Archives: Solution Manual
978-1337090582 Chapter 15 Solution Manual
Chapter 15 Dividend Policy CHAPTER 15 DIVIDEND POLICY ANSWERS TO QUESTIONS: 1. Legal constraints: • Capital cannot be impaired as a result of dividend payments. 2. a. The IRS code prohibits corporations from retaining an excessive amount of profits in […]
978-1337090582 Chapter 14 Solution Manual Part 3
Chapter 14 Capital Structure Management in Practice 20. a. EPS (Plan 1) = EPS (Plan 2) b. Plan 1 Plan 2 EBIT $6.0 $6.0 I 0 1.2 EBT $6.0 $4.8 T @ 40% 2.4 1.92 EAT $3.6 $2.88 Shares Outstanding […]
978-1337090582 Chapter 14 Solution Manual Part 2
Chapter 14 Capital Structure Management in Practice 12. Values in millions of dollars a. VC = 0.4($30) = $12 b. Interest = [(0.1 x $2) + (0.12 x $10)] = $1.4 DFL = $8/ [$8 – $1.4 – ($0.96/(1 – […]
978-1337090582 Chapter 14 Solution Manual Part 1
Chapter 14 Capital Structure Management in Practice CHAPTER 14 CAPITAL STRUCTURE MANAGEMENT IN PRACTICE ANSWERS TO QUESTIONS: 1. Leverage is the use of assets and liabilities with fixed costs in order to increase the returns to 2. a. Fixed costs […]
978-1337090582 Chapter 13 Solution Manual
Chapter 13 Capital Structure Concepts CHAPTER 13 CAPITAL STRUCTURE CONCEPTS ANSWERS TO QUESTIONS: 1. MM conclude that the value of a firm is independent of its capital structure in perfect capital 2. Without a corporate income tax (and without bankruptcy […]
978-1337090582 Chapter 12 Solution Manual Part 2
Chapter 12 Cost of Capital 14. wd = 40%; wp = 10%; we = 50% After-tax debt cost: $0-$50 million: 18%(1 – .4) = 10.8% After-tax cost of new equity: > $60 million $38.35 = $99.50(PVIFke,5) ke = 21% Size […]
978-1337090582 Chapter 12 Solution Manual Part 1
Chapter 12 Cost of Capital CHAPTER 12 COST OF CAPITAL ANSWERS TO QUESTIONS: 1. Retained earnings are an internally generated source of financing whereas other sources of 2. The retained earnings figure on a firm’s balance sheet represents the cumulative […]
978-1337090582 Chapter 11 Solution Manual Part 2
Chapter 11 Capital Budgeting and Risk 16. Expected value = $100,000; Most optimistic estimate = $175,000; A z value from Table V that leaves 10 percent in either tail is approximately z = 1.28, therefore z = 1.28 = $75,000 […]
978-1337090582 Chapter 11 Solution Manual Part 1
Chapter 11 Capital Budgeting and Risk CHAPTER 11 CAPITAL BUDGETING AND RISK ANSWERS TO QUESTIONS: 1. The net present value model handles risk by discounting expected cash flows from a project by the firm’s cost of capital. This discount rate […]
978-1337090582 Chapter 10 Solution Manual Part 2
14. a. Net investment: $80,000 Year Revenues Operating Costs Depreciation Tax OEAT NCF 1 $100,000 $50,000 $11,432 $15,427 $23,141 $34,573 2 107,000 54,000 19,592 13,363 20,045 39,637 3 114,490 58,320 13,992 16,871 25,307 39,299 4 122,504 62,986 9,992 19,810 29,716 […]
978-1337090582 Chapter 10 Solution Manual Part 1
Chapter 10 Capital Budgeting Decision Criteria and Real Option Considerations CHAPTER 10 CAPITAL BUDGETING DECISION CRITERIA AND REAL OPTION CONSIDERATIONS ANSWERS TO QUESTIONS: 1. The net present value method computes the present worth of a project’s benefits over its costs, […]
978-1337090582 Chapter 1 Solution Manual
Chapter 1 The Role and Objective of Financial Management CHAPTER 1 THE ROLE AND OBJECTIVE OF FINANCIAL MANAGEMENT ANSWERS TO QUESTIONS: 1. Shareholder wealth is defined as the present value of the expected future returns to the 2. Profit maximization […]
978-1337090582 Appendix Appendix 20B
Appendix 20B Bond Refunding Analysis APPENDIX 20B BOND REFUNDING ANALYSIS SOLUTION TO PROBLEMS: 1. Step A – Calculation of interest savings: Annual interest, old = ($150 million)(0.12)(1 – 0.40) = $10,800,000 Present value of interest savings = ($1,800,000)(PVIFA.06, 20) = […]
978-1337090582 Appendix Appendix 20A
Appendix 20A The Black-Scholes Option Pricing Model APPENDIX 20A THE BLACK-SCHOLES OPTION PRICING MODEL SOLUTIONS TO PROBLEMS: 1. Using the option price calculator at www.numa.com, the value of the option for Targezept is $3.101. 2. The results will depend on […]
978-1337090582 Appendix Appendix 10A
Appendix 10A Mutually Exclusive Investments Having Unequal Lives APPENDIX 10A MUTUALLY EXCLUSIVE INVESTMENTS HAVING UNEQUAL LIVES SOLUTIONS TO PROBLEMS: 1. a. NPVA = -$30,000 + $10,500(3.037) = $1,888.50 b. NPVA(chain) = $1,888.50 – $30,000(PVIF.12,4 ) + $10,500(PVIFA.12,4)(PVIF.12,4) = $3,089.59 c. […]
