Archives: Solution Manual
978-1259709685 Chapter 21 Solution Manual Part 2
CHAPTER 21 – 12. The decision to lease results in a debt capacity that is lowered by the present value of the aftertax lease payments. The aftertax lease payment is: 13. a. Since both companies have the same tax rate, […]
978-1259709685 Chapter 13 Case
CHAPTER 13 CASE C-1 CHAPTER 13 COST OF CAPITAL FOR SWAN MOTORS NOTE: The example below shows the results during November 2012. The actual answer to the case will change based on current market conditions. 1. The book value of […]
978-1259709685 Chapter 12 Solution Manual Part 2
CHAPTER 12 B- 8. To determine which investment an investor would prefer, you must compute the variance of portfolios created by many stocks from either market. Because you know that diversification is good, it is reasonable to assume that once […]
978-1259709685 Chapter 12 Solution Manual Part 1
CHAPTER 12 AN ALTERNATIVE VIEW OF RISK AND RETURN: THE ARBITRAGE PRICING THEORY Answers to Concept Questions 1. Systematic risk is risk that cannot be diversified away through formation of a portfolio. Generally, systematic risk factors are those factors that […]
978-1259709685 Chapter 12 Lecture Note
Chapter 12 AN ALTERNATIVE VIEW OF RISK AND RETURN: THE ARBITRAGE PRICING THEORY SLIDES CHAPTER ORGANIZATION 12.1 Introduction 12.2 Systematic Risk and Betas 12.3 Portfolios and Factor Models Portfolios and Diversification 12.4 Betas, Arbitrage, and Expected Returns The Linear Relationship […]
978-1259709685 Chapter 12 Case
CHAPTER 12 CASE C-1 CHAPTER 12 THE FAMA-FRENCH MULTI-FACTOR MODEL AND MUTUAL FUND RETURNS NOTE: The example below shows the results for returns between October 2010 and September 2015. The actual answer to the case will change based on current […]
978-1259709685 Chapter 11 Solution Manual Part 3
CHAPTER 11 – 31. First, we can calculate the standard deviation of the market portfolio using the Capital Market Line (CML). We know that the risk-free asset has a return of 4.3 percent and a standard deviation of zero and […]
978-1259709685 Chapter 11 Solution Manual Part 2
20. For a portfolio that is equally invested in large-company stocks and long-term bonds: 21. We know that the reward-to-risk ratios for all assets must be equal (See Question 19). This can be expressed as: [E(RA) – Rf] / A […]
978-1259709685 Chapter 11 Solution Manual Part 1
CHAPTER 11 RISK AND RETURN: THE CAPITAL ASSET PRICING MODEL (CAPM) Answers to Concepts Review and Critical Thinking Questions 1. Some of the risk in holding any asset is unique to the asset in question. By investing in a variety […]
978-1259709685 Chapter 11 Lecture Note Part 2
Slide 11.15 – Slide 11.16 Portfolios 11.4. The Efficient Set for Two Assets With two assets, you can form portfolios composed of different percentages of each asset. The possible portfolios are referred to as the opportunity set, and the set […]
978-1259709685 Chapter 11 Lecture Note Part 1
Chapter 11 RETURN AND RISK THE CAPITAL ASSET PRICING MODEL (CAPM) SLIDES 11.1 Key Concepts and Skills 11.2 Chapter Outline 11.3 Individual Securities 11.4 Expected Return, Variance, and Covariance 11.5 Expected Return 11.6 Expected Return 11.7 Variance 11.8 Variance 11.9 […]
978-1259709685 Chapter 11 Case
CHAPTER 11 CASE C-1 CHAPTER 11 A JOB AT EAST COAST YACHTS, PART 2 1. There should be little, if any, money allocated to the company stock. The principle of diversification indicates that an individual should hold a diversified portfolio. […]
978-1259709685 Chapter 10 Solution Manual Part 2
