EBK CORPORATE FINANCE4th EditionDeMarzo Publisher: PEARSONISBN: 8220103145947
EBK CORPORATE FINANCE
Solutions for EBK CORPORATE FINANCE
Problem 1P:
You have just taken out a five-year loan from a bank to buy an engagement ring. The ring costs 5000....Problem 3P:
Calculate the future value of 2000 in a. Five years at an interest rate of 5% per year. b. Ten years...Problem 5P:
Your brother has offered to give you either 5000 today or 10,000 in 10 years. If the interest rate...Problem 8P:
Your daughters currently eight years old. You anticipate that she will be going to college in10...Problem 11P:
Suppose you receive 100 at the end of each year for the next three years. a. If the interest rate is...Problem 12P:
You have just received a windfall from an investment you made in a friend's business. He will be...Problem 13P:
You have a loan outstanding. It requires making three annual payments at the end of the next three...Problem 14P:
You have been offered a unique investment opportunity. If you invest 10,000 today, you will receive...Problem 18P:
The British government has a consol bond outstanding paying 100 per year forever. Assume the current...Problem 19P:
What is the present value of 1000 paid at the end of each of the next 100 years if the interest rate...Problem 20P:
You are head of the Schwartz Family Endowment for the Arts. You have decided to fund an arts school...Problem 21P:
When you purchased your house, you took out a 30-year annual-payment mortgage with an interest rate...Problem 23P:
Your grandmother has been putting 1000 into a savings account on every birthday since your first...Problem 24P:
A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and...Problem 26P:
You work for a pharmaceutical company that has developed a new drug. The patent on the drug will...Problem 27P:
Your oldest daughter is about to start kindergarten at a private school. Tuition is 10,000 per year,...Problem 28P:
A rich aunt has promised you 5000 one year from today. In addition, each year after that, she has...Problem 29P:
You are running a hot Internet company. Analysts predict that its earnings will grow at 30% per year...Problem 33P:
Your firm spends 5000 every month on printing and mailing costs, sending statements to customers. If...Problem 34P:
You have just entered an MBA program and have decided to pay for your living expenses using a credit...Problem 35P:
Your credit card charges an interest rate of 2% per month. You have a current balance of 1000, and...Problem 36P:
You have decided to buy a perpetuity. The bond makes one payment at the end of every year forever...Problem 37P:
You are thinking of purchasing a house. The house costs 350,000. You have 50,000 in cash that you...Problem 38P:
You would like to buy the house and take the mortgage described in Problem 37. You can afford to pay...Problem 39P:
You have just made an offer on a new home and are seeking a mortgage. You need to borrow 600,000. a....Problem 42P:
You are saving for retirement. To live comfortably, you decide you will need to save 2 million by...Browse All Chapters of This Textbook
Chapter 1 - The CorporationChapter 1.1 - The Four Types Of FirmsChapter 1.2 - Ownership Versus Control Of CorporationsChapter 1.3 - The Stock MarketChapter 2 - Introduction To Financial Statement AnalysisChapter 2.1 - Firms' Disclosure Of Financial InformationChapter 2.2 - The Balance SheetChapter 2.3 - The Income StatementChapter 2.4 - The Statement Of Cash FlowsChapter 2.5 - Other Financial Statement Information
