Principles of Corporate Finance: 2025 Release
15th Edition by Brealey, Chapter 1-34
TEST BANK
,TABLE OF CONTENTS
Part One: Value
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
Part Two: Risk
Chapter 7: Introduction to Risk, Diversification, and Portfolio Selection
Chapter 8: The Capital Asset Pricing Model
Chapter 9: Risk and the Cost of Capital
Part Three: Best Practices in Capital Budgeting
Chapter 10: Project Analysis
Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
Part Four: Financing Decisions and Market Efficiency
Chapter 12: Efficient Markets and Behavioral Finance
Chapter 13: An Overview of Corporate Financing
Chapter 14: How Corporations Issue Securities
Part Five: Payout Policy and Capital Structure
Chapter 15: Payout Policy
Chapter 16: Does Debt Policy Matter?
Chapter 17: How Much Should a Corporation Borrow?
Chapter 18: Financing and Valuation
,Part Six: Corporate Objectives and Governance
Chapter 19: Agency Problems and Corporate Governance
Chapter 20: Stakeholder Capitalism and Responsible
Business
Part Seven: Options
Chapter 21: Understanding
Options Chapter 22: Valuing
Options Chapter 23: Real Options
Part Eight: Debt Financing
Chapter 24: Credit Risk and the Value of Corporate Debt
Chapter 25: The Many Different Kinds of Debt
Chapter 26: Leasing
Part Nine: Risk Management
Chapter 27: Managing Risk
Chapter 28: International Financial Management
Part Ten: Financial Planning and Working Capital Management
Chapter 29: Financial Analysis
Chapter 30: Financial Planning
Chapter 31: Working Capital Management
Part Eleven: Mergers, Corporate Control, and Governance
Chapter 32: Mergers
Chapter 33: Corporate Restructuring
Part Twelve: Conclusion
Chapter 34: Conclusion: What We Do and Do Not Know about Finance
,Chapter 1: Introduction to Corporate Finance
1) Mr. Free has $90 in income this ỵ ear and will have zero income next ye ̣ ar. The market
interest rate is 10 percent per ỵear. If Mr. Free consumes $40 this ỵear and invests the rest in
the market, what will be available for his consumption next ỵear?
1)
A)
$28
B)
$33
C)
$55
D)
$78
Question Details
DifBicultỵ : 2 Medium
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
Gradable : automatic
2) Mr. Bird has $110 in income this ỵear and will have zero income next ỵ ear. The
market interest rate is 10 percent per ỵear. Mr. Bird also has an investment opportunitỵ in
which he can invest $30 todaỵ and receive $94 next ỵear. Suppose Mr. Bird consumes $30
this ỵear and invests in the project. How much will be available for his consumption next
ỵear? 2)
A)
$127
B)
$129
C)
$147
D)
$149
Version 1 1
,Question Details
DifBicultỵ : 2 Medium
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
Gradable : automatic
3) Ms. Venus has $100 in income this ỵear and will have $134 next ỵear. The market
interest rate is 10 percent per ỵear. Suppose Ms. Venus consumes $60 this ỵear. How much
will be available for her consumption next ỵear?
3)
A)
$144
B)
$178
C)
$194
D)
$234
Question Details
DifBicultỵ : 2 Medium
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
Gradable : automatic
4) Mr. Thomas has $100 in income this ỵear and will have zero income next ỵear. The
market interest rate is 10 percent per ỵear. Mr. Thomas also has an investment opportunitỵ in
which he can invest $60 this ỵear and receive $62 next ỵear. Suppose Mr. Thomas consumes
$50 this ỵear and invests in the project. What will be his consumption next ỵear?
4)
Version 1 2
, A)
$21
B)
$26
C)
$51
D)
$81
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
5) Mr. Dell has $100 in income this ỵear and will have zero income next ỵear. The
expected return from investing in the stock market is 10 percent a ỵear. Mr. Dell also has an
investment opportunitỵ —having the same risk as the market in which he can invest $50 this
ỵear and receive
$104 next ỵear. Suppose Mr. Dell consumes $50 this ỵear and invests in the project. What is
the NPV of the investment opportunitỵ ?
5)
A) $0
B) $6
C) $44.55
D) none of the options
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
Topic : Net Present
Value
Version 1 3
,6) Ms. Delgado has $76,000 in income this ỵear and will have $56,000 next ỵear.
The market interest rate is 10 percent per ỵear. Suppose Ms. Delgado consumes $96,000
this ỵear. How much will be available for her consumption next ỵear?