CHAPTER 10 – 14. The return of any asset is the increase in price, plus any dividends or cash flows, all divided by the initial price. This preferred stock paid a dividend of $3.50, so the return for the year […]
978-1259709685 Chapter 10 Solution Manual Part 1
CHAPTER 10 SOME LESSONS FROM CAPITAL MARKET HISTORY Answers to Concepts Review and Critical Thinking Questions 1. They all wish they had! Since they didn’t, it must have been the case that the stellar performance was 2. As in the […]
978-1259709685 Chapter 10 Lecture Note
Chapter 10 RISK AND RETURN: LESSONS FROM MARKET HISTORY SLIDES CHAPTER WEB SITES Section Web Address 10.1 finance.yahoo.com www.marketwatch.com/markets 10.2 bigcharts.marketwatch.com CHAPTER ORGANIZATION 10.1 Returns Dollar Returns Percentage Returns 10.2 Holding Period Returns 10.1 Key Concepts and Skills 10.2 Chapter […]
978-1259709685 Chapter 10 Case
CHAPTER 10 CASE C-1 CHAPTER 10 A JOB AT EAST COAST YACHTS 1. The biggest advantage the mutual funds have is instant diversification. The mutual funds have a 3. The advantage of the actively managed fund is the possibility of […]
978-1259709685 Chapter 1 Solution Manual
CHAPTER 2 – 1 CHAPTER 1 INTRODUCTION TO CORPORATE FINANCE Answers to Concept Questions 1. In the corporate form of ownership, the shareholders are the owners of the firm. The shareholders elect the directors of the corporation, who in turn […]
978-1259709685 Chapter 1 Lecture Note Part 2
Slide 1.15 The Agency Problem A. Agency Relationships The relationship between stockholders and management is called the agency relationship. This occurs when one party (principal) hires another (agent) to act on their behalf. The possibility of conflicts of interest between […]
978-1259709685 Chapter 1 Lecture Note Part 1
Chapter 1 INTRODUCTION TO CORPORATE FINANCE SLIDES CHAPTER WEB SITES Section Web Address 1.1 www.cfo.com 1.4 www.business-ethics.com 1.6 www.protiviti.com/en-US/Documents/Surveys/2014-SOX- Compliance-Survey-Protiviti.pdf CHAPTER ORGANIZATION 1.1 What Is Corporate Finance? The Balance Sheet Model of the Firm The Financial Manager 1.2 The Corporate […]
978-1259573200 Section 5 Section 5 Part 3
EADSM Aircraft Buyer A ! ””#$ %&’ % (”)$ (!*+”(#+% (”$ ,-.”/0 123”!*+%&’ 4 EADSM Aircraft Buyer B !) ! ””#$ 53! 2””4 6*4 ”$ 78” 49:; $ :”7 $ %&’ % (”)$ […]
978-1259573200 Section 5 Section 5 Part 2
STRATOS AIRCRAFT Seller !”#$% &'(&)* ! )+$ ,#!#$ $-.,+ ! Stratos Selling Scenario Buyer A /$01 %” ” ! %&'( &)*! ) $2&'(34! 5678 419,$$&'( : ;1, 9”: <1$:/”$ 1! Stratos Selling Scenario […]
978-1259573200 Section 5 Section 5 Part 1
1SECTION 5 ADDITIONAL SELLER AND BUYER ROLE PLAY SCENARIOS THE ROLE PLAYS IN THIS SECTION WERE PROVIDED BY RONALD N. BORRIECI FROM COB EMBRY-RIDDLE AERONAUTICAL UNIVERSITY. USED WITH EXPRESS PERMISSION OF THE AUTHOR. Kinetic Air Cargo Seller ffff ffffff […]
978-1259573200 Section 4 Section 4 Part 3
Gartner Buyer Scenario Situation 5 PORT GROUP Buyer A You are the Director of Network Support for Port Group, a company with offices in New York, London, San Francisco, and your city. The company is a commercial real estate owner, […]
978-1259573200 Section 4 Section 4 Part 2
SmartBlend Dog Food Buyer Scenario Situation 8 Camp Bow Wow (Franchise Headquarters) Buyer B You are a driver. Needs: To simply your life. You have so many things going on right now that you can hardly see straight. Your spouse […]
978-1259573200 Section 4 Section 4 Part 1
1SECTION 4 BUYER ROLE PLAY SCENARIOS For the Two Role Play Cases (Purina ONE SmartBlend Dog Food® and Gartner) at the back of the text book. SmartBlend Dog Food Buyer Scenario Situation 1 Animal Haven Buyer A You are an […]
978-1259573200 Section 3 Section 3 Part 2
