SOLUTION MANUAL FOR
Principles Of Corporate Finance
14th Edition By Richard Brealey, Stewart Myers,
ALL Chapters (1 - 34)
, TABLE OF CONTENTS
N N
Chaptern1:nIntroductionntonCorporatenFinance
Chaptern2:nHowntonCalculatenPresentnValues
Chaptern3:nValuingnBonds
Chaptern4:nValuingnStocks
Chaptern5:nNetnPresentnValuenandnOthernInvestmentnCriteria
Chaptern6:nMakingnInvestmentnDecisionsnwithnthenNetnPresentnValuenRulen
Chaptern7:nIntroductionntonRisk,nDiversification,nandnPortfolionSelection
Chaptern8:nThenCapitalnAssetnPricingnModel
Chaptern9:nRisknandnthenCostnofnCapital
Chaptern10:nProjectnAnalysis
Chaptern11:nHowntonEnsurenThatnProjectsnTrulynHavenPositiveNPVsn
Chaptern12:nEfficientnMarketsnandnBehavioralnFinance
Chaptern13:nAnnOverviewnofnCorporatenFinancing
Chaptern14:nHownCorporationsnIssuenSecuritiesn
Chaptern15:nPayoutnPolicy
Chaptern16:nDoesnDebtnPolicynMatter?
Chaptern17:nHownMuchnShouldnanCorporationnBorrow?
Chaptern18:nFinancingnandnValuationn
Chaptern19:nAgencynProblemsnandnCorporatenGovernance
Chaptern20:nStakeholdernCapitalismnandnResponsiblenBusinessn
Chaptern21:nUnderstandingnOptions
Chaptern22:nValuingnOptions
Chaptern23:nRealnOptionsn
Chaptern24:nCreditnRisknandnthenValuenofnCorporatenDebt
Chaptern25:nThenManynDifferentnKindsnofnDebt
Chaptern26:nLeasing
Chaptern27:nManagingnRisk
Chaptern28:nInternationalnFinancialnManagementn
Chaptern29:nFinancialnAnalysis
Chaptern30:nFinancialnPlanning
Chaptern31:nWorkingnCapitalnManagement
Chaptern32:nMergers
Chaptern33:nCorporatenRestructuringn
,Chaptern34:nConclusion:nWhatnWenDonandnDonNotnKnownaboutnFinance
CHAPTERn1
IntroductionntonCorporatenFinance
Thenvaluesnshownninnthensolutionsnmaynbenroundednforndisplaynpurposes.nHowever,nthenanswersnwerende
rivednusingnanspreadsheetnwithoutnanynintermediatenrounding.
AnswersntonProblemnSets
1. a. real
b. executivenairplanes
c. brandnnames
d. financial
e. bonds
*f. investmentnorncapitalnexpenditure
*g. capitalnbudgetingnorninvestment
h. financing
*Notenthatnfnandngnareninterchangeableninnthenquestion.
Estntime:n01-05
2. Antrademark,nanfactory,nundevelopednland,nandnyournworknforcen(c,nd,ne,nandng)narenallnrealnasse
ts.nRealnassetsnarenidentifiablenasnitemsnwithnintrinsicnvalue.nThenothersninnthenlistnarenfinancialna
ssets,nthatnis,nthesenassetsnderivenvaluenbecausenofnancontractualnclaim.
Estntime:n01-05
3. a.
Financialnassets,nsuchnasnstocksnornbanknloans,narenclaimsnheldnbyninvestors.nC
orporationsnsellnfinancialnassetsntonraisenthencashntoninvestninnrealnassetsnsuchnasnplan
tnandnequipment.nSomenrealnassetsnarenintangible.
b. Capitalnexpenditurenmeansninvestmentninnrealnassets.nFinancingnmeansnraisingnthen ca
shnfornthisninvestment.
, c. Thensharesnofnpublicncorporationsnarentradednonnstocknexchangesnandncannbenpurchas
ednbynanwidenrangenofninvestors.nThensharesnofncloselynheldncorporationsnarennotn public
lyntradednandnarenheldnbynansmallngroupnofnprivateninvestors.
d. Unlimitednliability:nInvestorsnarenresponsiblenfornallnthenfirm‘sndebts.nAnsolenproprietornh
asnunlimitednliability.nInvestorsninncorporationsnhavenlimitednliability.nTheyncannlosentheir
ninvestment,nbutnnonmore.
