SOLUTION MANUAL FOR
df df df
Principles Of Corporate Finance
df df df df
14th Edition By Richard Brealey, Stewart Myers,
df df df df df df
df ALL Chapters (1 - 34)
df df df df
, TABLE OF CONTENTS DF DF
Chapter 1:
df Introduction to Corporate Finance
df df df df
Chapter 2:
df How to Calculate Present Values
df df df df df
Chapter 3:
df Valuing Bonds
df df
Chapter 4:
df Valuing Stocks
df df
Chapter 5:
df Net Present Value and Other Investment Criteria
df df df df df df df
Chapter 6:
df Making Investment Decisions with the Net Present Value Rule
df df df df df df df df df df
Chapter 7: Introduction to Risk, Diversification, and Portfolio Selection
df df df df df df df df
Chapter 8: The Capital Asset Pricing Model
df df df df df df
Chapter 9: Risk and the Cost of Capital
df df df df df df df
Chapter 10: Project Analysis
df df df
Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
df df df df df df df df df df
Chapter 12: Efficient Markets and Behavioral Finance
df df df df df df
Chapter 13: An Overview of Corporate Financing
df df df df df df
Chapter 14: How Corporations Issue Securities
df df df df df df
Chapter 15:
df Payout Policy
df df
Chapter 16:
df Does Debt Policy Matter?
df df df df
Chapter 17:
df How Much Should a Corporation Borrow?
df df df df df df
Chapter 18:
df Financing and Valuation
df df df df
Chapter 19: Agency Problems and Corporate Governance
df df df df df df
Chapter 20: Stakeholder Capitalism and Responsible Business
df df df df df df df
Chapter 21: Understanding Options
df df df
Chapter 22: Valuing Options
df df df
Chapter 23: Real Options
df df df df
Chapter 24: Credit Risk and the Value of Corporate Debt
df df df df df df df df df
Chapter 25: The Many Different Kinds of Debt
df df df df df df df
Chapter 26: Leasing
df df
Chapter 27: Managing Risk
df df df
Chapter 28: International Financial Management
df df df df df
Chapter 29: Financial Analysis
df df df
Chapter 30: Financial Planning
df df df
Chapter 31: Working Capital Management
df df df df
Chapter 32: Mergers
df df
Chapter 33: Corporate Restructuring
df df df df
,Chapter 34: Conclusion: What We Do and Do Not Know about Finance
df df df df df df df df df df df
CHAPTER 1 df
Introduction to Corporate Finance df df df
The values shown in the solutions may be rounded for display purposes. However, the answers were
df df df df df df df df df df df df df df df
derived using a spreadsheet without any intermediate rounding.
fd df df df df df df df
Answers to Problem Sets
df df df
1. a. real
b. executive airplanes df
c. brand names df
d. financial
e. bonds
*f. investment or capital expenditure df df df
*g. capital budgeting or investment
df df df
h. financing
*Note that f and g are interchangeable in the question.
df df df df df df df df df
Est time: 01-05
df df
2. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all real
df df df df df df df df df df df df df df df df df
assets. Real assets are identifiable as items with intrinsic value. The others in the list are
df df df df df df df df df df df df df df df df
financial assets,that is, these assets derive value because of a contractual claim.
df df fd df df df df df df df df df df
Est time: 01-05
df df
3. a. Financial assets, such as stocks or bank loans, are claims held by investors.
df df df df df df df df df df df df
Corporations sell financial assets to raise the cash to invest in real assets such
df df df df df df df df df df df df df df
as plantand equipment. Some real assets are intangible.
df df fd df df df df df df
b. Capital expenditure means investment in real assets. Financing means raising the
df df df df df df df df df df
cashfor this investment.
df fd df df
, c. The shares of public corporations are traded on stock exchanges and can be
df df df df df df df df df df df df
purchasedby a wide range of investors. The shares of closely held corporations
df fd df df df df df df df df df df df
are not publicly traded and are held by a small group of private investors.
df df df df df df df df df df df df df df
d. Unlimited liability: Investors are responsible for all the firm‘s debts. A sole
df df df df df df df df df df df
proprietor hasunlimited liability. Investors in corporations have limited liability. They
df df fd df df df df df df df df
can lose their investment, but no more.
