Principles of Corporate Finance Brealey 11th Edition Test Bank

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Product details:

• ISBN-10 ‏ : ‎ 0078034760
• ISBN-13 ‏ : ‎ 978-0078034763
• Author: Richard Brealey (Author), Stewart Myers (Author), Franklin Allen (Author)

The integrated solutions for Brealey’s Principles of Corporate Finance have been specifically designed to help improve student performance, meaning that students are prepared for class and can successfully solve problems and analyse the results. Resources within Connect Finance provide unlimited opportunities for students to practice solving financial problems and apply what they’ve learned. Brealey’s world-leading content showing managers how to use financial theory to solve practical problems combined with a complete digital solution will help students achieve higher outcomes in the course.

Connect is the only integrated learning system that empowers students by continuously adapting to deliver precisely what they need, when they need it, and how they need it, so that your class time is more engaging and effective.

Table of contents:

C h a p t e r 1
FINANCE AND THE FINANCIAL MANAGER 4 
1.1 What Is a Corporation? 5 
1.2 The Role of the Financial Manager 6 
1.3 Who Is the Financial Manager? 8 
1.4 Separation of Ownership and Management 9 
1.5 Topics Covered in this Book 11 
Summary 12 
Further Reading 12 
Concept Review Questions 13 
Quiz 13 
C h a p t e r 2
PRESENT VALUES, THE OBJECTIVES OF THE FIRM, 
AND CORPORATE GOVERNANCE 14 
2.1 Introduction to Present Value 15
Calculating Future and Present Value / Net Present 
Value / Risk and Present Value / Present Values and 
Rates of Return / The Opportunity Cost of Capital / A 
Source of Confusion 
2.2 Foundations of the Net Present Value Rule 20
How Capital Markets Reconcile Preferences for Current 
vs. Future Consumption / A Fundamental Result / Other 
Corporate Goals 
2.3 Corporate Goals and Corporate Governance 25
Should Managers Look after the Interests of 
Shareholders? / Should Firms Be Managed for 
Shareholders or All Stakeholders?
Summary 28 
Further Reading 30 
Concept Review Questions 30 
Quiz 30 
Practice Questions 31 
Challenge Questions 32 
 
 
 C h a p t e r 3 
HOW TO CALCULATE PRESENT VALUES 34 
3.1 Valuing Long-Lived Assets 35
Valuing Cash Flows in Several Periods / Why the 
Discount Factor Declines As Futurity Increases? 
And a Digression on Money Machines / Calculating 
PVs and NPVs 
3.2 Looking for Shortcuts?Perpetuities and 
Annuities 39 
How to Value Growing Perpetuities / How to Value 
Annuities 
3.3 Compound Interest and Present Values 44
A Note on Compounding Intervals / Continuous 
Compounding 
3.4 Nominal and Real Rates of Interest 49 
Summary 50 
Web Exercises 51 
Concept Review Questions 52 
Quiz 52 
Practice Questions 53 
Challenge Questions 55 
C h a p t e r 4
THE VALUE OF BONDS AND COMMON STOCKS 56 
4.1 Using Present Value Formulas 
to Value Bonds 57 
A Short Trip to Germany to Value a Government Bond / 
What Happens When Interest Rates Change? / Back in 
the United States: Semiannual Coupons and Bond Prices 
4.2 How Common Stocks Are Traded 60 
4.3 How Common Stocks Are Valued 61
Today?s Price / But What Determines Next Year?s Price? 
4.4 Estimating the Cost of Equity Capital 65
Using the DCF Model to Set Gas and Electricity Prices / 
Some Warnings about Constant-Growth Formulas / DCF 
Valuation with Varying Growth Rates 
4.5 The Link between Stock Price and Earnings per 
Share 72 
Calculating the Present Value of Growth Opportunities 
for Fledgling Electronics / Some Examples of Growth 
Opportunities?
Summary 76 
Further Reading 77 
Concept Review Questions 78 
Quiz 78 
Practice Questions 79 
Challenge Questions 81 
Mini-case: Reeby Sports 82 
C h a p t e r 5
 WHY NET PRESENT VALUE LEADS 
TO BETTER INVESTMENT DECISIONS THAN 
OTHER CRITERIA 84 
5.1 A Review of the Basics 85
Net Present Value?s Competitors / Three Points to 
Remember about NPV / NPV Depends on Cash Flow, 
Not on Book Returns 
5.2 Payback 89
The Payback Rule 
5.3 Internal (or Discounted-Cash-Flow) Rate 
of Return 91 
Calculating the IRR / The IRR Rule / Pitfall 1?Lending 
or Borrowing? / Pitfall 2?Multiple Rates of Return / 
Pitfall 3?Mutually Exclusive Projects / Pitfall 4?What 
Happens When We Can?t Finesse the Term Structure of 
Interest Rates? / The Verdict on IRR 
5.4 Choosing Capital Investments When Resources 
Are Limited 100 
An Easy Problem in Capital Rationing / Uses of Capital 
Rationing Models 
Summary 103 
Further Reading 104 
Concept Review Questions 105 
Quiz 105 
Practice Questions 106 
Challenge Questions 108 
Mini-case: Vegetron?s CFO Calls Again 109

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