MANAGEMENT 13 ED BRIGHAM
CHAPTER 1 QUESTIONS AND
ANSWERS
FinancialloManagementlo(CorporateloFinance)lo-loanswer--
Focusesloonlodecisionslorelatinglotolohowlomuchloandlowhatlotypesloofloassetslotoloacquire,lo
howlotoloraiselothelocapitalloneededlotolopurchaseloassets,loandlohowlotolorunlothelofirmlosoloa
slotolomaximizeloitslovalue.
Capitallomarketslo-loanswer--
Relatelotolothelomarketslowherelointerestlorates,loalonglowithlostockloandlobondloprices,loarelo
determined.
Securityloanalysislo-loanswer--
Dealslowithlofindinglotheloproperlovaluesloofloindividuallosecurities
Portfoliolotheorylo-loanswer--
Dealslowithlothelobestlowaylotolostructureloportfolioslooflostocksloandlobonds
Marketloanalysislo-loanswer--
Dealslowithlotheloissuelooflowhetherlostockloandlobondlomarketsloatloanylogivenlotimeloarelo"to
olohigh,lotoololow,loaboutloright"
Proprietorshiplo-loanswer--
Anlounincorporatedlobusinessloownedlobylooneloperson.loADV:lo1.loTheyloareloeasilyloandloi
nexpensivelyloformed.lo2.loTheyloarelosubjectlotolofewerlogovernmentloregulations.lo3.loThe
yloarelosubjectlotololowerloincomelotaxeslothanloarelocorporations.loDISADV:lo1.loHavelounli
mitedlopersonalloliabilityloforlothelobusinesseslodebts.lo2.loThelolifelooflothelobusinessloislolimit
edlotolothelolifelooflotheloindividuallowholocreatedloit.lo3.loTheylohavelodifficultlyloobtaininglolarg
elosumslooflocapital.
Partnershipslo-loanswer--
Alolegalloarrangementlobetweenlotwoloorlomorelopeoplelowholodecidelotolodolobusinesslotog
ether.loPartnersloarelosubjectlotolounlimitedlopersonalloliability.
Corporationlo-loanswer--
Legalloentitylocreatedlobyloalostate,loandloitloisloseparateloandlodistinctlofromloitsloownersloand
lomangers.loThelocorporationlocanloloseloallloofloitslomoney,lobutloit'sloownerlocanloloseloonlylot
helofundslothatlotheyloinvestedloinlothelocompany.loCorporationslohavelounlimitedlolivesloand
loitloisloeasierlotolotransferloshareslooflostock.loMostlocorporationloearningsloarelosubjectlotolod
oublelotaxation.loEarningsloarelotaxedloandlothelodividendsloarelotaxedloaslopersonalloincom
elotolotheloshareholderslo.