Chapter 2.6 - Financial Statement AnalysisChapter 2.7 - Financial Reporting In PracticeChapter 3 - Financial Decision Making And The Law Of One PriceChapter 3.1 - Valuing DecisionsChapter 3.2 - Interest Rates And The Time Value Of MoneyChapter 3.3 - Present Value And The Npv Decision RuleChapter 3.4 - Arbitrage And The Law Of One PriceChapter 3.5 - No-Arbitrage And Security PricesChapter 3.A - The Price Of RiskChapter 3.A2 - Applying The Valuation PrincipleChapter 3.A3 - Comparing Costs At Different Points In TimeChapter 4 - The Time Value Of MoneyChapter 4.1 - The TimelineChapter 4.2 - The Three Rules Of Time TravelChapter 4.3 - Valuing A Stream Of Cash FlowsChapter 4.4 - Calculating The Net Present ValueChapter 4.5 - Perpetuities And AnnuitiesChapter 4.6 - Using An Annuity Spreadsheet Or CalculatorChapter 4.7 - Non-Annual Cash FlowsChapter 4.8 - Solving For The Cash PaymentsChapter 4.9 - The Internal Rate Of ReturnChapter 4.A - Solving For The Number Of PeriodsChapter 5 - Interest RatesChapter 5.1 - Interest Rate Quotes And AdjustmentsChapter 5.2 - Application: Discount Rates And LoansChapter 5.3 - The Determinants Of Interest RatesChapter 5.4 - Risk And TaxesChapter 5.5 - The Opportunity Cost Of CapitalChapter 6 - Valuing BondsChapter 6.1 - Bond Cash Flows, Prices, And YieldsChapter 6.2 - Dynamic Behavior Of Bond PricesChapter 6.3 - The Yield Curve And Bond ArbitrageChapter 6.4 - Corporate BondsChapter 6.5 - Sovereign BondsChapter 7 - Investment Decision RulesChapter 7.1 - Npv And Stand-Alone ProjectsChapter 7.2 - The Internal Rate Of Return RuleChapter 7.3 - The Payback RuleChapter 7.4 - Choosing Between ProjectsChapter 7.5 - Project Selection With Resource ConstraintsChapter 8 - Fundamentals Of Capital BudgetingChapter 8.1 - Forecasting EarningsChapter 8.2 - Determining Free Cash Flow And NpvChapter 8.3 - Choosing Among AlternativesChapter 8.4 - Further Adjustments To Free Cash FlowChapter 8.5 - Analyzing The ProjectChapter 9 - Valuing StocksChapter 9.1 - The Dividend-Discount ModelChapter 9.2 - Applying The Dividend-Discount ModelChapter 9.3 - Total Payout And Free Cash Flow ValuationChapter 9.4 - Valuation Based On Comparable FirmsChapter 9.5 - Information, Competition, And Stock PricesChapter 10 - Capital Markets And The Pricing Of RiskChapter 10.1 - Risk And Return: Insights From 89 Years Of Investor HistoryChapter 10.2 - Common Measures Of Risk And ReturnChapter 10.3 - Historical Returns Of Stocks And BondsChapter 10.4 - The Historical Trade-Off Between Risk And ReturnChapter 10.5 - Common Versus Independent RiskChapter 10.6 - Diversification In Stock PortfoliosChapter 10.7 - Measuring Systematic RiskChapter 10.8 - Beta And The Cost Of CapitalChapter 11 - Optimal Portfolio Choice And Capital Asset Pricing ModelChapter 11.1 - The Expected Return Of A PortfolioChapter 11.2 - The Volatility Of A Two Stock PortfolioChapter 11.3 - The Volatility Of A Large PortfolioChapter 11.4 - Risk Versus return: Choosing An Efficient PortfolioChapter 11.5 - Risk-free Saving And BorrowingChapter 11.6 - The Efficient Portfolio And Required ReturnsChapter 11.7 - The Capital Asset Pricing ModelChapter 11.8 - Determining The Risk PremiumChapter 12 - Estimating The Cost Of CapitalChapter 12.1 - The Equity Cost Of CapitalChapter 12.2 - The Market PortfolioChapter 12.3 - Beta EstimationChapter 12.4 - The Debt Cost Of CapitalChapter 12.5 - A project's Cost Of CapitalChapter 12.6 - Project Risk Characteristics And FinancingChapter 12.7 - Final Thoughts On Using The CapmChapter 13 - Investor Behavior And Capital Market EfficiencyChapter 13.1 - Competition And Capital MarketsChapter 13.2 - Information And Rational ExpectationsChapter 13.3 - The Behavior Of Individual InvestorsChapter 13.4 - Systematic Trading BiasesChapter 13.5 - The Efficiency Of The Market PortfolioChapter 13.6 - Style-based Techniques And Market Efficiency DebateChapter 13.7 - Multifactor