978-1337090582 Appendix Appendix 9A
Appendix 9A Taxes and Depreciation APPENDIX 9A DEPRECIATION ANSWER TO QUESTION: 1. MACRS depreciation would be preferred over straight-line depreciation because it results in the deferment of tax payments, which are a cash outflow. SOLUTIONS TO PROBLEMS: 1. a. Basis […]
978-1337090582 Appendix Appendix 5A
Appendix 5A Continuous Compounding and Discounting APPENDIX 5A CONTINUOUS COMPOUNDING AND DISCOUNTING SOLUTIONS TO PROBLEMS: 4. a. ieff = [1 + (inom/m)m] – 1 = [1 + 0.2/1]1 -1 = 0.2 or 20% b. ieff = [1 + 0.2/4]4 -1 […]
978-1337090582 Appendix Appendix 2A
Appendix 2A Federal Income Taxes APPENDIX 2A FEDERAL INCOME TAXES ANSWERS TO QUESTIONS: 1. The operating, or ordinary income of a corporation is the income that results from the firm’s normal business activities. Capital gains income basically occurs as a […]
978-1305769786 Chapter 9 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Productivity vs. Vacation Time ASK: Does less vacation time make the United States more or less competitive? The United States is the most productive country in the world. Some argue that this is because Americans […]
978-1305769786 Chapter 9 Lecture Note
CHAPTER 9 Reaching Global Markets TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a […]
978-1305769786 Chapter 8 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Self-Regulation Helps to Manage Supplier Diversity ASK: When corporations and institutions make a special effort to encourage supplier diversity, how should “diversity” be defined? Many large corporations encourage supplier diversity by reaching out to businesses […]
978-1305769786 Chapter 8 Lecture Note
CHAPTER 8 Business Markets and Buying Behavior TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whol e or in part, except for use as permitted in a license […]
978-1305769786 Chapter 7 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Consumer Buying Behavior and Social Classes To do this exercise which links consumer behavior tastes with various social strata, click on the hyperlink below to access a PBS game on consumer and class tastes. http://www.pbs.org/peoplelikeus/games/chintz.html […]
978-1305769786 Chapter 7 Lecture Note
CHAPTER 7 Consumer Buying Behavior TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a […]
978-1305769786 Chapter 6 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: How Many Markets? This exercise involves a series of questions. Ask the students to stand or remain standing if the statement is true for them. (1) Are you a University/College student? (2) Are you a […]
978-1305769786 Chapter 6 Lecture Note
CHAPTER 6 Target Markets: Segmentation and Evaluation TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed […]
978-1305769786 Chapter 5 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Sources of Data ASK: What is held every 10 years in the United States as required by the Constitution and yields crucial data for marketers? The answer is the U.S. Census. ASK: Why is it […]
978-1305769786 Chapter 5 Lecture Note
CHAPTER 5 Marketing Research and Information Systems TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed […]
978-1305769786 Chapter 4 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Corporate Social Responsibility Project The Pyramid of Corporate Social Responsibility (Figure 4.1) onto a screen. Ask students to talk about how firms like Altria (formerly Philip Morris) and Walmart do an excellent job of executing […]
978-1305769786 Chapter 4 Lecture Note
CHAPTER 4 Social Responsibility and Ethics in Marketing TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license […]
978-1305769786 Chapter 3 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Monopoly ASK: Have you ever heard anyone call Google a monopoly? Did you know that the company was declared a monopoly in France, where antitrust legislation tends to be stricter than in the United States? […]
978-1305769786 Chapter 3 Lecture Note
CHAPTER 3 The Marketing Environment TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a […]
