SOLUTION MANUAL FOR Fundamentals of Financial Managemen
Concise Edition 9th Edition by Eugene Brigham Joel Houston
9TH EDITION
, Instructors Manual
Contents
Preface
Alternative Formats For The Introductory Course V
Contents Of The Instructor’s Manual V
Integrated Cases And Lecture Presentation Software V
Electronic Slide Show Vi
Comprehensive/Spreadsheet Problems Vii
Spreadsheet Models Vii
World Wide Web Site Vii
Study Guide Viii
Test Bank Viii
Technology Supplement Ix
Instructor’s Resource CD-ROM Ix
Ordering Ancillary Materials Ix
Conclusion X
Course Syllabus Xi
Course Schedule Xv
Answers To End-Of-Chapter Problems Xvii
Chapter 1 An Overview Of Financial Management 1
Chapter 2 Financial Markets And Institutions 7
Chapter 3 Financial Statements, Cash Flow, And Taxes 21
Chapter 4 Analysis Of Financial Statements 41
Chapter 5 Time Value Of Money 71
Chapter 6 Interest Rates 113
Chapter 7 Bonds And Their Valuation 137
Chapter 8 Risk And Rates Of Return 177
Chapter 9 Stocks And Their Valuation 211
Chapter 10 The Cost Of Capital 241
Chapter 11 The Basics Of Capital Budgeting 261
Preface iii
,Chapter 12 Cash Flow Estimation And Risk Analysis 299
Chapter 13 Real Options And Other Topics In Capital Budgeting 345
Chapter 14 Capital Structure And Leverage 363
Chapter 15 Distributions To Shareholders: Dividends And Share Repurchases 399
Chapter 16 Working Capital Management 425
Chapter 17 Financial Planning And Forecasting 453
Chapter 18 Derivatives And Risk Management 477
Chapter 19 Multinational Financial Management 499
Chapter 20 Hybrid Financing: Preferred Stock, Leasing, Warrants, And Convertibles 527
Chapter 21 Mergers And Acquisitions 557
iv Preface
, Preface
This Preface Explains How We Have Used Fundamentals Of Financial Management, Twelfth Edition, And It
Then Describes The Instructional Aids Contained In The Instructor’s Manual Or Available Separately From
Cengage Learning.
Alternative Formats For The Introductory Course
There Is No One Best Way To Teach The Introductory Finance Class—The Optimal Course Structure Varies
With Students’ Backgrounds, Instructors’ Interests, Number Of Credit Hours, And Position Of The Course
In The Overall Curriculum. Further, Since These Factors Change Over Time, Most Of Us Vary Our
Approaches From Year To Year. Still, You May Find It Useful To Learn How Fundamentals Has Been Used
At Florida And Elsewhere.
Fundamentals Was Designed For Use In The Introductory Undergraduate Finance Course. This Course Is
Typically Taught In One Term, Although Some Schools Cover The Material In Two Terms. At Florida, We
Require A One- Semester, 4-Credit Hour Course That Has Approximately 58 Fifty-Minute Class Periods. Our
Syllabus Is Provided Later In This Manual.
Contents Of The Instructor’s Manual
This Instructor’s Manual Contains Learning Objectives, Lecture Suggestions, Answers To End-Of-Chapter
Questions, Solutions To End-Of-Chapter Problems, Solutions To Comprehensive/Spreadsheet Problems, And
Complete Restatement And Full Solution To The Integrated Cases. In Addition, At The End Of This Preface
We Have Included Brief Quantitative Answers For The Quantitative End-Of Chapter Problems, Except For
The Comprehensive Problems. Appendix B, At The End Of The Text, Provides Quantitative Solutions Only
To
Even-Numbered Problems. So For Those Instructors Who Wish To Provide Solutions To All Quantitative
Problems, We Provide This At The End Of The Preface. We Have Organized The Instructor’s Manual By
Chapter For Your Convenience.
Integrated Cases And Lecture Presentation Software
One Of The Most Important Pedagogic Aids In Fundamentals Is The Set Of “Integrated Cases” Provided With
The End-Of-Chapter Problems. In Past Editions Of Fundamentals, These Cases Were Called “Integrative
Problems,” But Since They Are Actually Mini Cases, We Changed The Names. Whatever They Are Called, The
Integrated Cases Have Been Extremely Well Received By Instructors And Students Alike. They Provide An
Excellent Vehicle For Covering The Key Elements Of Each Chapter In A Coherent, Systematic, And
Interesting Manner. They Are Equally Effective In Small, Discussion-Oriented Classes Or In Larger Lecture-
Based Classes. The Case Covers The Key Elements Of The Chapter, And Its Solution Is Set Up In A Lecture
Format, With More Detail Than Our Normal End-Of-Chapter Problem Solutions.
Since The Cases Are Highly Structured, One Might Think That They Seriously Reduce Instructors’
Flexibility. However, This Is Less True Than You Would Imagine, Because The Cases Are Written In A
Manner That Makes It Easy To Delete Sections, To Add New Material, And To Provide Alternative And/Or
Supplemental Examples.
