Ivo Welch, Corporate Finance: 4th Edition, 2017

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This fourth edition has not yet been released. It is experimental. Having said this, it should already be very solid and up-to-date.

The book will also be available in print for <$50/copy when it is out. For now, please do not print it yet. It is still in flux.

If you want a printed preview copy, as of December 2016 (expected completion [which simply means no more changes] is March 2017), you can get a copy for $29 from lulu—which is cheaper than you can print it for yourself. I take no responsibility for the outcome: this printing is Lulu's business. However, if your experience is bad, please let me know. I can switch printer.

There is no version of this that does not have the "draft" background on it. This is deliberate. This is not the final version. The printed version above for $29 removes it, but this is because it has a limited lifetime and will not forever wander around the web. I don't want to have to field questions about drafts in the future.

  1. Introduction
  2. Part I: Value and Capital Budgeting
  3. Present Value
  4. Stock and Bond Valuation: Annuities and Perpetuities
  5. A First Encounter with Capital Budgeting Rules
  6. Part II: Risk and Return
  7. Time-Varying Rates of Return and the Yield Curve
  8. Uncertainty, Default, and Risk
  9. A First Look at Investments
  10. Investor Choice: Risk and Reward
  11. Benchmarked Costs of Capital
  12. The Capital Asset Pricing Model
  13. Part III: Market Efficiency
  14. Market Imperfections
  15. Perfect and Efficient Markets, and Classical and Behavioral Finance
  16. Capital Budgeting Applications and Pitfalls
  17. Part IV: Real-World Applications
  18. From Financial Statements to Economic Cash Flows
  19. Valuation from Comparables and Financial Ratios
  20. Part V: Capital Structure and Payout Patterns
  21. Corporate Claims
  22. Capital Structure in a Perfect Market
  23. Taxes and Capital Structure
  24. More Imperfect-Market Capital Structure
  25. Equity Payouts: Dividends and Share Repurchases
  26. Part VI: Projecting the Future
  27. Pro Forma Financial Statements and the PepsiCo Case

For instructor flexibility sake, important chapters like options and derivatives, international finance, corporate governance, etc., will be available in the same pdf format, but not in the printed version. The companion is not yet updated to v4, much less edited or organized. It has appendixes for chapters 3,5,8,9,12,13,17,18,21; and chapters on [22] capital structure changes; [23] empirical capital structure patterns; [24] investment banks and M&A; [25] corporate governance; and [26] international finance; and [27] Options and Risk Management.


Ivo Welch, UCLA, 2016-.


/ed4/ Last modified: 2016-06-01 11:04:42 -0700