SOLUTION MANUAL FOR
Principles Of Corporate Finance
14th Edition By Richard Brealey, Stewart Myers,
ALL Chapters (1 - 34)
, TABLE OF CONTENTS
D D
Chapteryo1:yoIntroductionyotoyoCorporateyoFina
nceyoChapteryo2:yoHowyotoyoCalculateyoPresent
yoValuesyoChapteryo3:yoValuingyoBonds
Chapteryo 4:yo Valuingyo Stocks
Chapteryo 5:yo Nety o Presentyo Valueyo andy o Otheryo Investmenty o Criteria
Chapteryo 6:yo Makingy o Investmentyo Decisionsy o withyo theyo Netyo Presentyo Valueyo Rule
Chapteryo7:yoIntroductionyotoyoRisk,yoDiversification,yoandyoPortfolioyoSelectiony
oChapteryo8:yoTheyoCapitalyoAssetyoPricingyoModel
Chapteryo 9:y o Risky o andy o they o Costy o ofy o Capital
Chapteryo 10:yo Projectyo Analysis
Chapteryo 11:yo Howyo toyo Ensureyo Thatyo Projectsyo Trulyyo Havey o PositiveNPVs
Chapteryo12:yoEfficientyoMarketsyoandyoBehavioralyoFinan
ceyoChapteryo13:yoAnyoOverviewyoofyoCorporateyoFinancin
gyoChapteryo14:yoHowyoCorporationsyoIssueyoSecurities
Chapteryo 15:yo Payoutyo Policy
Chapteryo 16:yo Doesyo Debtyo Policyyo Matter?
Chapteryo17:yoHowyoMuchyoShouldyoayoCorporationyoBorr
ow?yoChapteryo18:yoFinancingyoandyoValuation
Chapteryo19:yoAgencyyoProblemsyoandyoCorporateyoGovernancey
oChapteryo20:yoStakeholderyoCapitalismyoandyoResponsible yoBusi
ness
Chapteryo21:yoUnderstandingyoOptio
nsyoChapteryo22:yoValuingyoOptionsyo
Chapteryo23:yoRealyoOptions
Chapteryo24:yoCredityoRiskyoandyotheyoValueyoofyoCorporateyoDebt
yoChapteryo25:yoTheyoManyyoDifferentyoKindsyoof yoDebt
Chapteryo 26:yo Leasing
Chapteryo27:yo Managingyo Risk
Chapteryo 28:yo Internationalyo Financialyo Management
Chapteryo29:yoFinancialyoAnalysisyoC
hapteryo30:yoFinancialyoPlanning
Chapteryo 31:yoWorkingyo Capitalyo Management
Chapteryo 32:yo Mergers
Chapteryo33:yo CorporateyoRestructuring
,Chapteryo 34:yo Conclusion:yo Whatyo Weyo Doyo andyo Doyo Noty o Knowy o aboutyo Finance
CHAPTERyo 1
Introductiony o toy o Corporatey o Finance
Theyovaluesy o showny o iny o theyosolutionsy o mayy o bey o roundedy o forDdisplayDpurposes.y o However,y o they
o answersy o wereyoderivedy o usingy o ayospreadsheety o withoutyoanyy o intermediatey o rounding.
Answersy o toy o Problemy o Sets
1. a. real
b. executivey o airplanes
c. brandy o names
d. financial
e. bonds
*f. investmenty o ory o capitaly o expenditure
*g. capitaly o budgetingy o ory o investment
h. financing
*Notey o thaty o fy o andy o gy o arey o interchangeabley o iny o they o question.
Esty o time:y o 01-05
2. Ayotrademark,yoayofactory,youndevelopedyoland,y o andy o youry o worky o forceyo(c,yod,yoe,yoandy o g)y
oarey o ally o realyoayossets.y o Realy o assetsy o arey o identifiabley o asy o itemsy o withy o intrinsicy o value
.y o They o othersy o iny o they o listy o arey o finayoncialy o assets,yothaty o is,y o thesey o assetsy o derivey o
valuey o becausey o ofy o ay o contractualy o claim.
Esty o time:y o 01-05
3. a.
Financialyoassets,yosuchyoasyostocksyooryobankyoloans,yoareyoclaimsyoheldyobyyoi
nvestors.yoCorporationsy o selly o financialy o assetsy o toy o raisey o they o cashy o toy o inves
ty o iny o realy o assetsy o suchy o ayosy o plantyoandy o equipment.y o Somey o realy o assetsy
o arey o intangible.
b. Capitaly o expenditurey o meansy o investmenty o iny o realy o assets.y o Financingy o means
y o raisingy o theyocashyofory o thisy o investment.
, c. They o sharesy o ofDpublicy o corporationsy o arey o tradedy o ony o stocky o exchangesy o andy o
cany o bey o purchyoasedyobyy o ay o widey o rangey o ofy o investors.y o They o sharesy o ofy o cl
oselyy o heldy o corporationsy o arey o notyopubliclyy o tradedy o andy o arey o heldy o byy o ay o
smally o groupy o ofy o privatey o investors.
d. Unlimitedy o liability:y o Investorsy o arey o responsibley o fory o ally o they o firm‘sy o debts.y o AD
soley o proprietoyoryohasyounlimitedyoliability.yoInvestorsyoinyocorporationsyohaveyolimitedy
oliability.yoTheyyocanyoloseyotheiry o investment,y o buty o noy o more.
