Corporate Finance: 2nd Edition

For Students

Note that even if my book is not your primary assigned textbook, you may still find it easier to understand finance from my textbook than you will from reading your standard textbook. Often, there is also use to reading about the material from different books and perspectives. Get a step on your competition. Understand finance.

Of course, if your instructor is using a different book, you should point out to him or her that this book is free online and affordable in print. And, of course, if you have read parts of this book and parts of your current textbook, you should also tell your instructor which one you found to be better for learning finance.

The overconfidence quiz, mentioned in the book.

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For Instructors

Instructors are welcome to request and use any book-related material (e.g., full slides, answers to questions on slides, on-line test access, syllabi, instructor's manual, etc.), even if they do not adopt the book.

• Student pricing: All students enjoy free online access to the book at all times (see above). Non-US Instructors can either ask students to buy copies or buy one copy of the US book themselves for $60, and receive permission for their local copy shops to make free copies for all students. This can be for individual chapters or for the entire book. You can't get cheaper than this. (US instructors: please have students purchase the Amazon book. It spreads the fixed cost and pays for desk copies.)
• Powerpoint slides are available for free at http://book.ivo-welch.info/cn. There are no copyright restrictions, so you can do with these slides whatever you want.
• The password-protected secret instructor material (sample syllabus, answers to questions in powerpoint slides, timing of course information, etc.) can be downloaded. contact me
• The password-protected solutions manual for all the questions at each chapter end can be downloaded. contact me
• If you want to get a desk copy of the book for examination purposes, I need your address and phone number (for shipping). Please note that I am not a publisher and I don't make money off the book, so no frivolous requests, please. Also, please take at least a quick glance at the online version to make sure that the coverage and basic tone suits you.) contact me
• There is an on-line (algorithmic) homework system that is easy to use for both instructor and students (Equiz.Me: Almost ready.) Almost no learning curve, and allows instructors to change or add questions. It's positively brillant. Please contact Ivo Welch if you want access to it.

  Although we have a lot of the end-of-chapter questions from the book plus new questions in the testbank, I am still looking for instructors to write and debug more questions. If you want to do this, please email me Ivo Welch. If you are willing to write such questions AND test them on your class (so that we find bugs), this will be fairly compensated, too.

• The Challenge: If you are going to use this textbook as your primary course textbook in an introductory corporate finance course, and you then change your mind and want to go back to a more traditional textbook because you believe the latter is better (and not because of other reasons, such as a committee that now requires it, or because the course is no longer offered), I will contribute to your additional prep cost efforts, up to $1,000. Basic Conditions: You must let me know of your course start that you have assigned my textbook as your primary textbook, and point me to your syllabus. You must let me know your decision at the time you teach the course again. For every student who has enrolled in your course and purchased the book on lulu (where I have a record of who bought the book), I will send you $10, up to a limit of $1,000. I must agree at the time of the assignment—I will limit this offer to half my annual income for obvious exposure reasons.

To get access to the protected instructor materials materials, please contact me directly. Please do so from your official university email address, and show me the link to your web page, so that I can verify that you are an instructor. Yes, students have tried to masquerade as instructors in the past. Please write that you guarantee that you will not share the materials with students or colleagues. This is to keep the files from being decrypted and appearing posted in the wild. Keeping instructor files confidential is in our mutual interest.

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Problems, Errata, Future Plans, Experimental Chapters

Please read the FAQ.

Corrections for the final Edition 2 Version.

• Table of Contents, page xiv: the header line for Chapter 5 was not printed at the top of the page. [thanks, Effi B.]
• p90, in-text table: the header "rate in year" is misleading. it should have said "annualized rate." The algebraic abbreviation below it is correct. [thanks, John Stocker.]
• p178, 182, 187, 189: the figures switch diamond and hearts relative to the text. [thanks, Jonathan Vaughan.]
• p436, exhibit 14.4: the line in the left figure is incorrect. (this should be visually obvious.) As a result, the one-sentence discussion below the figure is wrong, too. firms with higher expected earnings did not have higher prices.
• p636, answer to question 19.4 is poorly written. A better answer would have been "A firm undertaking an open-market repurchase program could be accused of manipulating its stock price only if it failed to follow the exact SEC safe-harbor guidelines in Rule10b-18." [thanks, Arturo Grisi]
• p607, answer to Q18.16, 2.b., is hosed. (A formatting problem on my end uncovered the wrong items.) The final table should be

  (a) Firm	$150	$40	$170	$60	$105
  (b) Bond	$90	$40	$90	$60	$70
  (c) If Conv (75%)	$112.5	$30	$127.5	$45	$78.8
  (d) If Opt Conv	$112.5	$40	$127.5	$60	$85
  (e) Equity	$37.5	$0	$42.5	$0	$20

  and the equity will decide that it has nothing to gain by taking the bad project. [thanks, Leo Reilly].

If you are having trouble reading the book online, please return here and fill out the user experience form.

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