Intermediate Financial Management 12th Edition Brigham Test Bank

1. Part I: Fundamental Concepts of Corporate Finance
2. Ch 1: An Overview of Financial Management and the Financial Environment
3. Beginning-of-Chapter Questions
4. 1-1: How to Use this Text
5. Box: The Global Economic Crisis
6. Box: Columbus Was Wrong-The World Is Flat! And Hot! And Crowded!
7. 1-2: The Corporate Life Cycle
8. 1-3: The Primary Objective of the Corporation: Value Maximization
9. Box: Ethics for Individuals and Businesses
10. Box: Corporate Scandals and Maximizing Stock Price
11. 1-4: An Overview of the Capital Allocation Process
12. 1-5: Financial Securities
13. 1-6: The Cost of Money
14. 1-7: The Global Economic Crisis
15. Box: Global Economic Crisis- Anatomy of a Toxic Asset
16. 1-8: The Big Picture
17. 1-9: e-Resources
18. Ch 1: Summary
19. Ch 2: Risk and Return: Part I
20. Beginning-of-Chapter Questions
21. 2-1: Investment Returns and Risk
22. Box: Intrinsic Value, Risk, and Return
23. 2-2: Measuring Risk for Discrete Distributions
24. 2-3: Risk in a Continuous Distribution
25. 2-4: Using Historical Data to Estimate Risk
26. Box: What does Risk Really Mean?
27. Box: The Historic Trade-Off between Risk and Return
28. 2-5: Risk in a Portfolio Context
29. 2-6: The Relevant Risk of a Stock: The Capital Asset Pricing Model (CAPM)
30. Box: The Benefits of Diversifying Overseas
31. 2-7: The Relationship between Risk and Return in the Capital Asset Pricing Model
32. 2-8: The Efficient Markets Hypothesis
33. Box: Another Kind of Risk: The Bernie Madoff Story
34. 2-9: The Fama-French Three-Factor Model
35. 2-10: Behavioral Finance
36. 2-11: The CAPM and Market Efficiency: Implications for Corporate Managers and Investors
37. Summary
38. Ch 3: Risk and Return: Part II
39. Beginning-of-Chapter Questions
40. Box: Intrinsic Value, Risk, and Return
41. 3-1: Efficient Portfolios
42. 3-2: Choosing the Optimal Portfolio
43. 3-3: The Basic Assumptions of the Capital Asset Pricing Model
44. 3-4: The Capital Market Line and the Security Market Line
45. Box: Skill or Luck?
46. 3-5: Calculating Beta Coefficients
47. 3-6: Empirical Tests of the CAPM
48. 3-7: Arbitrage Pricing Theory
49. Summary
50. Ch 4: Bond Valuation
51. Beginning-of-Chapter Questions
52. Box: Intrinsic Value and the Cost of Debt
53. 4-1: Who Issues Bonds?
54. Box: The Global Economic Crisis- Betting with or Against the U.S. Government: The Case of Treasury B
55. 4-2: Key Characteristics of Bonds
56. 4-3: Bond Valuation
57. 4-4: Changes in Bond Values Over Time
58. Box: Drinking Your Coupons
59. 4-5: Bonds with Semiannual Coupons
60. 4-6: Bond Yields
61. 4-7: The Pre-Tax Cost of Debt: Determinants of Market Interest Rates
62. 4-8: The Real Risk-Free Rate of Interest, r*
63. 4-9: The Inflation Premium (IP)
64. 4-10: The Nominal, or Quoted, Risk-Free Rate of Interest, rRF
65. 4-11: The Default Risk Premium (DRP)
66. Box: The Global Economic Crisis- Insuring with Credit Default Swaps: Let the Buyer Beware!
67. Box: The Global Economic Crisis- U.S. Treasury Bonds Downgraded!
68. Box: The Few, the Proud, the … AAA-Rated Companies!
69. Box: The Global Economic Crisis- Fear and Rationality
70. 4-12: The Liquidity Premium (LP)
71. 4-13: The Maturity Risk Premium (MRP)
72. 4-14: The Term Structure of Interest Rates
73. 4-15: Financing with Junk Bonds
74. 4-16: Bankruptcy and Reorganization
75. Summary
76. Ch 5: Financial Options
77. Beginning-of-Chapter Questions
78. Box: The Intrinsic Value of Stock Options
79. 5-1: Overview of Financial Options
80. Box: Financial Reporting for Employee Stock Options
81. 5-2: The Single-Period Binomial Option Pricing Approach
82. 5-3: The Single-Period Binomial Option Pricing Formula
83. 5-4: The Multi-Period Binomial Option Pricing Model
84. 5-5: The Black-Scholes Option Pricing Model (OPM)
