Preface

Corporate finance is often described as the “language of business,” and rightly so. At its core, it is about how organizations make decisions to raise funds, invest wisely, and create value for shareholders and society at large. This study text has been developed to provide students—particularly undergraduates—with a comprehensive and practical foundation in corporate finance. It is designed not only to prepare them for examinations but also to equip them with real-world financial skills they can apply in their future careers as managers, entrepreneurs, consultants, policymakers, or investors.

The text is written with clarity in mind, avoiding unnecessary jargon while still capturing the rigor and discipline of finance. Each chapter builds progressively, starting from the fundamental concepts such as the time value of money, risk and return, and bond valuation, to more advanced areas such as capital budgeting, cost of capital, and financial statement analysis. Practical examples, often drawn from Zambian and regional contexts, are integrated to make the material relatable. For instance, students will see how government bonds (such as those issued by the Bank of Zambia) work in practice, and how companies in Zambia and beyond raise funds through corporate bonds and equities.

One of the unique features of this book is its dual focus: global relevance and local applicability. While the principles of corporate finance are universal, their application varies depending on economic, regulatory, and institutional environments. Students in Zambia, for example, will benefit from illustrations on how firms access capital markets in Lusaka, while also understanding how multinational corporations operate in New York, London, or Shanghai. This global-local balance ensures that readers are not only exam-ready but also work-ready in both domestic and international financial environments.

This book is also guided by a pedagogical philosophy: finance is best learned not by rote memorization, but by application and critical thinking. Each chapter contains practice problems, exam-style questions, and worked-out solutions to reinforce learning. In addition, emphasis is placed on decision-making: what should a manager do when faced with a choice of projects? How should a firm balance risk and return? When should a company issue debt rather than equity? By engaging with these questions, students are encouraged to think like financial managers.

Finally, this text is intended as a living resource. Corporate finance evolves with changes in technology, regulation, and global markets. While the principles remain stable, new tools such as fintech innovations, ESG (environmental, social, and governance) considerations, and data-driven decision-making are reshaping the financial landscape. Students using this book are therefore encouraged not only to master the principles but also to remain curious and adaptable as they encounter new challenges in their professional lives.

It is my hope that this book will inspire confidence, competence, and curiosity in every student who engages with it. Whether you are in a lecture hall in Lusaka, a library in London, or studying online from any corner of the world, this book is for you.

I dedicate this work to the students of the University of Zambia and all learners worldwide who aspire to shape the future of finance with knowledge, integrity, and innovation.