Chapter Outline. The Capital Structure Question. The Effect of Financial Leverage. Capital Structure and the Cost of Equity Capital. M&M Propositions I and II with Corporate Taxes. Bankruptcy Costs. Optimal Capital Structure. The Pie Again. Observed Capital Structures. A Quick Look at the Bankruptcy Process

Berk and DeMarzo introduce recent advances in finance research throughout the book. For example, Chapter 16 is a full-chapter treatment of the effects of financial distress, agency issues, and asymmetric information on the firm's choice of capital structure. Modern Practice. Throughout Corporate Finance the authors connect finance concepts to ...