85. Box: Taxes and Stock Options
86. 5-6: The Valuation of Put Options
87. 5-7: Applications of Option Pricing in Corporate Finance
88. Summary
89. Ch 6: Accounting for Financial Management
90. Beginning-of-Chapter Questions
91. Box: Intrinsic Value, Free Cash Flow, and Financial Statements
92. 6-1: Financial Statements and Reports
93. 6-2: The Balance Sheet
94. Box: The Global Economic Crisis- Let’s Play Hide-and-Seek!
95. 6-3: The Income Statement
96. 6-4: Statement of Stockholders’ Equity
97. Box: Financial Analysis on the Web
98. 6-5: Statement of Cash Flows
99. Box: Filling in the GAAP
100. 6-6: Net Cash Flow
101. 6-7: Free Cash Flow: The Cash Flow Available for Distribution to Investors
102. Box: Sarbanes-Oxley and Financial Fraud
103. 6-8: Performance Evaluation
104. 6-9: The Federal Income Tax System
105. Box: When It Comes to Taxes, History Repeats and Repeals Itself!
106. Summary
107. Ch 7: Analysis of Financial Statements
108. Beginning-of-Chapter Questions
109. Box: Intrinsic Value and Analysis of Financial Statements
110. 7-1: Financial Analysis
111. 7-2: Liquidity Ratios
112. 7-3: Asset Management Ratios
113. Box: The Global Economic Crisis- The Price is Right! (Or Wrong!)
114. 7-4: Debt Management Ratios
115. 7-5: Profitability Ratios
116. Box: The World Might Be Flat, But Global Accounting Is Bumpy! The Case of IFRS versus FASB
117. 7-6: Market Value Ratios
118. 7-7: Trend Analysis, Common Size Analysis, and Percentage Change Analysis
119. 7-8: Tying the Ratios Together: The DuPont Equation
120. 7-9: Comparative Ratios and Benchmarking
121. 7-10: Uses and Limitations of Ratio Analysis
122. Box: Ratio Analysis on the Web
123. 7-11: Looking Beyond the Numbers
124. Summary
125. Part II: Corporate Valuation
126. Ch 8: Basic Stock Valuation
127. Beginning-of-Chapter Questions
128. Box: Corporate Valuation and Stock Prices
129. 8-1: Legal Rights and Privileges of Common Stockholders
130. 8-2: Types of Common Stock
131. 8-3: Stock Market Reporting
132. 8-4: Valuing Common Stocks—Introducing the Free Cash Flow (FCF) Valuation Model
133. 8-5: The Constant Growth Model: Valuation When Expected Free Cash Flow Grows at a Constant Rate
134. 8-6: The Multi-Stage Model: Valuation When Expected Short-Term Free Cash Flow Grows at a Nonconstant
135. 8-7: Application of the FCF Valuation Model to MicroDrive
136. 8-8: Do Stock Values Reflect Long-Term or Short-Term Cash Flows?
137. 8-9: Using the Free Cash Flow Valuation Model to Identify Value Drivers
138. 8-10: Why Are Stock Prices so Volatile?
139. 8-11: Valuing Common Stocks with the Dividend Growth Model
140. 8-12: Market Multiple Analysis
141. 8-13: Preferred Stock
142. Summary
143. Ch 9: Corporate Valuation and Financial Planning
144. Beginning-of-Chapter Questions
145. Box: Corporate Valuation and Financial Planning
146. 9-1: Overview of Financial Planning
147. 9-2: Financial Planning at MicroDrive Inc.