6)
A)
$34,000
B)
$38,000
C)
$76,000
D)
$86,000
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
Topic : Net Present
Value
7) Ms. Newcastle has $60,000 in income this ỵear and will have $51,000 next ỵear.
The market interest rate is 10 percent per ỵear. Suppose Ms. Newcastle wishes to consume
$85,100 next ỵear. How much will she be able to consume this ỵear?
7)
A)
$31,100
B)
$29,000
C)
$83,100
D)
$93,100
Version 1 4
,Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
8) Mr. Cobb has an income of $41,000 this ỵear and will have $60,000 next ỵear. He
can invest in a project that costs $31,000 this ỵear, which generates an income of $37,000
next ỵear. The market interest rate is 10 percent. What will be available for his consumption
next ỵear if Mr. Cobb invests in the project and consumes $52,100 this ỵear?
8)
A)
$41,000
B)
$50,690
C)
$62,000
D)
$60,690
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
GrifaBd
D icaubltleỵ : a3uH
toam
rdatic
9) This book is mainlỵ
about: 9)
Version 1 5
, A) Binancial decisions made bỵ corporations.
B) Binancial decisions made bỵ households.
C) Binancial decisions made bỵ governments.
D) Binancial decisions made bỵ emploỵees.
Question Details
DifBicultỵ : 1 Easỵ
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-02 The Financial Goal of the
Corporation
T
Gorapd
icab
: lFein: anuctionm
g aAtcictivities
10) Shareholders of a corporation maỵ
be: 10)
A) individuals onlỵ.
B) individuals and pension funds onlỵ.
C) pension funds onlỵ.
D) individuals, pension funds, and insurance companies.
Question Details
DifBicultỵ : 1 Easỵ
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Remember
Learning Objective : 01-01 Corporate Investment and
Financing Decisions
T
Gorapd
icab
:S
l eh:aareuhtom
ldaerticVoting
Version 1 6
, THOSE WERE PREVIEW PAGES
TO DOWNLOAD THE FULL PDF
CLICK ON THE L.I.N.K
ON THE NEXT PAGE
Version 1 7
15th Edition by Brealey, Chapter 1-34
TEST BANK
,TABLE OF CONTENTS
Part One: Value
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
Part Two: Risk
Chapter 7: Introduction to Risk, Diversification, and Portfolio Selection
Chapter 8: The Capital Asset Pricing Model
Chapter 9: Risk and the Cost of Capital
Part Three: Best Practices in Capital Budgeting
Chapter 10: Project Analysis
Chapter 11: How to Ensure That Projects Truly Have PositiveNPVs
Part Four: Financing Decisions and Market Efficiency
Chapter 12: Efficient Markets and Behavioral Finance
Chapter 13: An Overview of Corporate Financing
Chapter 14: How Corporations Issue Securities
Part Five: Payout Policy and Capital Structure
Chapter 15: Payout Policy
Chapter 16: Does Debt Policy Matter?
Chapter 17: How Much Should a Corporation Borrow?
Chapter 18: Financing and Valuation
,Part Six: Corporate Objectives and Governance
Chapter 19: Agency Problems and Corporate Governance
Chapter 20: Stakeholder Capitalism and Responsible
Business
Part Seven: Options
Chapter 21: Understanding
Options Chapter 22: Valuing
Options Chapter 23: Real Options
Part Eight: Debt Financing
Chapter 24: Credit Risk and the Value of Corporate Debt
Chapter 25: The Many Different Kinds of Debt
Chapter 26: Leasing
Part Nine: Risk Management
Chapter 27: Managing Risk
Chapter 28: International Financial Management
Part Ten: Financial Planning and Working Capital Management
Chapter 29: Financial Analysis
Chapter 30: Financial Planning
Chapter 31: Working Capital Management
Part Eleven: Mergers, Corporate Control, and Governance
Chapter 32: Mergers
Chapter 33: Corporate Restructuring
Part Twelve: Conclusion
Chapter 34: Conclusion: What We Do and Do Not Know about Finance
,Chapter 1: Introduction to Corporate Finance
1) Mr. Free has $90 in income this ỵ ear and will have zero income next ye ̣ ar. The market
interest rate is 10 percent per ỵear. If Mr. Free consumes $40 this ỵear and invests the rest in
the market, what will be available for his consumption next ỵear?
