Garantie de satisfaction à 100% Disponible immédiatement après paiement En ligne et en PDF Tu n'es attaché à rien
logo-home
Solution Manual for Principles of Corporate Finance 14th Edition by Richard Brealey, Stewart Myers, Franklin Allen and Alex Edmans €14,20
Ajouter au panier

Examen

Solution Manual for Principles of Corporate Finance 14th Edition by Richard Brealey, Stewart Myers, Franklin Allen and Alex Edmans

 30 vues  0 fois vendu
  • Cours
  • Établissement
  • Book

Solution Manual for Principles of Corporate Finance 14th Edition by Richard Brealey, Stewart Myers, Franklin Allen and Alex Edmans

Aperçu 4 sur 748  pages

  • 13 décembre 2024
  • 748
  • 2024/2025
  • Examen
  • Questions et réponses
avatar-seller
CHAPTER 1 t




Introduction to Corporate Finance t t t




The values shown in the solutions may be rounded for display purposes. However, the answers
t t t t t t t t t t t t t t t


werederived using a spreadsheet without any intermediate rounding.
t t t t t t t t




Answers to Problem Sets t t t




1. a. real

b. executive airplanes t




c. brand names t




d. financial

e. bonds

*f. investment or capital expenditure t t t




*g. capital budgeting or investment t t t




h. financing
*Note that f and g are interchangeable in the question.
t t t t t t t t t

Est time: 01-05
t t




2. A trademark, a factory, undeveloped land, and your work force (c, d, e, and g) are
t t t t t t t t t t t t t t t


all real assets. Real assets are identifiable as items with intrinsic value. The others in
t t t t t t t t t t t t t t t


the list are financial assets,that is, these assets derive value because of a contractu
t t t t t t t t t t t t t t t


al claim. t

Est time: 01-05
t t




3. a.
Financial assets, such as stocks or bank loans, are claims held by inves
t t t t t t t t t t t t


tors. Corporations sell financial assets to raise the cash to invest in real ass
t t t t t t t t t t t t t



© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

, ets such as plantand equipment. Some real assets are intangible.
t t t t t t t t t t




b. Capital expenditure means investment in real assets. Financing means rais
t t t t t t t t t


ing the cashfor this investment.
t t t t t




c. The shares of public corporations are traded on stock exchanges and can
t t t t t t t t t t t t


be purchasedby a wide range of investors. The shares of closely held corp
t t t t t t t t t t t t t


orations are not publicly traded and are held by a small group of private i
t t t t t t t t t t t t t t


nvestors.

d. Unlimited liability: Investors are responsible for all the firm‘s debts. A sole
t t t t t t t t t t t t


proprietor hasunlimited liability. Investors in corporations have limited lia
t t t t t t t t t


bility. They can lose their investment, but no more.
t t t t t t t t

Est time: 01-05
t t




© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

,4. Items c and d apply to corporations. Because corporations have perpetual life, ow
t t t t t t t t t t t t


nership can betransferred without affecting operations, and managers can be fir
t t t t t t t t t t t


ed with no effect on ownership. Other forms of business may have unlimited liabilit
t t t t t t t t t t t t t


y and limited life.
t t t

Est time: 01-05
t t




5. Separation of ownership facilitates the key attributes of a corporation, including l
t t t t t t t t t t t


imited liability forinvestors, transferability of ownership, a separate legal person
t t t t t t t t t t


ality of the corporation, and delegated centralized management. These four attri
t t t t t t t t t t


butes provide substantial benefit for investors, including the ability to diversify th
t t t t t t t t t t t


eir investment among many uncorrelated returns—
t t t t t


a very valuable tool explored in later chapters. Also, these attributes allow invest
t t t t t t t t t t t t


ors to quickly exit,enter, or short sell an investment, thereby generating an active li
t t t t t t t t t t t t t t


quid market for corporations.
t t t




However, these positive aspects also introduce substantial negative externalities
t t t t t t t t t


as well. The separation of ownership from management typically leads to agency
t t t t t t t t t t t t


problems, where managersprefer to consume private perks or make other decisio
t t t t t t t t t t t


ns for their private benefit—
t t t t


rather than maximize shareholder wealth. Shareholders tend to exercise less over
t t t t t t t t t t


