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Exam (elaborations)

Solution manual for Principles Of Corporate Finance 14th Edition by Richard Brealey, Stewart Myers, ALL Chapters (1 - 34)

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Access the complete solution manual for Principles of Corporate Finance 14th Edition by Brealey, Myers, and Allen. Includes step-by-step answers to problem sets, chapter summaries, and financial calculations. Perfect for students and instructors seeking verified corporate finance solutions.

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Uploaded on
September 9, 2025
Number of pages
491
Written in
2025/2026
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YYY YYY Y Y




f corporate finance 14th edition b
Y Y Y Y Y




y richard Brealey, stewart myers,
Y Y Y Y Y




franklin allen Y




PDF FORMAT Y




Y




Y

, CHAPTERY1
IntroductionYtoYCorporateYFinance


TheYvaluesYshownYinYtheYsolutionsYmayYbeYroundedYforYdisplayYpurposes.YHowever,YtheYanswersYwereYder
ivedYusingYaYspreadsheetYwithoutYanyYintermediateYrounding.


AnswersYtoYProblemYSets

1. a. realY

b. executiveYairplanesY

c. brandYnamesY

d. financialY

e. bondsY

*f. investmentYorYcapitalYexpenditureY

*g.

capitalYbudgetingYorYinvestment

Yh. financingY

*NoteYthatYfYandYgYareYinterchangeableYinYtheYquestion.Y
EstYtime:Y01-05



2. AYtrademark,YaYfactory,YundevelopedYland,YandYyourYworkYforceY(c,Yd,Ye,YandYg)YareYallYrealYasset
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EstYtime:Y01-05



3. a.
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b. CapitalYexpenditureYmeansYinvestmentYinYrealYassets.YFinancingYmeansYraisingYtheYcas
hYforYthisYinvestment.Y

c. TheYsharesYofYpublicYcorporationsYareYtradedYonYstockYexchangesYandYcanYbeYpurchas
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d. UnlimitedYliability:YInvestorsYareYresponsibleYforYallYtheYfirm‘sYdebts.YAYsoleYproprietorYh
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Yinvestment,YbutY noYmore.Y

EstYtime:Y01-05
Y

, 4. ItemsYcYandYdYapplyYtoYcorporations.YBecauseYcorporationsYhaveYperpetualYlife,YownershipYcanY
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5. SeparationYofYownershipYfacilitatesYtheYkeyYattributesYofYaYcorporation,YincludingYlimitedYliabilityYf
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aYveryYvaluableYtoolYexploredYinYlaterYchapters.YAlso,YtheseYattributesYallowYinvestorsYtoYquicklyY
exit,Yenter,YorYshortYsellYanYinvestment,YtherebyYgeneratingYanYactiveYliquidYmarketYforYcorporatio
ns.Y

However,YtheseYpositiveYaspectsYalsoYintroduceYsubstantialYnegativeYexternalitiesYasYwell.YTheYs
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EstYtime:Y01-05



6. ShareholdersYwillYonlyYvoteYtoYmaximizeYshareholderYwealth.YShareholdersYcanYmodifyYtheirY
patternYofYconsumptionYthroughYborrowingYandYlending,YmatchYriskYpreferences,YandYhopefull
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EstYtime:Y01-05



7. IfYtheYinvestmentYincreasesYtheYfirm‘sYwealth,YitYincreasesYtheYfirm‘sYshareYvalue.YMs.YEspino
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EstYtime:Y01-05



8. a.
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nYU.S.Y
governmentYsecurities,YdependingYonYtheYrelativeYriskYbetweenYtheYtwoYassets.Y

b.
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EstYtime:Y06-10



9. ManagersYwouldYactYinYshareholders‘YinterestsYbecauseYtheyYhaveYaYlegalYdutyYtoYactYinYtheirYinte
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Ybonuses,Ystock,Y andY optionYpayoutsY withYvalueYtiedY(roughly)YtoYfirmYperformance.YManagersYma

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Y

, anYbeYfiredYbyYtheYboardYofYdirectorsY(electedYbyYshareholders).Y IfYmanagersY stillYfailYtoY actYinYsh
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Y

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