Author Description

"The teaching and the practice of corporate finance are more challenging and exciting than ever before. Among other things, the first two decades of the twenty-first century brought us the global financial crisis of 2008-2009 and the COVID-19 pandemic of 2020-2021. Both shocks led to major corporate restructurings, and we still routinely see announcements in the financial press about takeovers, junk bonds, financial restructuring, initial public offerings, bankruptcies, and derivatives. In addition, there are new recognitions of "real" options, private equity and venture capital, subprime mortgages, bailouts, and credit spreads. As we have learned, the world's financial markets are more integrated than ever before. Both the theory and practice of corporate finance have been moving ahead with uncommon speed, and our teaching must keep pace. These developments have placed new burdens on the teaching of corporate finance. On the one hand, the changing world of finance makes it more difficult to keep materials up to date. On the other hand, the teacher must distinguish the permanent from the temporary and avoid the temptation to follow fads. Our solution to this problem is to emphasize the modern fundamentals of the theory of finance and make the theory come to life with contemporary examples. Increasingly, many of these examples are outside the United States"--