148. 9-3: Forecasting Operations
149. 9-4: Projecting MicroDrive’s Financial Statements
150. 9-5: Analysis and Revision of the Preliminary Plan
151. 9-6: Additional Funds Needed (AFN) Equation Method
152. 9-7: Forecasting When the Ratios Change
153. Summary
154. Ch 10: Corporate Governance
155. Beginning-of-Chapter Questions
156. Box: Corporate Governance and Corporate Valuation
157. 10-1: Agency Conflicts
158. 10-2: Corporate Governance
159. Box: The Global Economic Crisis- Would the U.S. Government Be an Effective Board Director?
160. Box: The Dodd-Frank Act and “Say on Pay”
161. Box: The Sarbanes-Oxley Act of 2002 and Corporate Governance
162. Box: International Corporate Governance
163. 10-3: Employee Stock Ownership Plans (ESOPs)
164. Summary
165. Ch 11: Determining the Cost of Capital
166. Beginning-of-Chapter Questions
167. Box: Corporate Valuation and the Cost of Capital
168. 11-1: The Weighted Average Cost of Capital
169. 11-2: Choosing Weights for the Weighted Average Cost of Capital
170. 11-3: After-Tax Cost of Debt: rd(1 – T) and rstd(1 – T)
171. Box: How Effective is the Effective Corporate Tax Rate?
172. 11-4: Cost of Preferred Stock, rps
173. 11-5: Cost of Common Stock: The Market Risk Premium, RPM
174. 11-6: Using the CAPM to Estimate the Cost of Common Stock, rs
175. 11-7: Dividend-Yield-Plus-Growth-Rate, or Discounted Cash Flow (DCF), Approach
176. 11-8: The Weighted Average Cost of Capital (WACC)
177. Box: Global Variations in the Cost of Capital
178. 11-9: Adjusting the Cost of Equity for Flotation Costs
179. 11-10: Privately Owned Firms and Small Businesses
180. 11-11: Managerial Issues and the Cost of Capital
181. Summary
182. Part III: Project Valuation
183. Ch 12: Capital Budgeting: Decision Criteria
184. Beginning-of-Chapter Questions
185. Box: Corporate Valuation and Capital Budgeting
186. 12-1: An Overview of Capital Budgeting
187. 12-2: The First Step in Project Analysis
188. 12-3: Net Present Value (NPV)
189. 12-4: Internal Rate of Return (IRR)
190. 12-5: Modified Internal Rate of Return (MIRR)
191. 12-6: Profitability Index (PI)
192. 12-7: Payback Period
193. 12-8: How to Use the Different Capital Budgeting Methods
194. 12-9: Other Issues in Capital Budgeting
195. Summary
196. Ch 13: Capital Budgeting: Estimating Cash Flows and Analyzing Risk
197. Beginning-of-Chapter Questions
198. Box: Project Valuation, Cash Flows, and Risk Analysis
199. 13-1: Identifying Relevant Cash Flows
200. 13-2: Analysis of an Expansion Project
201. Box: Mistakes in Cash Flow Estimation Can Kill Innovation
202. 13-3: Risk Analysis in Capital Budgeting7
203. 13-4: Measuring Stand-Alone Risk
204. 13-5: Sensitivity Analysis
205. 13-6: Scenario Analysis
206. 13-7: Monte Carlo Simulation
207. 13-8: Project Risk Conclusions
208. 13-9: Replacement Analysis
209. 13-10: Real Options
210. 13-11: Phased Decisions and Decision Trees
211. Summary
212. Appendix 13A: Tax Depreciation
213. Ch 14: Real Options
214. Beginning-of-Chapter Questions
215. 14-1: Valuing Real Options
216. 14-2: The Investment Timing Option: An Illustration
217. 14-3: The Growth Option: An Illustration
218. 14-4: Concluding Thoughts on Real Options
219. Summary
220. Part IV: Strategic Financing Decisions
221. Ch 15: Distributions to Shareholders: Dividends and Repurchases
222. Beginning-of-Chapter Questions
223. Box: Uses of Free Cash Flow: Distributions to Shareholders
224. 15-1: An Overview of Cash Distributions
225. 15-2: Procedures for Cash Distributions
226. 15-3: Cash Distributions and Firm Value
227. 15-4: Clientele Effect
228. 15-5: Information Content, or Signaling, Hypothesis
229. 15-6: Implications for Dividend Stability
230. Box: Will Dividends Ever Be the Same?
231. 15-7: Setting the Target Distribution Level: The Residual Distribution Model