Estntime:n01-05
Principles Of Corporate Finance
14th Edition By Richard Brealey, Stewart Myers,
ALL Chapters (1 - 34)
, TABLE OF CONTENTS
N N
Chaptern1:nIntroductionntonCorporatenFinance
Chaptern2:nHowntonCalculatenPresentnValues
Chaptern3:nValuingnBonds
Chaptern4:nValuingnStocks
Chaptern5:nNetnPresentnValuenandnOthernInvestmentnCriteria
Chaptern6:nMakingnInvestmentnDecisionsnwithnthenNetnPresentnValuenRulen
Chaptern7:nIntroductionntonRisk,nDiversification,nandnPortfolionSelection
Chaptern8:nThenCapitalnAssetnPricingnModel
Chaptern9:nRisknandnthenCostnofnCapital
Chaptern10:nProjectnAnalysis
Chaptern11:nHowntonEnsurenThatnProjectsnTrulynHavenPositiveNPVsn
Chaptern12:nEfficientnMarketsnandnBehavioralnFinance
Chaptern13:nAnnOverviewnofnCorporatenFinancing
Chaptern14:nHownCorporationsnIssuenSecuritiesn
Chaptern15:nPayoutnPolicy
Chaptern16:nDoesnDebtnPolicynMatter?
Chaptern17:nHownMuchnShouldnanCorporationnBorrow?
Chaptern18:nFinancingnandnValuationn
Chaptern19:nAgencynProblemsnandnCorporatenGovernance
Chaptern20:nStakeholdernCapitalismnandnResponsiblenBusinessn
Chaptern21:nUnderstandingnOptions
Chaptern22:nValuingnOptions
Chaptern23:nRealnOptionsn
Chaptern24:nCreditnRisknandnthenValuenofnCorporatenDebt
Chaptern25:nThenManynDifferentnKindsnofnDebt
Chaptern26:nLeasing
Chaptern27:nManagingnRisk
Chaptern28:nInternationalnFinancialnManagementn
Chaptern29:nFinancialnAnalysis
Chaptern30:nFinancialnPlanning
Chaptern31:nWorkingnCapitalnManagement
Chaptern32:nMergers
Chaptern33:nCorporatenRestructuringn
,Chaptern34:nConclusion:nWhatnWenDonandnDonNotnKnownaboutnFinance
CHAPTERn1
IntroductionntonCorporatenFinance
Thenvaluesnshownninnthensolutionsnmaynbenroundednforndisplaynpurposes.nHowever,nthenanswersnwerende
rivednusingnanspreadsheetnwithoutnanynintermediatenrounding.
AnswersntonProblemnSets
1. a. real
b. executivenairplanes
c. brandnnames
d. financial
e. bonds
*f. investmentnorncapitalnexpenditure
*g. capitalnbudgetingnorninvestment
h. financing
*Notenthatnfnandngnareninterchangeableninnthenquestion.
Estntime:n01-05
2. Antrademark,nanfactory,nundevelopednland,nandnyournworknforcen(c,nd,ne,nandng)narenallnrealnasse
ts.nRealnassetsnarenidentifiablenasnitemsnwithnintrinsicnvalue.nThenothersninnthenlistnarenfinancialna
ssets,nthatnis,nthesenassetsnderivenvaluenbecausenofnancontractualnclaim.
Estntime:n01-05
3. a.
Financialnassets,nsuchnasnstocksnornbanknloans,narenclaimsnheldnbyninvestors.nC
orporationsnsellnfinancialnassetsntonraisenthencashntoninvestninnrealnassetsnsuchnasnplan
tnandnequipment.nSomenrealnassetsnarenintangible.
b. Capitalnexpenditurenmeansninvestmentninnrealnassets.nFinancingnmeansnraisingnthen ca
shnfornthisninvestment.
, c. Thensharesnofnpublicncorporationsnarentradednonnstocknexchangesnandncannbenpurchas
ednbynanwidenrangenofninvestors.nThensharesnofncloselynheldncorporationsnarennotn public
lyntradednandnarenheldnbynansmallngroupnofnprivateninvestors.
d. Unlimitednliability:nInvestorsnarenresponsiblenfornallnthenfirm‘sndebts.nAnsolenproprietornh
asnunlimitednliability.nInvestorsninncorporationsnhavenlimitednliability.nTheyncannlosentheir
ninvestment,nbutnnonmore.
Estntime:n01-05