (rather than just CAPM-based) pricing, and on pro-forma construction. It has less emphasis on options, leasing, and short-term/working-capital management. Some chapters are separate from the main book (e.g., governance, options, etc.) These are IMHO chapters that tend not to be covered by a first corporate finance course, but specialized follow-on courses, where dedicated textbooks can do a better job.

# Title Brealey Ross Berk Welch
1 Introduction 1 1 1,2,3 1
2 Present Value 2 4 4 2
3 Stocks and Bond Values (Perpet) 4 9 4,9 3
4 Capital Budgeting Main Rules 5,6 5,6 7,8 4
5 Time-Varying Rates of Return and Yield Curve 3 8 5,6 5
6 Uncertainty, Default, Risk 23 - - 6
7 Historical Investment Patterns 7 10 10 7
8 Risk and Reward 8 11 11 8
9 Benchmark Pricing - - - 9
10 CAPM 8,9 11,13 11,12 10
11 Imperfections - - - 11
12 Perfect, Efficient, Classical, Behavioral 13 14 13 12
13 Capital Budgeting 10,11,12,22,28,29 6,7 22 13
14 Financial Statements 28,29 2,3 2,19 14
15 Comparables and Ratios 28 ? 19 15
16 Claims 14,15,24 15,20 23,24 16
17 Capital Structure (Perfect) 17 16 14 17
18 Capital Structure Taxes 18,19 18 15,18 18
19 Capital Structure (Imperfect) 18 17 16 19
20 Dividends and Repurchases 16 19 17 20
21 Pro Forma - - - 21
22 Options 20,21 22,23,24,25 20,21 A
23 International - 31 31 B
24 Governance 33 - 29 C
25 Ethics - - - D
26 Leasing 25 21 25 -
27 Risk Management 26,27 ? 30 -
28 Working Capital Management 30 26,27,28 26,27 -
29 Mergers 31,32 29 28 E
30 APT - 12 - -
31 Distress - 30 - -

Brealey = ed 12. Ross = ed 11. Berk = ed 4. Welch = ed 4.

Suggestions for changes to the coverage comparison are welcome. My understanding is based only on a cursory paging-through of the four books.


/bookcomparison.html Last modified: 2016-06-01 11:04:42 -0700