df df df df df df df
Est time: 01-05
df df
df df df
Principles Of Corporate Finance
df df df df
14th Edition By Richard Brealey, Stewart Myers,
df df df df df df
df ALL Chapters (1 - 34)
df df df df
, TABLE OF CONTENTS DF DF
Chapter 1:
df Introduction to Corporate Finance
df df df df
Chapter 2:
df How to Calculate Present Values
df df df df df
Chapter 3:
df Valuing Bonds
df df
Chapter 4:
df Valuing Stocks
df df
Chapter 5:
df Net Present Value and Other Investment Criteria
df df df df df df df
Chapter 6:
df Making Investment Decisions with the Net Present Value Rule
df df df df df df df df df df
Chapter 7: Introduction to Risk, Diversification, and Portfolio Selection
df df df df df df df df
Chapter 8: The Capital Asset Pricing Model
df df df df df df
Chapter 9: Risk and the Cost of Capital
df df df df df df df
Chapter 10: Project Analysis
df df df
Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
df df df df df df df df df df
Chapter 12: Efficient Markets and Behavioral Finance
df df df df df df
Chapter 13: An Overview of Corporate Financing
df df df df df df
Chapter 14: How Corporations Issue Securities
df df df df df df
Chapter 15:
df Payout Policy
df df
Chapter 16:
df Does Debt Policy Matter?
df df df df
Chapter 17:
df How Much Should a Corporation Borrow?
df df df df df df
Chapter 18:
df Financing and Valuation
df df df df
Chapter 19: Agency Problems and Corporate Governance
df df df df df df
Chapter 20: Stakeholder Capitalism and Responsible Business
df df df df df df df
Chapter 21: Understanding Options
df df df
Chapter 22: Valuing Options
df df df
Chapter 23: Real Options
df df df df
Chapter 24: Credit Risk and the Value of Corporate Debt
df df df df df df df df df
Chapter 25: The Many Different Kinds of Debt
df df df df df df df
Chapter 26: Leasing
df df
Chapter 27: Managing Risk
df df df
Chapter 28: International Financial Management
df df df df df
Chapter 29: Financial Analysis
df df df
Chapter 30: Financial Planning
df df df
Chapter 31: Working Capital Management
df df df df
Chapter 32: Mergers
df df
Chapter 33: Corporate Restructuring
df df df df
,Chapter 34: Conclusion: What We Do and Do Not Know about Finance
df df df df df df df df df df df
CHAPTER 1 df
Introduction to Corporate Finance df df df
The values shown in the solutions may be rounded for display purposes. However, the answers were
df df df df df df df df df df df df df df df
derived using a spreadsheet without any intermediate rounding.
fd df df df df df df df
Answers to Problem Sets
df df df
1. a. real
b. executive airplanes df
c. brand names df
d. financial
e. bonds
*f. investment or capital expenditure df df df
*g. capital budgeting or investment
df df df
h. financing
*Note that f and g are interchangeable in the question.
df df df df df df df df df
Est time: 01-05
df df
2. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all real
df df df df df df df df df df df df df df df df df
assets. Real assets are identifiable as items with intrinsic value. The others in the list are
df df df df df df df df df df df df df df df df
financial assets,that is, these assets derive value because of a contractual claim.
df df fd df df df df df df df df df df
Est time: 01-05
df df
3. a. Financial assets, such as stocks or bank loans, are claims held by investors.
df df df df df df df df df df df df
Corporations sell financial assets to raise the cash to invest in real assets such
df df df df df df df df df df df df df df
as plantand equipment. Some real assets are intangible.
df df fd df df df df df df
b. Capital expenditure means investment in real assets. Financing means raising the
df df df df df df df df df df
cashfor this investment.
df fd df df
, c. The shares of public corporations are traded on stock exchanges and can be
df df df df df df df df df df df df
purchasedby a wide range of investors. The shares of closely held corporations
df fd df df df df df df df df df df df
are not publicly traded and are held by a small group of private investors.
df df df df df df df df df df df df df df
d. Unlimited liability: Investors are responsible for all the firm‘s debts. A sole
df df df df df df df df df df df
proprietor hasunlimited liability. Investors in corporations have limited liability. They
df df fd df df df df df df df df
can lose their investment, but no more.
df df df df df df df
Est time: 01-05
df df
