Corporate Finance

by Jonathan Berk & Peter DeMarzo

Corporate Finance by Jonathan Berk and Peter DeMarzo (both professors at Stanford’s Graduate School of Business) is an excellent corporate finance textbook, which explains everything you need to know clearly and well. If you’ve thought about business and have some basic maths, you should have no problem following it. Corporate finance is about the capital structure and financing side of a business: how to raise money and what instruments to use. Clearly, you need to adapt your financing to what kind of business it is. For example, if you work for a risky startup with no cashflow, issuing a lot of debt is not a good idea. Corporate finance is also about valuation, and whether a project or deal will add or subtract from shareholder value. Risk management (e.g. of changes in interest or exchange rates) is also essential and one of the many topics covered in this very nicely done book.