Principles of Corporate Finance, 14th Edition | Richard Brealey & Stewart Myers | Complete Solution Manual (Chapters 1–34)

SOLUTION MANUAL FOR

Principles Of Corporate Finance
14th Edition By Richard Brealey, Stewart Myers,
ALL Chapters (1 - 34)

, TABLE OF CONTENTS QJ QJ




Chapter 1: Introduction to Corporate Finance
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Chapter 2: How to Calculate Present Values
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Chapter 3: Valuing Bonds
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Chapter 4: Valuing Stocks
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Chapter 5: Net Present Value and Other Investment Criteria
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Chapter 6: Making Investment Decisions with the Net Present Value Rule
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Chapter 7: Introduction to Risk, Diversification, and Portfolio Selection
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Chapter 8: The Capital Asset Pricing Model
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Chapter 9: Risk and the Cost of Capital
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Chapter 10: Project Analysis
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Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
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Chapter 12: Efficient Markets and Behavioral Finance
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Chapter 13: An Overview of Corporate Financing
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Chapter 14: How Corporations Issue Securities
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Chapter 15: Payout Policy
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Chapter 16: Does Debt Policy Matter?
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Chapter 17: How Much Should a Corporation Borrow?
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Chapter 18: Financing and Valuation
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Chapter 19: Agency Problems and Corporate Governance
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Chapter 20: Stakeholder Capitalism and Responsible Business
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Chapter 21: Understanding Options
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Chapter 22: Valuing Options
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Chapter 23: Real Options
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Chapter 24: Credit Risk and the Value of Corporate Debt
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Chapter 25: The Many Different Kinds of Debt
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Chapter 26: Leasing
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Chapter 27: Managing Risk
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Chapter 28: International Financial Management
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Chapter 29: Financial Analysis
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Chapter 30: Financial Planning
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Chapter 31: Working Capital Management
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Chapter 32: Mergers
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Chapter 33: Corporate Restructuring
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,Chapter 34: Conclusion: What We Do and Do Not Know about Finance
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CHAPTER 1 qj




Introduction to Corporate Finance qj qj qj




The values shown in the solutions may be rounded for display purposes. However, the answers werederived usin
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g a spreadsheet without any intermediate rounding.
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Answers to Problem Sets qj qj qj




1. a. real

b. executive airplanes qj




c. brand names qj




d. financial

e. bonds

*f. investment or capital expenditure qj qj qj




*g. capital budgeting or investment qj qj qj




h. financing

*Note that f and g are interchangeable in the question.
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2. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all real assets. Real as
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sets are identifiable as items with intrinsic value. The others in the list are financial assets,that is, these a
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ssets derive value because of a contractual claim.
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3. a.
Financial assets, such as stocks or bank loans, are claims held by investors. Corporati qj qj qj qj qj qj qj qj qj qj qj qj qj




ons sell financial assets to raise the cash to invest in real assets such as plantand equipment.
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Some real assets are intangible. qj qj qj qj




b. Capital expenditure means investment in real assets. Financing means raising the cashfor th
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is investment. qj

, c. The shares of public corporations are traded on stock exchanges and can be purchasedby a w
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ide range of investors. The shares of closely held corporations are not publicly traded and are
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held by a small group of private investors.
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d. Unlimited liability: Investors are responsible for all the firm‘s debts. A sole proprietor hasunlim
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ited liability. Investors in corporations have limited liability. They can lose their investment, bu
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t no more.
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Est time: 01-05
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