978-1305769786 Chapter 20 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Psychological Pricing ASK: Student to read the following examples, and determine the type of psychological pricing used as the pricing strategy. 1. Customers are so used to purchasing regular cheeseburgers for $1 at fast-food restaurants […]
978-1305769786 Chapter 20 Lecture Note
CHAPTER 20 Setting Prices TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain […]
978-1305769786 Chapter 2 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Identifying Core Competencies ASK: What are McDonald’s core competencies? Many students will focus on food, but the key to McDonald’s success is a focus on consistency. McDonald’s restaurants all look very similar and serve a […]
978-1305769786 Chapter 2 Lecture Note
CHAPTER 2 Planning, Implementing, and Evaluating Marketing Strategies TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license […]
978-1305769786 Chapter 19 Solution Manual
DISCUSSION STARTER Discussion Starter 1: Should Cash and Credit Prices Differ? Many gas stations (and some other marketers) set one price for credit purchases and a lower price for cash purchases. No, credit customers aren’t being charged more—in fact, adding […]
978-1305769786 Chapter 19 Lecture Note
CHAPTER 19 Pricing Concepts TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as perm itted in a license distributed with a […]
978-1305769786 Chapter 18 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Sales Force Automation ASK: How do you think technology has revolutionized personal selling? Technology has radically altered how sales people do their jobs. The amount of data a salesperson has access to during the sales […]
978-1305769786 Chapter 18 Lecture Note Part 2
1. II. Sales Promotion A. Sales promotion is an activity and/or material that acts as a direct inducement, offering added value or incentive for the product to resellers, salespeople, or consumers. 1. It encompasses all promotional activities other than personal […]
978-1305769786 Chapter 18 Lecture Note Part 1
CHAPTER 18 Personal Selling and Sales Promotion TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed […]
978-1305769786 Chapter 17 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Dove Campaign for Real Beauty ASK: How many of you feel that most beauty advertising conveys an impossible standard for women to achieve? Unilever, Dove’s parent company, conducted a study about women’s attitudes toward their […]
978-1305769786 Chapter 17 Lecture Note
CHAPTER 17 Advertising and Public Relations TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with […]
978-1305769786 Chapter 16 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Selling You the Brand Using Integrated Marketing Communication ASK: How could integrating marketing tools assist you in getting the job you want? Integrated marketing forces managers to pay attention to all of the various communication […]
978-1305769786 Chapter 16 Lecture Note
CHAPTER 16 Integrated Marketing Communications TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a […]
978-1305769786 Chapter 15 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: RFID and the Future of Retailing ASK: Can you name one physical location within a retail setting that incurs significant cost and creates consumer frustration? One cost center for all types of retailing is the […]
978-1305769786 Chapter 15 Lecture Note
CHAPTER 15 Retailing, Direct Marketing and Wholesaling TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permit ted in a license […]
978-1305769786 Chapter 14 Solution Manual
DISCUSSION STARTERS Discussion Starter 1: Panasonic Greens its Supply Chain Many companies have begun to incorporated sustainability into their business models. However, one area that is particularly difficult for companies to tackle is greening their supply chains. This is in […]
978-1305769786 Chapter 14 Lecture Note Part 2
I. Intensity of Market Coverage A. In addition to deciding which marketing channels to use to distribute a product, marketers must determine the intensity of coverage a product should get—the number and kinds of outlets in which it will be […]
978-1305769786 Chapter 14 Lecture Note Part 1
CHAPTER 14 Marketing Channels and Supply-Chain Management TEACHING RESOURCES QUICK REFERENCE GUIDE © 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whol e or in part, except for use as permitted in a license […]