232. 15-8: The Residual Distribution Model in Practice
233. 15-9: A Tale of Two Cash Distributions: Dividends versus Stock Repurchases
234. 15-10: The Pros and Cons of Dividends and Repurchases
235. Box: Dividend Yields Around the World
236. 15-11: Other Factors Influencing Distributions
237. 15-12: Summarizing the Distribution Policy Decision
238. 15-13: Stock Splits and Stock Dividends
239. Box: The Global Economic Crisis- Talk about a Split Personality!
240. 15-14: Dividend Reinvestment Plans
241. Summary
242. Ch 16: Capital Structure Decisions
243. Beginning-of-Chapter Questions
244. Box: Corporate Valuation and Capital Structure
245. 16-1: An Overview of Capital Structure
246. 16-2: Business Risk and Financial Risk
247. 16-3: Capital Structure Theory
248. Box: Yogi Berra on the MM Proposition
249. 16-4: Capital Structure Evidence and Implications
250. 16-5: Estimating the Optimal Capital Structure
251. 16-6: Anatomy of a Recapitalization
252. Box: The Global Economic Crisis- Deleveraging
253. Summary
254. Ch 17: Dynamic Capital Structures and Corporate Valuation
255. Beginning-of-Chapter Questions
256. Box: Corporate Valuation and Capital Structure Decisions
257. 17-1: The Impact of Growth and Tax Shields on Value
258. 17-2: The Modigliani and Miller Models and the Compressed Adjusted Present Value (APV) Model
259. 17-3: Dynamic Capital Structures and the Adjusted Present Value (APV) Model
260. 17-4: Risky Debt and Equity as an Option
261. 17-5: Introducing Personal Taxes: The Miller Model
262. 17-6: Capital Structure Theory: Arbitrage Proofs of the Modigliani-Miller Theorems
263. Summary
264. Part V: Tactical Financing Decisions
265. Ch 18: Initial Public Offerings, Investment Banking, and Financial Restructuring
266. Beginning-of-Chapter Questions
267. 18-1: The Financial Life Cycle of a Start-up Company
268. 18-2: The Decision to Go Public
269. 18-3: The Process of Going Public: An Initial Public Offering
270. 18-4: Equity Carve-Outs: A Special Type of IPO
271. 18-5: Other Ways to Raise Funds in the Capital Markets
272. Box: Where There’s Smoke There’s Fire
273. 18-6: Investment Banking Activities and Their Role in the Global Economic Crisis