Models Of RiskChapter 13.8 - Methods Used In PracticeChapter 14 - Capital Structure In A Perfect MarketChapter 14.1 - Equity Versus Debt FinancingChapter 14.2 - Modigliani-Miller: Leverage, Arbitrage, And Firm ValueChapter 14.3 - Modigliani-Miller: Leverage, Risk, And Cost Of CapitalChapter 14.4 - Capital Structure FallaciesChapter 14.5 - MM: Beyond The PropositionsChapter 15 - Debt And TaxesChapter 15.1 - The Interest Tax DeductionChapter 15.2 - Valuing The Interest Tax ShieldChapter 15.3 - Recapitalizing To Capture The Tax ShieldChapter 15.4 - Personal TaxesChapter 15.5 - Optimal Capital Structure With TaxesChapter 16 - Financial Distress, Managerial Incentives, And InformationChapter 16.1 - Default And Bankruptcy In A Perfect MarketChapter 16.2 - The Costs Of Bankruptcy And Financial DistressChapter 16.3 - Financial Distress Costs And Firm ValueChapter 16.4 - Optimal Capital Structure: The Trade-Off TheoryChapter 16.5 - Exploiting Debt Holders: The Agency Costs Of LeverageChapter 16.6 - Motivating Managers: The Agency Benefits Of LeverageChapter 16.7 - Agency Costs And The Trade-Off TheoryChapter 16.8 - Asymmetric Information And Capital StructureChapter 16.9 - Capital Structure: The Bottom LineChapter 17 - Payout PolicyChapter 17.1 - Distributions To ShareholdersChapter 17.2 - Comparison Of Dividends And Share RepurchasesChapter 17.3 - The Tax Disadvantage Of DividendsChapter 17.4 - Dividend Capture And Tax ClientelesChapter 17.5 - Payout Versus Retention Of CashChapter 17.6 - Signaling With Payout PolicyChapter 17.7 - Stock Dividends, Splits, And Spin-OffsChapter 18 - Capital Budgeting And Valuation With LeverageChapter 18.1 - Overview Of Key ConceptsChapter 18.2 - The Weighted Average Cost Of CapitalChapter 18.3 - The Adjusted Present Value MethodChapter 18.4 - The Flow-to-Equity MethodChapter 18.5 - Project-Based Costs Of CapitalChapter 18.6 - Apv With Other Leverage PoliciesChapter 18.7 - Other Effects Of FinancingChapter 18.8 - Advanced Topics In Capital BudgetingChapter 19 - Valuation And Financial modeling: A Case StudyChapter 19.1 - Valuation Using ComparablesChapter 19.2 - The Business PlanChapter 19.3 - Building The Financial ModelChapter 19.4 - Estimating The Cost Of CapitalChapter 19.5 - Valuing The InvestmentChapter 19.6 - Sensitivity AnalysisChapter 20 - Financial OptionsChapter 20.1 - Option BasicsChapter 20.2 - Option Payoffs At ExpirationChapter 20.3 - Put-Call ParityChapter 20.4 - Factors Affecting Option PricesChapter 20.5 - Exercising Options EarlyChapter 20.6 - Options And Corporate FinanceChapter 21 - Option ValuationChapter 21.1 - The Binomial Option Pricing ModelChapter 21.2 - The Black-Scholes Option Pricing ModelChapter 21.3 - Risk-Neutral ProbabilitiesChapter 21.4 - Risk And Return Of An OptionChapter 21.5 - Corporate Applications Of Option PricingChapter 22 - Real OptionsChapter 22.1 - Real Versus Financial OptionsChapter 22.2 - Decision Tree AnalysisChapter 22.3 - The Option To Delay: Investment As A Call OptionChapter 22.4 - Growth And Abandonment OptionsChapter 22.5 - Investments With Different LivesChapter 22.6 - Optimally Staging InvestmentsChapter 22.7 - Rules Of ThumbChapter 23 - Raising Equity CapitalChapter 23.1 - Equity Financing For Private CompaniesChapter 23.2 - The Initial Public OfferingChapter 23.3 - Ipo PuzzlesChapter 23.4 - The Seasoned Equity OfferingChapter 24 - Debt FinancingChapter 24.1 - Corporate DebtChapter 24.2 - Other Types Of DebtChapter 24.3 - Bond CovenantsChapter 24.4 - Repayment ProvisionsChapter 25 - LeasingChapter 25.1 - The Basics Of LeasingChapter 25.2 - Accounting, Tax, And Legal Consequences Of LeasingChapter 25.3 - The Leasing DecisionChapter 25.4 - Reasons For LeasingChapter 26 - Working Capital ManagementChapter 26.1 - Overview Of Working CapitalChapter 26.2 - Trade CreditChapter 26.3 - Receivables ManagementChapter 26.4 - Payables ManagementChapter 26.5 - Inventory ManagementChapter 26.6 - Cash ManagementChapter 27 - Short-Term Financial PlanningChapter 27.1 - Forecasting Short-Term Financing NeedsChapter 27.2 - The Matching PrincipleChapter 27.3 - Short-Term Financing With Bank LoansChapter 27.4 - Short-Term Financing With Commercial PaperChapter 27.5 - Short-Term Financing With Secured FinancingChapter 28 - Mergers And AcquisitionsChapter 28.1 - Background And Historical TrendsChapter 28.2 - Market Reaction To A TakeoverChapter 28.3 - Reasons To AcquireChapter 28.4 - Valuation And Takeover ProcessChapter 28.5 - Takeover DefensesChapter 28.6 - Who Gets The Value Added From A Takeover?Chapter 29 - Corporate GovernanceChapter 29.1 - Corporate Governance And Agency CostsChapter 29.2 - Monitoring By The Board Of Directors And OthersChapter 29.3 - Compensation PoliciesChapter 29.4 - Managing Agency ConflictChapter 29.5 - RegulationChapter 29.6 - Corporate Governance Around The WorldChapter 30 - Risk ManagementChapter 30.1 - InsuranceChapter 30.2 - Commodity Price RiskChapter 30.3 - Exchange Rate RiskChapter 30.4 - Interest Rate RiskChapter 31 - International Corporate FinanceChapter 31.1 - Internationally Integrated Capital MarketsChapter 31.2 - Valuation Of Foreign Currency Cash FlowsChapter 31.3 - Valuation And International TaxationChapter 31.4 - Internationally Segmented Capital MarketsChapter 31.5 - Capital Budgeting With Exchange Risk
Book Details
For MBA/graduate students taking a course in corporate finance. An Emphasis on Core Financial Principles to Elevate Individuals’ Financial Decision Making Using the unifying valuation framework based on the Law of One Price, top researchers Jonathan Ber
Sample Solutions for this Textbook
We offer sample solutions for EBK CORPORATE FINANCE homework problems. See examples below:
The important differences between a corporation and an organization are as follows: The significant...Explanation: Balance sheet shows the detailed information about a company’s assets, liabilities and...Chapter 3, Problem 1PChapter 4, Problem 1PChapter 5, Problem 1PChapter 6, Problem 1PChapter 7, Problem 1PChapter 8, Problem 1PChapter 9, Problem 1P
Chapter 10, Problem 1PChapter 11, Problem 1PExplanation: Given information: Company P’s stock has a beta of 0.57. The risk-free rate is 3...Chapter 13, Problem 1PChapter 14, Problem 1PExplanation: Given information: P Pharmaceuticals has EBIT of $325 million in 2006; it has interest...Chapter 16, Problem 1PGiven information: The firm satisfies its entire interest obligation. Explanation: The firm can use...Explanation: Given information: Company C considers initiation of a new version of Armour, all...Explanation: Given information: The current sales are $75 million. Refer to Table 19.2 in Problem 1...Chapter 20, Problem 1PChapter 21, Problem 1PChapter 22, Problem 1PExplanation: The alternative sources from which private companies can raise equity capital are as...Chapter 24, Problem 1PChapter 25, Problem 1PExplanation: Operating cycle determines the average length of time taken from the initial cash to...Given information: The given companies: a) A clothing retailer, b) A professional sports team, c) An...Chapter 28, Problem 1PExplanation: The corporation is a legal entity who separates the ownership and management...Chapter 30, Problem 1PChapter 31, Problem 1P
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Corporate Finance: The Core (4th Edition) (Berk, DeMarzo & Harford, The Corporate Finance Series)
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