... Journal of
Economics 80 (August 1966), pp. 413–435. The Miller–Orr model is described in the Principles of Corpo-
rate Finance Web page.
Brealey−Meyers:
Principles of Corporate
Finance, Seventh Edition
IX. ... 13.4.
24
This advantage is partly offset by the fact that Treasury securities are free of state and local taxes.
Brealey−Meyers:
Principles of Corporate
Fin...
... Sachs, the last of the leading investment-bank part-
nerships, issued shares and became a public corporation in 1998.
Brealey−Meyers:
Principles of Corporate
Finance, Seventh Edition
I. Value ... overseas invest-
ments. We discuss international corporate finance at many different points in the
chapters that follow.
Brealey−Meyers:
Principles of Corporate
Finance, Sev...
... and Ethics: The Case of Salomon Broth-
ers,” Journal of Applied Corporate Finance 5 (Summer 1992), pp. 23–28.
Brealey−Meyers:
Principles of Corporate
Finance, Seventh Edition
I. Value 2. Present ... values.
• Rate -of- return rule. Accept investments that offer rates of return in excess of
their opportunity costs of capital.
5
The Opportunity Cost of Capital
The oppo...
... from the $23,800 calcu-
lated in Chapter 2. Since the net present value is positive, you should still go ahead.
4
Brealey−Meyers:
Principles of Corporate
Finance, Seventh Edition
I. Value 3. ... three-year annuity
factor?
e. From your answers to (c) and (d), calculate the three-year discount factor.
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Brealey−Meyers:
Principles of Corporate
F...
... satisfactory way of defining the true rate of re-
turn of a long-lived asset. The best available concept is the so-called discounted-
cash-flow (DCF) rate of return or internal rate of return (IRR). ... one we ob-
tained earlier. Instead of investing in one unit of project A and one of project D, we
are told to take half of project A, all of project B, and three-quarters...
... a 90,000-square-foot warehouse in northern South Dakota or a
100,000-square-foot warehouse in southern North Dakota. It can heat it either by
Brealey−Meyers:
Principles of Corporate
Finance, ... inflation rates. See Challenge Question 2 at the end of
this chapter for an example.
Brealey−Meyers:
Principles of Corporate
Finance, Seventh Edition
I. Value 6. Making Inves...