What is the best introductory book to corporate finance you know of, for self study purposes?
Here are the standard texts based on my own experience working as an M&A banker: Corporate finance: Brealey Meyer’s Principles of Corporate Finance Financial Accounting: Kieso Weygandt’s Intermediate Accounting The two books above are the two textbooks I kept from college and were the two books handed to every new investment banking analyst during the first day of training at the two bulge-bracket banks I’ve worked for. If you only get one book, I’d get the Kieso Weygandt book. Other standard texts: Fixed Income: Fabozzi’s Handbook of Fixed Income Securities – if you ever plan to work in fixed income, this is your bible. Even if you don’t, it’s very useful to own. Derivatives:
Higgins is the stock CorpFin book at most MBA programs nowadays, but it is almost purely Corporate Finance, and it touches on only some of the themes you mentioned. Bodie, Kane and Marcus’ Investments is a really thick book whose older editions can be had pretty cheaply. While most of the things you list in your question deal with finance from a company perspective, BKM deals with those topics from a market perspective, and is IMO all-encompassing. When I forget the differences between Modified and Macaulay duration, for instance, it’s the first place I turn. Fabozzi is more thorough (and deserving of its “bible” status) as mullacc notes, but far narrower. As far as programming goes, you can solve 99% of financial problems with a Monte Carlo program and Excel (especially if you can use VBA). Best intro book on how to use Excel is by Benninga, who happens to be a fine gentleman. As far as hardcore Fin Math goes, I’d poke
Thank you very much for your advice so far. I had attended a couple of classes on corporate finance 15 years ago and I find that I get excited about time value of money. And I would like to explore working on that excitement. My goal is to learn enough to make my own investment decisions in many kinds of instruments. Or at least can hold a conversation with investment analysts when they work on my money one day 🙂 Yah , one day, if I live long enough 🙂 I already have a background in financial accounting and some knowledge of management accounting. I have no plan to go back to school yet. I will do that only after I have the foundations of financial mathematics under my belt. But I am keen to learn to learn online and with great introductory books. The challenge with most corporate finance textbooks is they assume we are all mathematics wizards and given a problem and a solution can derive the step by step process on our own. Thanks a million.