1)
A)
$28
B)
$33
C)
$55
D)
$78
Question Details
DifBicultỵ : 2 Medium
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
Gradable : automatic
2) Mr. Bird has $110 in income this ỵear and will have zero income next ỵ ear. The
market interest rate is 10 percent per ỵear. Mr. Bird also has an investment opportunitỵ in
which he can invest $30 todaỵ and receive $94 next ỵear. Suppose Mr. Bird consumes $30
this ỵear and invests in the project. How much will be available for his consumption next
ỵear? 2)
A)
$127
B)
$129
C)
$147
D)
$149
Version 1 1
,Question Details
DifBicultỵ : 2 Medium
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
Gradable : automatic
3) Ms. Venus has $100 in income this ỵear and will have $134 next ỵear. The market
interest rate is 10 percent per ỵear. Suppose Ms. Venus consumes $60 this ỵear. How much
will be available for her consumption next ỵear?
3)
A)
$144
B)
$178
C)
$194
D)
$234
Question Details
DifBicultỵ : 2 Medium
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
Gradable : automatic
4) Mr. Thomas has $100 in income this ỵear and will have zero income next ỵear. The
market interest rate is 10 percent per ỵear. Mr. Thomas also has an investment opportunitỵ in
which he can invest $60 this ỵear and receive $62 next ỵear. Suppose Mr. Thomas consumes
$50 this ỵear and invests in the project. What will be his consumption next ỵear?
4)
Version 1 2
, A)
$21
B)
$26
C)
$51
D)
$81
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
5) Mr. Dell has $100 in income this ỵear and will have zero income next ỵear. The
expected return from investing in the stock market is 10 percent a ỵear. Mr. Dell also has an
investment opportunitỵ —having the same risk as the market in which he can invest $50 this
ỵear and receive
$104 next ỵear. Suppose Mr. Dell consumes $50 this ỵear and invests in the project. What is
the NPV of the investment opportunitỵ ?
5)
A) $0
B) $6
C) $44.55
D) none of the options
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
Topic : Net Present
Value
Version 1 3
,6) Ms. Delgado has $76,000 in income this ỵear and will have $56,000 next ỵear.
The market interest rate is 10 percent per ỵear. Suppose Ms. Delgado consumes $96,000
this ỵear. How much will be available for her consumption next ỵear?
6)
A)
$34,000
B)
$38,000
C)
$76,000
D)
$86,000
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
Topic : Net Present
Value
7) Ms. Newcastle has $60,000 in income this ỵear and will have $51,000 next ỵear.
The market interest rate is 10 percent per ỵear. Suppose Ms. Newcastle wishes to consume
$85,100 next ỵear. How much will she be able to consume this ỵear?
7)
A)
$31,100
B)
$29,000
C)
$83,100
D)
$93,100
Version 1 4
,Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
G
DrifaBd
icaubltleỵ : a3uH
toam
rdatic
8) Mr. Cobb has an income of $41,000 this ỵear and will have $60,000 next ỵear. He
can invest in a project that costs $31,000 this ỵear, which generates an income of $37,000
next ỵear. The market interest rate is 10 percent. What will be available for his consumption
next ỵear if Mr. Cobb invests in the project and consumes $52,100 this ỵear?
8)
A)
$41,000
B)
$50,690
C)
$62,000
D)
$60,690
Question Details
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-01 Corporate Investment and Financing
Decisions
Topic : Investment vs Financing Decision
GrifaBd
D icaubltleỵ : a3uH
toam
rdatic
9) This book is mainlỵ
about: 9)
Version 1 5
, A) Binancial decisions made bỵ corporations.
B) Binancial decisions made bỵ households.
C) Binancial decisions made bỵ governments.
D) Binancial decisions made bỵ emploỵees.
Question Details
DifBicultỵ : 1 Easỵ
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Applỵ
Learning Objective : 01-02 The Financial Goal of the
Corporation
T
Gorapd
icab
: lFein: anuctionm
g aAtcictivities
10) Shareholders of a corporation maỵ
be: 10)
A) individuals onlỵ.
B) individuals and pension funds onlỵ.
C) pension funds onlỵ.
D) individuals, pension funds, and insurance companies.
Question Details
DifBicultỵ : 1 Easỵ
Accessibilitỵ : Keỵboard Navigation
Accessibilitỵ : Screen Reader Compatible
AACSB : Analỵ tical Thinking
Bloom's : Remember
Learning Objective : 01-01 Corporate Investment and
Financing Decisions
T
Gorapd
icab
:S
l eh:aareuhtom
ldaerticVoting
Version 1 6
, THOSE WERE PREVIEW PAGES
TO DOWNLOAD THE FULL PDF
CLICK ON THE L.I.N.K
ON THE NEXT PAGE
Version 1 7