Preface v
Concise Edition 9th Edition by Eugene Brigham Joel Houston
9TH EDITION
, Instructors Manual
Contents
Preface
Alternative Formats For The Introductory Course V
Contents Of The Instructor’s Manual V
Integrated Cases And Lecture Presentation Software V
Electronic Slide Show Vi
Comprehensive/Spreadsheet Problems Vii
Spreadsheet Models Vii
World Wide Web Site Vii
Study Guide Viii
Test Bank Viii
Technology Supplement Ix
Instructor’s Resource CD-ROM Ix
Ordering Ancillary Materials Ix
Conclusion X
Course Syllabus Xi
Course Schedule Xv
Answers To End-Of-Chapter Problems Xvii
Chapter 1 An Overview Of Financial Management 1
Chapter 2 Financial Markets And Institutions 7
Chapter 3 Financial Statements, Cash Flow, And Taxes 21
Chapter 4 Analysis Of Financial Statements 41
Chapter 5 Time Value Of Money 71
Chapter 6 Interest Rates 113
Chapter 7 Bonds And Their Valuation 137
Chapter 8 Risk And Rates Of Return 177
Chapter 9 Stocks And Their Valuation 211
Chapter 10 The Cost Of Capital 241
Chapter 11 The Basics Of Capital Budgeting 261
Preface iii
,Chapter 12 Cash Flow Estimation And Risk Analysis 299
Chapter 13 Real Options And Other Topics In Capital Budgeting 345
Chapter 14 Capital Structure And Leverage 363
Chapter 15 Distributions To Shareholders: Dividends And Share Repurchases 399
Chapter 16 Working Capital Management 425
Chapter 17 Financial Planning And Forecasting 453
Chapter 18 Derivatives And Risk Management 477
Chapter 19 Multinational Financial Management 499
Chapter 20 Hybrid Financing: Preferred Stock, Leasing, Warrants, And Convertibles 527
Chapter 21 Mergers And Acquisitions 557
iv Preface
, Preface
This Preface Explains How We Have Used Fundamentals Of Financial Management, Twelfth Edition, And It
Then Describes The Instructional Aids Contained In The Instructor’s Manual Or Available Separately From
Cengage Learning.
Alternative Formats For The Introductory Course
There Is No One Best Way To Teach The Introductory Finance Class—The Optimal Course Structure Varies
With Students’ Backgrounds, Instructors’ Interests, Number Of Credit Hours, And Position Of The Course
In The Overall Curriculum. Further, Since These Factors Change Over Time, Most Of Us Vary Our
Approaches From Year To Year. Still, You May Find It Useful To Learn How Fundamentals Has Been Used
At Florida And Elsewhere.
Fundamentals Was Designed For Use In The Introductory Undergraduate Finance Course. This Course Is
Typically Taught In One Term, Although Some Schools Cover The Material In Two Terms. At Florida, We
Require A One- Semester, 4-Credit Hour Course That Has Approximately 58 Fifty-Minute Class Periods. Our
Syllabus Is Provided Later In This Manual.
Contents Of The Instructor’s Manual
This Instructor’s Manual Contains Learning Objectives, Lecture Suggestions, Answers To End-Of-Chapter
Questions, Solutions To End-Of-Chapter Problems, Solutions To Comprehensive/Spreadsheet Problems, And
Complete Restatement And Full Solution To The Integrated Cases. In Addition, At The End Of This Preface
We Have Included Brief Quantitative Answers For The Quantitative End-Of Chapter Problems, Except For
The Comprehensive Problems. Appendix B, At The End Of The Text, Provides Quantitative Solutions Only
To
Even-Numbered Problems. So For Those Instructors Who Wish To Provide Solutions To All Quantitative
Problems, We Provide This At The End Of The Preface. We Have Organized The Instructor’s Manual By
Chapter For Your Convenience.
Integrated Cases And Lecture Presentation Software
One Of The Most Important Pedagogic Aids In Fundamentals Is The Set Of “Integrated Cases” Provided With
The End-Of-Chapter Problems. In Past Editions Of Fundamentals, These Cases Were Called “Integrative
Problems,” But Since They Are Actually Mini Cases, We Changed The Names. Whatever They Are Called, The
Integrated Cases Have Been Extremely Well Received By Instructors And Students Alike. They Provide An
Excellent Vehicle For Covering The Key Elements Of Each Chapter In A Coherent, Systematic, And
Interesting Manner. They Are Equally Effective In Small, Discussion-Oriented Classes Or In Larger Lecture-
Based Classes. The Case Covers The Key Elements Of The Chapter, And Its Solution Is Set Up In A Lecture
Format, With More Detail Than Our Normal End-Of-Chapter Problem Solutions.
Since The Cases Are Highly Structured, One Might Think That They Seriously Reduce Instructors’
Flexibility. However, This Is Less True Than You Would Imagine, Because The Cases Are Written In A
Manner That Makes It Easy To Delete Sections, To Add New Material, And To Provide Alternative And/Or
Supplemental Examples.
Preface v