Esty o time:y o 01-05
Principles Of Corporate Finance
14th Edition By Richard Brealey, Stewart Myers,
ALL Chapters (1 - 34)
, TABLE OF CONTENTS
D D
Chapteryo1:yoIntroductionyotoyoCorporateyoFina
nceyoChapteryo2:yoHowyotoyoCalculateyoPresent
yoValuesyoChapteryo3:yoValuingyoBonds
Chapteryo 4:yo Valuingyo Stocks
Chapteryo 5:yo Nety o Presentyo Valueyo andy o Otheryo Investmenty o Criteria
Chapteryo 6:yo Makingy o Investmentyo Decisionsy o withyo theyo Netyo Presentyo Valueyo Rule
Chapteryo7:yoIntroductionyotoyoRisk,yoDiversification,yoandyoPortfolioyoSelectiony
oChapteryo8:yoTheyoCapitalyoAssetyoPricingyoModel
Chapteryo 9:y o Risky o andy o they o Costy o ofy o Capital
Chapteryo 10:yo Projectyo Analysis
Chapteryo 11:yo Howyo toyo Ensureyo Thatyo Projectsyo Trulyyo Havey o PositiveNPVs
Chapteryo12:yoEfficientyoMarketsyoandyoBehavioralyoFinan
ceyoChapteryo13:yoAnyoOverviewyoofyoCorporateyoFinancin
gyoChapteryo14:yoHowyoCorporationsyoIssueyoSecurities
Chapteryo 15:yo Payoutyo Policy
Chapteryo 16:yo Doesyo Debtyo Policyyo Matter?
Chapteryo17:yoHowyoMuchyoShouldyoayoCorporationyoBorr
ow?yoChapteryo18:yoFinancingyoandyoValuation
Chapteryo19:yoAgencyyoProblemsyoandyoCorporateyoGovernancey
oChapteryo20:yoStakeholderyoCapitalismyoandyoResponsible yoBusi
ness
Chapteryo21:yoUnderstandingyoOptio
nsyoChapteryo22:yoValuingyoOptionsyo
Chapteryo23:yoRealyoOptions
Chapteryo24:yoCredityoRiskyoandyotheyoValueyoofyoCorporateyoDebt
yoChapteryo25:yoTheyoManyyoDifferentyoKindsyoof yoDebt
Chapteryo 26:yo Leasing
Chapteryo27:yo Managingyo Risk
Chapteryo 28:yo Internationalyo Financialyo Management
Chapteryo29:yoFinancialyoAnalysisyoC
hapteryo30:yoFinancialyoPlanning
Chapteryo 31:yoWorkingyo Capitalyo Management
Chapteryo 32:yo Mergers
Chapteryo33:yo CorporateyoRestructuring
,Chapteryo 34:yo Conclusion:yo Whatyo Weyo Doyo andyo Doyo Noty o Knowy o aboutyo Finance
CHAPTERyo 1
Introductiony o toy o Corporatey o Finance
Theyovaluesy o showny o iny o theyosolutionsy o mayy o bey o roundedy o forDdisplayDpurposes.y o However,y o they
o answersy o wereyoderivedy o usingy o ayospreadsheety o withoutyoanyy o intermediatey o rounding.
Answersy o toy o Problemy o Sets
1. a. real
b. executivey o airplanes
c. brandy o names
d. financial
e. bonds
*f. investmenty o ory o capitaly o expenditure
*g. capitaly o budgetingy o ory o investment
h. financing
*Notey o thaty o fy o andy o gy o arey o interchangeabley o iny o they o question.
Esty o time:y o 01-05
2. Ayotrademark,yoayofactory,youndevelopedyoland,y o andy o youry o worky o forceyo(c,yod,yoe,yoandy o g)y
oarey o ally o realyoayossets.y o Realy o assetsy o arey o identifiabley o asy o itemsy o withy o intrinsicy o value
.y o They o othersy o iny o they o listy o arey o finayoncialy o assets,yothaty o is,y o thesey o assetsy o derivey o
valuey o becausey o ofy o ay o contractualy o claim.
Esty o time:y o 01-05
3. a.
Financialyoassets,yosuchyoasyostocksyooryobankyoloans,yoareyoclaimsyoheldyobyyoi
nvestors.yoCorporationsy o selly o financialy o assetsy o toy o raisey o they o cashy o toy o inves
ty o iny o realy o assetsy o suchy o ayosy o plantyoandy o equipment.y o Somey o realy o assetsy
o arey o intangible.
b. Capitaly o expenditurey o meansy o investmenty o iny o realy o assets.y o Financingy o means
y o raisingy o theyocashyofory o thisy o investment.
, c. They o sharesy o ofDpublicy o corporationsy o arey o tradedy o ony o stocky o exchangesy o andy o
cany o bey o purchyoasedyobyy o ay o widey o rangey o ofy o investors.y o They o sharesy o ofy o cl
oselyy o heldy o corporationsy o arey o notyopubliclyy o tradedy o andy o arey o heldy o byy o ay o
smally o groupy o ofy o privatey o investors.
d. Unlimitedy o liability:y o Investorsy o arey o responsibley o fory o ally o they o firm‘sy o debts.y o AD
soley o proprietoyoryohasyounlimitedyoliability.yoInvestorsyoinyocorporationsyohaveyolimitedy
oliability.yoTheyyocanyoloseyotheiry o investment,y o buty o noy o more.
Esty o time:y o 01-05
