SOLUTIONS MANUAL

FINANCIAL MANAGEMENT
PRINCIPLES AND APPLICATIONS

VOLUME II

2012 Edition

MA. ELENITA BALATBAT CABRERA

BBA, MBA, CPA, CMA
 Table of Contents

Unit VII Assets Risks Concept and Pricing

Chapter 21 FINANCIAL RISK MANAGEMENT 21-1 – 21-5

22 ESTIMATING RISK AND RETURN ON ASSETS 22-1 – 22-12

23 CAPITAL ASSET PRICING MODEL AND MODERN

PORTFOLIO THEORY 23-1 – 23-11

Unit VIII Capital Structure Issues

Chapter 24 ASSESSING LONG-TERM DEBT, EQUITY AND CAPITAL

STRUCTURE 24-1 – 24-9

25 SOURCES OF LONG-TERM FINANCING 25-1 – 25-10

26 SHARING FIRM WEALTH: DIVIDENDS, SHARE

REPURCHASES AND OTHER PAYOUTS 26-1 – 26-20

Unit IX Long-term Investment Decisions

Chapter 27 CALCULATING THE COST OF CAPITAL 27-1 – 27-4

28 BASICS OF CAPITAL BUDGETING 28-1 – 28-6

29 SCREENING AND SELECTING CAPITAL INVESTMENT

PROPOSALS 29-1 – 29-10

Unit X Other Contemporary Issues in Finance

Chapter 30 MERGERS AND ACQUISITIONS; DIVESTITURES 301-1 – 30-3

31 INTERNATIONAL ASPECTS OF CORPORATE FINANCE 31-1 – 31-7