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Ivo Welch, Corporate Finance: 5th Edition, 2022

If you prefer a printed paperback version (of 740 pages), you can buy one from Amazon for $59. (Here is my experience when ordering a printed copy of the book.)

  1. Introduction — (Video-Cast Test)
    (The video-cast test is a reading of the chapter by an actor with the text behind it. The audio also works by itself like a podcast. If it works well, we may do this for every chapter, courtesy of
  2. Part I: Value and Capital Budgeting Part I
  3. Present Value
  4. Stock and Bond Valuation: Annuities and Perpetuities
  5. A First Encounter with Capital Budgeting Rules
  6. Time-Varying Rates of Return and the Yield Curve
  7. Uncertainty, Default, and Risk
  8. Part II: Risk and Return
  9. A First Look at Investments
  10. Investor Choice: Risk and Reward
  11. Benchmarked Costs of Capital
  12. The Capital Asset Pricing Model (CAPM) with a humorous take
  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 with a humorous take
  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 with a humorous take


The book should have very few errata so that we can list them here. I will fix discovered erratas about monthly (unless they are serious, in which case I will try to do so asap).

  1. None Yet

Other Editions and Companion Material

I will probably not be able to update the below before the turn of the year.


I have various other chapters (e.g., on empirical capital structure in the U.S., governance, international finance, and options), but they are not yet well formatted. Use at your own risk: companion 2020.


An old writeup. Still the right way to teach the wrong model (the CAPM). Never fully developed. Maybe inspirational to some...

Your Own E-Quizzes

If you have a set of quizzes with multiple choice or numerical answers that you designed yourself and that you would like to be coded into an online platform and that you would be happy to share with other instructors, we will code them for you into

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 updated, much less edited or organized. It has appendixes for a number of 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.

Please leave a non-anonymous review . (You will have to authenticate with a google account.)

Ivo Welch, UCLA, 2022-.

Fourth Edition, 2017 . (Please don't use this any longer!)
MFE Edition, 2017 for Masters of Finance or Masters of Data Sciences Programs, with extra programming and data resources, 2017.

(There is visual and audio multi-media content, with This will include some humourous videos, like the ones linked below, as well as a podcast version of some chapter [to see if there is interest]. The Book Cover for the 5th edition.)

You can also leave a non-anonymous review. (You will have to authenticate with a google account.)

The pdf version that you can download below has a gray watermark image (that the printed version on Amazon does not). This is deliberate and will not change. It is a (very small) incentive in favor of the printed version.

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