THE FEEDBACK PROCESS As Castleberry (1989) noted, videotaping role plays can be traumatic for some students. Castleberry (1989) provides several useful techniques for students to minimize camera fright. A more traumatic experience may be the debriefing session that takes place […]
978-1259573200 Section 3 Section 3 Part 1
SECTION 3 THE USE AND EVALUATION OF ROLE PLAYS VIDEOTAPED ROLE PLAYING IN THE PERSONAL SELLING In 1982, Swinyard, reporting on a survey of over 1,000 marketing students, stated that “the data largely supports past findings that sales careers are […]
978-1259573200 Section 1 Section 1
SECTION 1 SAMPLE COURSE OUTLINES Sample Course Outline for a 15 Week Semester* Week 1 Course Introduction, and Ethical/Legal Issues Chapters 1, 2 Week 2 Buyer Behavior and Communication Principles Chapters 3, 4 Week 8 Building Partnering Relationships, and Building […]
978-1259573200 Chapter 9 Lecture Note
CHAPTER 9 STRENGTHENING THE PRESENTATION Outline of Chapter I. Characteristics of a strong presentation A. Keeps the buyer’s attention B. Improves the buyer’s understanding C. Helps the buyer remember what was said D. Offers proof of salesperson’s assertions E. Creates […]
978-1259573200 Chapter 8 Lecture Note Part 2
EXERCISE 8-1 ASSESSING THE EFFECTIVENESS OF VARIOUS APPROACHES Comment on each of the following sets of statements. Pick the one in each set that is most effective and appropriate. Explain your choice. A. Introduction Opening 1. Hi, I’m Larry Smith. […]
978-1259573200 Chapter 8 Lecture Note Part 1
CHAPTER 8 MAKING THE SALES CALL Outline of Chapter I. Making a good impression A. Waiting for the prospect B. Very first impressions C. Selecting a seat D. Getting the customer’s attention E. Developing rapport F. When things go wrong […]
978-1259573200 Chapter 7 Lecture Note Part 2
Suggested Answers to Case Problems Case 7-1: Presidential Aviation (Part A) 1. What kind of information should Miguel gather about Jorge before their meeting? The text lists the kinds of things that Miguel should learn. Some examples include: What are […]
978-1259573200 Chapter 7 Lecture Note Part 1
CHAPTER 7 PLANNING THE SALES CALL Outline of Chapter I. Why plan the sales call II. Obtaining Precall information A. The prospect/customer as an individual B. The prospect’s/customer’s organization III. Sources of information A. Resources within your company B. The […]
978-1259573200 Chapter 6 Lecture Note
CHAPTER 6 PROSPECTING Outline of Chapter ! ! “ ! # $ %&$ ‘(! “) *+ ‘, “ $- […]
978-1259573200 Chapter 5 Lecture Note
CHAPTER 5 ADAPTIVE SELLING FOR RELATIONSHIP BUILDING Outline of Chapter I. Types of Presentations A. Standard Memorized Presentation B. Outlined Presentation C. Customized Presentation II. Adaptive Selling and Sales Success III. Adaptive Selling: The Importance of Knowledge A. Product and […]
978-1259573200 Chapter 4 Lecture Note Part 2
End of Chapter Role Play Note to the Instructor: On the following pages, you’ll find the role play information you need to supply to the buyers. To debrief this role play, focus on whether the students identified the three most […]
978-1259573200 Chapter 4 Lecture Note Part 1
CHAPTER 4 USING COMMUNICATION PRINCIPLES TO BUILD RELATIONSHIPS Outline of Chapter I. Building Relationships through Two-Way Communication A. The Communication Process B. Communication Breakdowns II. Sending Verbal Messages Effectively A. Choice of Words B. Voice Characteristics C. Stories D. Keep […]
978-1259573200 Chapter 3 Lecture Note Part 2
Suggested Answers to Case Problems Case 3-1: Going out Through the Backdoor Questions: 1. What would you do? Do you lower your price or walk away? Why? Write out specifically what you would say next. What Travis did was not […]