274. Box: What was the Role of Investment Banks?
275. 18-7: The Decision to Go Private
276. 18-8: Managing the Maturity Structure of Debt
277. 18-9: Refunding Operations
278. Box; TVA Ratchets Down Its Interest Expenses
279. 18-10: Managing the Risk Structure of Debt with Project Financing
280. Summary
281. Ch 19: Lease Financing
282. Beginning-of-Chapter Questions
283. 19-1: Types of Leases
284. 19-2: Tax Effects
285. 19-3: Financial Statement Effects
286. Off-Balance Sheet Financing: Is It Going to Disappear?
287. 19-4: Evaluation by the Lessee
288. 19-5: Evaluation by the Lessor
289. 19-6: Other Issues in Lease Analysis
290. Box: What You Don’t Know Can Hurt You!
291. Box: Lease Securitization
292. 19-7: Other Reasons for Leasing
293. Summary
294. Ch 20: Hybrid Financing: Preferred Stock, Warrants, and Convertibles
295. Beginning-of-Chapter Questions
296. 20-1: Preferred Stock
297. Box: The Romance Had No Chemistry, but It Had a Lot of Preferred Stock!
298. Box: Hybrids Aren’t Only for Corporations
299. 20-2: Warrants
300. 20-3: Convertible Securities
301. 20-4: A Final Comparison of Warrants and Convertibles
302. 20-5: Reporting Earnings When Warrants or Convertibles Are Outstanding
303. Summary
304. Part VI: Working Capital Management
305. Ch 21: Supply Chains and Working Capital Management
306. Beginning-of-Chapter Questions
307. Box: Corporate Valuation and Working Capital Management
308. 21-1: Overview of Working Capital Management
309. 21-2: Using and Financing Operating Current Assets
310. 21-3: The Cash Conversion Cycle
311. Box: Some Firms Operate with Negative Working Capital!
312. 21-4: The Cash Budget
313. 21-5: Cash Management and the Target Cash Balance
314. 21-6: Cash Management Techniques
315. Box: Your Check Isn’t in the Mail
316. 21-7: Inventory Management
317. Box: Supply Chain Management
318. 21-8: Receivables Management
319. Box: Supply Chain Finance
320. 21-9: Accruals and Accounts Payable (Trade Credit)
321. Box: A Wag of the Finger or Tip of the Hat? The Colbert Report and Small Business Payment Terms
322. 21-10: Managing Short-Term Investments
323. 21-11: Short-Term Financing
324. 21-12: Short-Term Bank Loans
325. 21-13: Commercial Paper
326. 21-14: Use of Security in Short-Term Financing
327. Summary
328. Ch 22: Providing and Obtaining Credit
329. Beginning-of-Chapter Questions
330. 22-1: Credit Policy
331. 22-2: Setting the Credit Period and Standards
332. 22-3: Setting the Collection Policy
333. 22-4: Cash Discounts
334. 22-5: Other Factors Influencing Credit Policy
335. 22-6: The Payments Pattern Approach to Monitoring Receivables
336. 22-7: Analyzing Proposed Changes in Credit Policy
337. 22-8: Analyzing Proposed Changes in Credit Policy: Incremental Analysis
338. 22-9: The Cost of Bank Loans
339. 22-10: Choosing a Bank
340. Summary
341. Ch 23: Other Topics in Working Capital Management
342. Beginning-of-Chapter Questions
343. 23-1: The Concept of Zero Working Capital
344. 23-2: Setting the Target Cash Balance
345. 23-3: Inventory Control Systems
346. 23-4: Accounting for Inventory
347. 23-5: The Economic Ordering Quantity (EOQ) Model
348. 23-6: EOQ Model Extensions
349. Summary
350. Part VII: Special Topics
351. Ch 24: Enterprise Risk Management
352. Beginning-of-Chapter Questions
353. Box: Corporate Valuation and Risk Management
354. 24-1: Reasons to Manage Risk
355. 24-2: An Overview of Enterprise Risk Management
356. 24-3: A Framework for Enterprise Risk Management
357. 24-4: Categories of Risk Events
358. 24-5: Foreign Exchange (FX) Risk
359. 24-6: Commodity Price Risk
360. 24-7: Interest Rate Risk
361. Box: The Game of Truth or LIBOR
362. 24-8: Project Selection Risks
363. 24-9: Managing Credit Risks
364. 24-10: Risk and Human Safety
365. Summary
366. Ch 25: Bankruptcy, Reorganization, and Liquidation
367. Beginning-of-Chapter Questions
368. 25-1: Financial Distress and Its Consequences
369. 25-2: Issues Facing a Firm in Financial Distress
370. 25-3: Settlements without Going through Formal Bankruptcy
371. 25-4: Federal Bankruptcy Law
372. 25-5: Reorganization in Bankruptcy
373. 25-6: Liquidation in Bankruptcy
374. Box: A Nation of Defaulters?
375. 25-7: Anatomy of a Bankruptcy: Transforming the GM Corporation into the GM Company
376. 25-8: Other Motivations for Bankruptcy
377. 25-9: Some Criticisms of Bankruptcy Laws
378. Summary
379. Ch 26: Mergers and Corporate Control
380. Beginning-of-Chapter Questions
381. 26-1: Rationale for Mergers
382. 26-2: Types of Mergers
383. 26-3: Level of Merger Activity
384. 26-4: Hostile versus Friendly Takeovers
385. 26-5: Merger Regulation
386. 26-6: Overview of Merger Analysis
387. 26-7: The Free Cash Flow to Equity (FCFE) Approach
388. 26-8: Illustration of the Three Valuation Approaches for a Constant Capital Structure
389. 26-9: Setting the Bid Price
390. 26-10: Analysis When There Is a Permanent Change in Capital Structure
391. 26-11: Taxes and the Structure of the Takeover Bid
392. Box: Tempest in a Teapot?
393. 26-12: Financial Reporting for Mergers
394. 26-13: Analysis for a “True Consolidation”
395. 26-14: The Role of Investment Bankers
396. 26-15: Who Wins: The Empirical Evidence
397. Box: Merger Mistakes
398. 26-16: Corporate Alliances
399. 26-17: Divestitures
400. 26-18: Holding Companies
401. Summary
402. Ch 27: Multinational Financial Management
403. Beginning-of-Chapter Questions
404. Box: Corporate Valuation in a Global Context
405. 27-1: Multinational, or Global, Corporations
406. 27-2: Multinational versus Domestic Financial Management
407. 27-3: Exchange Rates
408. 27-4: Exchange Rates and International Trade
409. 27-5: The International Monetary System and Exchange Rate Policies
410. 27-6: Trading in Foreign Exchange
411. 27-7: Interest Rate Parity
412. 27-8: Purchasing Power Parity
413. Box: Hungry for a Big Mac? Go To Ukraine!
414. 27-9: Inflation, Interest Rates, and Exchange Rates
415. 27-10: International Money and Capital Markets
416. Box: Greasing the Wheels of International Business
417. Box: Stock Market Indices Around the World
418. 27-11: Multinational Capital Budgeting
419. Box: Consumer Finance in China
420. Box: Double Irish with a Dutch Twist
421. 27-12: International Capital Structures
422. 27-13: Multinational Working Capital Management
423. Summary
424. Appendixes
425. Appendix A: Values of the Areas under the Standard Normal Distribution Function
426. Appendix B: Answers to End-of-Chapter Problems
427. Appendix C: Selected Equations
428. Glossary
429. Name Index
430. Subject Index

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