01 / Reading Guide
Reading Guide
Corporate finance: rank projects by value, not by a percentage alone
Compare a free valuation spine and two contrasting finance texts, then solve original cash-flow rankings and a changed discount-rate decision.
Study route and exercise: University Reading List editorial project.
Who this book is for
For MBA and other graduate readers seeking a free route through corporate finance. It can also support well-prepared undergraduates. The numerical framework makes it useful after an introductory finance course, especially for readers who need to justify assumptions behind valuation rather than memorize a single formula.
Prerequisites
Be comfortable with algebra, percentages and basic probability. Familiarity with financial statements helps; calculate discounted cash flows by hand before relying on a spreadsheet.
What it covers
Present value and capital budgeting lead into risk, required returns, market efficiency, cash-flow estimation and financing choices. The main text also develops payout and pro forma statements. Some additional topics sit in a separate companion; do not assume those files have the same organization or revision history.
How to use it
Draw a dated cash-flow timeline before calculating value. Work a small numerical example, then change a discount rate or financing assumption and explain the result. Distinguish an accounting figure from an economic cash flow. Use the chapter questions to check reasoning and consult corrections before comparing an answer with an older copy.
Edition and sources
The author site identifies the fifth edition, 2022, and links free chapter PDFs on its reading page. Free access is subject to the site’s conditions; the fourth edition’s separate open-source statement is not applied to this fifth edition.
Focused reading and edition boundary
The trial below uses this site's original companion problem; open its supplied assumptions and data before answering.
Reading route: Fifth edition, 2022: present value, capital-budgeting rules and pitfalls, then economic cash flows by title.
Try before continuing: Put A and B on separate three-date timelines and calculate their difference B−A. Checkpoint: The difference is an incremental project comparison; do not average IRRs or add mutually exclusive project values.
Edition and access: The author provides free reading under stated conditions. The fourth edition’s open-source arrangement must not be transferred to the copyrighted fifth edition.