978-1259573200 Chapter 3 Lecture Note Part 1
CHAPTER 3 BUYING BEHAVIOR AND THE BUYING PROCESS Outline of Chapter I. Types of Customers A. Producers B. OEM Purchasers C. End Users D. Resellers E. Government Agency F. Institutions G. Consumers II. Organizational Buying and Selling A. Complexity of […]
978-1259573200 Chapter 2 Lecture Note
CHAPTER 2 ETHICAL AND LEGAL ISSUES IN SELLING Outline of Chapter I. Ethics and Personal Selling A. Ethics and Partnering Relationships B. Factors Influencing the Ethical Behavior of Salespeople 1. Personal, Company, and Customer Needs 2. Company Policies 3. Values […]
978-1259573200 Chapter 17 Lecture Note
CHAPTER 17 MANAGING YOUR CAREER 1. Understanding Your Needs 2. Understanding What You Have to Offer 3. When to Ask These Questions B. Understanding the Company 1. What the Company Has to Offer 2. What the Company Needs III. The […]
978-1259573200 Chapter 16 Lecture Note
CHAPTER 16 MANAGING WITHIN YOUR COMPANY Outline of Chapter I. Building Internal Partnerships A. The Importance of Internal Partnerships B. The Role of Sales C. Selling Internally II. Company Areas Important to Salespeople A. Manufacturing B. Administration C. Shipping D. […]
978-1259573200 Chapter 15 Lecture Note
CHAPTER 15 MANAGING YOUR TIME AND TERRITORY I. The Value of Time II. The Self Management Process III. Setting Goals A. Need for Goals B. Nature of Goals C. Types of Sales Goals 1. Performance Goals 2. Activity Goals 3. […]
978-1259573200 Chapter 14 Lecture Note
CHAPTER 14 BUILDING LONG-TERM PARTNERSHIPS Outline of Chapter I. Exploration A. Set the Right Expectations B. Monitor Order Processing C. Ensure Proper Initial Use of the Product or Service D. Follow Up E. Handle Customer Complaints 1. Encourage Buyers to […]
978-1259573200 Chapter 13 Lecture Note
CHAPTER 13 BUILDING PARTNERING RELATIONSHIPS Outline of Chapter I. The Value of Customers II. Relationships and Selling A. Types of Relationships 1. Market Exchanges a. Solo Exchange b. Functional Relationships 2. Partnerships a. Relational Partnerships b. Strategic Partnerships III. Managing […]
978-1259573200 Chapter 12 Lecture Note Part 2
Case 12-2: Identifying Conflict-Handling Modes 1. Based on the information provided, what is the conflict-handling mode of each person? Alexis – Compromising 2. What conflict-handling mode is not illustrated in the examples provided? Describe what that person is generally like. […]
978-1259573200 Chapter 12 Lecture Note Part 1
CHAPTER 12 FORMAL NEGOTIATING Outline of Chapter I. The nature of negotiation A. Negotiation versus non-negotiation selling B. What can be negotiated C. Are you a good negotiator? II. Planning for the negotiation session A. Location B. Time allotment C. […]
978-1259573200 Chapter 11 Lecture Note
CHAPTER 11 OBTAINING COMMITMENT Outline of Chapter I. Obtaining commitment today A. Part of the Process B. Importance of securing commitment II. Financial terms and conditions A. Discounts B. Credit terms C. Shipping costs D. Presenting price III. When to […]
978-1259573200 Chapter 10 Lecture Note Part 2
ARM Buyer Role Play Information Chapter 10 End of Chapter Role Play Case Here are your objections: 1. Very early, say “This seems really complicated. I bet it is too expensive for us.” If probed, say “I think I could […]
978-1259573200 Chapter 10 Lecture Note Part 1
CHAPTER 10 RESPONDING TO OBJECTIONS Outline of Chapter I. The goal is to build relationships and sell value II. When do buyers raise objections? A. Setting up an initial appointment B. The presentation C. Attempting to obtain commitment D. After […]