Lessons in Corporate Finance

Praise for Lessons in Corporate Finance "Lessons in Corporate Finance presents the technical concepts in a very thoughtful manner that, combined with the case illustrations, provide a real window into the world in which CFOs operate every day." -Daniel J. Brennan, Executive Vice President and Chief Financial Officer, Boston Scientific "Asquith and Weiss provide a highly readable, clear, and practical treatment of corporate finance. This book will help any manager make better investment and financing decisions." -Steven Neil Kaplan, Neubauer Family Distinguished Service Professor of Entrepreneurship and Finance, The University of Chicago Booth School of Business "Lessons in Corporate Finance, by Asquith and Weiss, provides an intuitive, step-by-step introduction to both the tools and theory of finance. The clarity of the presentation is not surprising given the fact that it is by two academics who changed the theory and practice of corporate finance in the 1980s and 1990s. While clearly useful as a textbook, it is even more suited to finance practitioners who may not be familiar with all the underpinnings of finance theory." -Matthew E. Zames, President, Cerberus Capital Management, Former COO, JP Morgan Chase & Co. What is New in the Second Edition? The second edition of this book differs from the first in two significant ways. First, there is new material throughout, including a new chapter on bankruptcy and restructuring. The new chapter covers the institutional rules (i.e., laws) and economics around firms that enter into financial distress and must restructure or file for bankruptcy. It also covers the two principal sections of U.S. bankruptcy law. The second, and more significant, change is in response to the 2018 Tax Cuts and Jobs Act, passed in the United States in December 2017. This law took effect in January 2018 and represents a major change in the U.S. corporate tax code. Not only did it lower the maximum U.S. corporate tax rate from 35% to 21%, it also substantially altered the corporate tax shield from debt. The law reduces the advantages of debt financing and raises the cost of capital to many firms. This means the methodology used to value a large percentage of firms must also change substantially. These changes, and how to treat them, are covered throughout the book. The deliberate question-and-answer format develops your intuitive understanding of the fundamental principles and tools of corporate finance.