book cover for corporate finance: an introduction

Ivo Welch, January 2013

Corporate Finance: 2nd Edition

(The third version is now complete.) Please switch to the third edition. (We are down to a few hundred copies of the 2nd edition in print. Thereafter, it will only be available online for free and possibly as an on-demand print, which is much lower quality.)

The first edition of my introductory corporate finance textbook was titled Corporate Finance: An Introduction and was sold for >$220/book (like other mainstream corporate finance introductory text books) by Prentice-Hall.

This second edition of my introductory corporate finance textbook is much improved.

You can buy the book at cost—for $59 in "used, very good condition." These books may be either new (most of the time) or used (rarely). Importantly, small defects (like creases or folds or dog ears, and even insufficient glue on the cover that a buyer can easily correct) do not qualify as defects that warrant returns. Inside the cover, the book text should be pristine—perfect.

Ordering a few books together seems to be considerably cheaper on shipping costs than buying one book at a time. (You can see the costs of shipping different quantities on the order page.) I do not make any money on shipping. Our order page is just passing through the cost quoted by the shipping service. One final warning: shipwire tends to hold orders that do not have valid USPS addresses. So, shipping to the "Comfy Dorm on Campus" will not work. Make sure to enter a correct street address and zip code.

The book is also for sale by me at Amazon at $120. Don't buy it there—it is the same book, just more expensive. Why? Because Amazon charges for its services, and because I have to deal with each placed order by hand. I only put the book up for sale at Amazon, too, because other sellers at Amazon were asking $250 or more, and they were finding buyers who were not savy enough to google (or willing to read) to find this page here. If you purchased the book there, I am sorry: I cannot give refunds at Amazon for buyers who find out about the lower price here later. It is a hassle to deal with the Amazon process (due to our lack of computer integration), and even more of a hassle to refund with them and deal with return control. I am not a book vendor—I am a professor of finance. I want it to stay this way.

The book is also free online on the web. This is very convenient when you do not have a physical copy of the book with you. (why no kindle and why no pdf?)

Although I do not make money on the book overall, if you do purchase a hard copy, you help me cover the fixed costs of the print run, web site, purchasing system, and instructor copies (and it will help cover the direct cost of updates to the book). Moreover, you will not only help the author (me) by purchasing a copy, but you will also help yourself. After all, it is easier to study and mark up a hard copy and it protects you in case this web server goes down (what do you do if this happens before your exam?). I have deliberately priced the book at less than a quarter of the cost of standard textbooks. At this price, the book should be affordable for you, it will be a lifelong reference, you can still use the free online version, and you are actively supporting a move away from $200+ textbooks.

This book will always be free to read here, but it will never be public domain. The text is copyrighted. You can read the book online, and you can (and should) link to these pages. however, you cannot change or redistribute the book. You can especially not post the book on your own website. There are no iPad or kindle versions—their software cannot deal with math. There are no .pdf versions.

You can support this book in the following ways:

Think of this book is an experiment. How much difference does it make to instructors and students if a textbook is cheap? Do you want this model to succeed? If so, support it.

Printed Version

The book is a high-quality softcover (in color), 736 pages, priced at $60/book. The ISBN-10 is 09840049-5-5 (ISBN-13: 0984004955). The book is also available in more-used form for half this price ($35). We moderately increased the $60 price to encourage more $35 purchases. In January, edition 3 will return to $60 a book.

Online free, online in print from my website via shipwire and amazon are the only two distribution options. please do not ask whether your book store can sell the book. My life is too short to deal with university book stores. I am not prentice-hall or mcgraw-hill. Because amazon orders may take 3-5 days to arrive, the first three chapters of the book (ch1, ch2, ch3) are also freely downloadable and printable in pdf format. They also incorporate minor changes that are destined for the 3rd edition, especially a better "how banks quote interest rates" section.) However, like the book itself, free chapters means free of charge, not freely redistributable. Of course, although reading the text and these chapters is free on this website, the material is copyrighted, not permitted to be distributed further, and not permitted to be posted elsewhere, except with the explicit permission of the author. Exception: Universities and university instructors are allowed to post these first three chapters on their official instructor or class pages, provided there is obvious attribution and a link to Warning: it has happened in the past that other sites illegally copied this pdf file (and many others), added malware, and posted it for unwary readers. You should never download pdf files from untrusted sources. It is dangerous.

Class Teaching Notes

Basic student and instructor class teaching notes are in cn/. They are the basis of my own finance course, ucla anderson's finance 430 course.

Instructors [and only instructors] can request access to the source for these slides [in beamer or ms-word], as well as other instructor support materials described below. I will check identity to prevent students from masquerading as instructors. The notes are for instructors, not students.

Student Test Bank (and Instructor Homework System)

equizavatar is our quiz software, with algorithmic (ever-changing) questions. Instructors can easily add their own questions and collect student responses.

Companion (early preview). Additional Investments Chapters, and more

The main text is almost a "fundamentals" book. However, all omitted information is available for free. The 300-plus pages companion contains chapter appendices from the main text; plus standalone chapters on: capital structure dynamics, capital structure patterns in the us, financial services firms, m&a, corporate governance, international finance, and options and risk management.

The pdf file is companion.pdf. The options and derivatives chapter 27 (with some corrections) is at chap27-options.pdf. It is not legal to repost it elsewhere. this companion book will always be free online, just like the main text. Instructors have my permission to send chapters to a copy shop without having to pay any royalty.

I also have written some investments chapters, which are free at bookg.pdf these replace the two more intuitive investments chapters 9 and 10 in the main text book. The investments chapters are less polished and edited than the in-book chapters, but they are still pretty darn good.

background information The Web

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