SOLUTION MANUAL FOR
PRINCIPLES OF CORPORATE
FINANCE 14TH EDITION BY
RICHARD BREALEY, STEWART
MYERS, ALL CHAPTERS (1 - 34)
1
, TABLE OF CONTENT
Chapter 1: Introduction to
Corporate Finance Chapter 2: How
to Calculate Present Values
Chapter 3: Valuing Bonds
Chapter 4: Valuing Stocks
Chapter 5: Net Present Value and Other Investment Criteria
Chapter 6: Making Investment Decisions with the Net Present Value Rule
Chapter 7: Introduction to Risk, Diversification, and
Portfolio Selection Chapter 8: The Capital Asset Pricing
Model
Chapter 9: Risk and the Cost of Capital
Chapter 10: Project Analysis
Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
Chapter 12: Efficient Markets and
Behavioral Finance Chapter 13: An
Overview of Corporate Financing Chapter
14: How Corporations Issue Securities
Chapter 15: Payout Policy
Chapter 16: Does Debt Policy Matter?
Chapter 17: How Much Should a
Corporation Borrow? Chapter 18:
Financing and Valuation
Chapter 19: Agency Problems and Corporate
Governance Chapter 20: Stakeholder Capitalism
and Responsible Business
Chapter 21: Understanding
Options Chapter 22:
Valuing Options Chapter
2
,23: Real Options
Chapter 24: Credit Risk and the Value of
Corporate Debt Chapter 25: The Many
Different Kinds of Debt
Chapter 26: Leasing
Chapter 27: Managing Risk
Chapter 28: International Financial Management
Chapter 29: Financial
Analysis Chapter 30:
Financial Planning
Chapter 31: Working Capital Management
Chapter 32: Mergers
Chapter 33: Corporate Restructuring Chapter 34: Conclusion: What We Do and Do
Not Know about Finance
3
, CHAPTER 1
Introduction to Corporate Finance
The values shown in the solutions may be rounded forDdisplay purposes. However, the
answers were derived using a spreadsheet without any intermediate rounding.
Answers to Problem Sets
1. a. real
b. executive airplanes
c. brand names
d. financial
e. bonds
*f. investment or capital expenditure
*g. capital budgeting or investment
h. financing
*Note that f and g are interchangeable in the question.
Est time: 01-05
2. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all
real a ssets. Real assets are identifiable as items with intrinsic value. The others in
the list are fina ncial assets, that is, these assets derive value because of a
contractual claim.
Est time: 01-05
3. a.
Financial assets, such as stocks or bank loans, are claims held by
investors. Corporations sell financial assets to raise the cash to invest in
real assets such a s plant and equipment. Some real assets are
intangible.
4
PRINCIPLES OF CORPORATE
FINANCE 14TH EDITION BY
RICHARD BREALEY, STEWART
MYERS, ALL CHAPTERS (1 - 34)
1
, TABLE OF CONTENT
Chapter 1: Introduction to
Corporate Finance Chapter 2: How
to Calculate Present Values
Chapter 3: Valuing Bonds
Chapter 4: Valuing Stocks
Chapter 5: Net Present Value and Other Investment Criteria
Chapter 6: Making Investment Decisions with the Net Present Value Rule
Chapter 7: Introduction to Risk, Diversification, and
Portfolio Selection Chapter 8: The Capital Asset Pricing
Model
Chapter 9: Risk and the Cost of Capital
Chapter 10: Project Analysis
Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
Chapter 12: Efficient Markets and
Behavioral Finance Chapter 13: An
Overview of Corporate Financing Chapter
14: How Corporations Issue Securities
Chapter 15: Payout Policy
Chapter 16: Does Debt Policy Matter?
Chapter 17: How Much Should a
Corporation Borrow? Chapter 18:
Financing and Valuation
Chapter 19: Agency Problems and Corporate
Governance Chapter 20: Stakeholder Capitalism
and Responsible Business
Chapter 21: Understanding
Options Chapter 22:
Valuing Options Chapter
2
,23: Real Options
Chapter 24: Credit Risk and the Value of
Corporate Debt Chapter 25: The Many
Different Kinds of Debt
Chapter 26: Leasing
Chapter 27: Managing Risk
Chapter 28: International Financial Management
Chapter 29: Financial
Analysis Chapter 30:
Financial Planning
Chapter 31: Working Capital Management
Chapter 32: Mergers
Chapter 33: Corporate Restructuring Chapter 34: Conclusion: What We Do and Do
Not Know about Finance
3
, CHAPTER 1
Introduction to Corporate Finance
The values shown in the solutions may be rounded forDdisplay purposes. However, the
answers were derived using a spreadsheet without any intermediate rounding.
Answers to Problem Sets
1. a. real
b. executive airplanes
c. brand names
d. financial
e. bonds
*f. investment or capital expenditure
*g. capital budgeting or investment
h. financing
*Note that f and g are interchangeable in the question.
Est time: 01-05
2. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are all
real a ssets. Real assets are identifiable as items with intrinsic value. The others in
the list are fina ncial assets, that is, these assets derive value because of a
contractual claim.
Est time: 01-05
3. a.
Financial assets, such as stocks or bank loans, are claims held by
investors. Corporations sell financial assets to raise the cash to invest in
real assets such a s plant and equipment. Some real assets are
intangible.
4