sight of each individual investment as their diversification increases. Finally, the cor
t t t t t t t t t t t


poration‘s separate legal personalitymakes it difficult to enforce accountability if
t t t t t t t t t t t


they externalize costs onto society.
t t t t

Est time: 01-05
t t




6. Shareholders will only vote to maximize shareholder wealth. Shareholders ca t t t t t t t t t


n modify their pattern of consumption through borrowing and lending, match ri
t t t t t t t t t t t


sk preferences, and hopefullybalance their own checkbooks (or hire a qualifie
t t t t t t t t t t t


d professional to help them with these tasks).
t t t t t t t

Est time: 01-05
t t




7. If the investment increases the firm‘s wealth, it increases the firm‘s share value. M
t t t t t t t t t t t t t


s. Espinozacould then sell some or all these more valuable shares to provide for h
t t t t t t t t t t t t t t t


er retirement income.
t t


Est time: 01-05
t t




8. a.
Assuming that the encabulator market is risky, an 8% ex t t t t t t t t t

© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

, pected return onthe F&H encabulator investments may be inf
t t t t t t t t t


erior to a 4% return on U.S.
t t t t t t


government securities, depending on the relative risk between the two assets.
t t t t t t t t t t




b.
Unless the financial assets are as safe as U.S. government securities, the
t t t t t t t t t t t


ir cost of capitalwould be higher. The CFO could consider expected returns
t t t t t t t t t t t t t


on assets with similar risk. t t t t

Est time: 06-10
t t




9. Managers would act in shareholders‘ interests because they have a legal duty to a
t t t t t t t t t t t t t


ct in their interests. Managers may also receive compensation—
t t t t t t t t


bonuses, stock, and option payouts with value tied (roughly) to firm performance.
t t t t t t t t t t t t t


Managers may fear personal reputational damage from not acting in shareholde
t t t t t t t t t t


rs‘ interests. And managers can be fired by the board of directors (electedby share
t t t t t t t t t t t t t t


holders). If managers still fail to act in shareholders‘ interests, shareholders may se
t t t t t t t t t t t t


ll their shares, lowering the stock price and potentially creating the possibility of a t
t t t t t t t t t t t t t t


akeover, which can again lead to changes in the board of directors and senior man
t t t t t t t t t t t t t t


agement.
Est time: 01-05
t t




© McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.

Les avantages d'acheter des résumés chez Stuvia:

Qualité garantie par les avis des clients

Qualité garantie par les avis des clients

Les clients de Stuvia ont évalués plus de 700 000 résumés. C'est comme ça que vous savez que vous achetez les meilleurs documents.

L’achat facile et rapide

L’achat facile et rapide

Vous pouvez payer rapidement avec iDeal, carte de crédit ou Stuvia-crédit pour les résumés. Il n'y a pas d'adhésion nécessaire.

Focus sur l’essentiel

Focus sur l’essentiel

Vos camarades écrivent eux-mêmes les notes d’étude, c’est pourquoi les documents sont toujours fiables et à jour. Cela garantit que vous arrivez rapidement au coeur du matériel.

Foire aux questions

Qu'est-ce que j'obtiens en achetant ce document ?

Vous obtenez un PDF, disponible immédiatement après votre achat. Le document acheté est accessible à tout moment, n'importe où et indéfiniment via votre profil.

Garantie de remboursement : comment ça marche ?

Notre garantie de satisfaction garantit que vous trouverez toujours un document d'étude qui vous convient. Vous remplissez un formulaire et notre équipe du service client s'occupe du reste.

Auprès de qui est-ce que j'achète ce résumé ?

Stuvia est une place de marché. Alors, vous n'achetez donc pas ce document chez nous, mais auprès du vendeur LectHumphrey. Stuvia facilite les paiements au vendeur.

Est-ce que j'aurai un abonnement?

Non, vous n'achetez ce résumé que pour €14,20. Vous n'êtes lié à rien après votre achat.

Peut-on faire confiance à Stuvia ?

4.6 étoiles sur Google & Trustpilot (+1000 avis)

52510 résumés ont été vendus ces 30 derniers jours

Fondée en 2010, la référence pour acheter des résumés depuis déjà 14 ans

Commencez à vendre!
€14,20
  • (0)
Ajouter au panier
Ajouté