Calculate the discount rate consistent with a cap rate

Assignment Help Finance Basics
Reference no: EM131124274

Calculate the discount rate consistent with a cap rate of 12 percent and a growth rate of 6 percent. Show how your answer would change if the cap rate dropped to 10 percent while the growth rate declined to 5 percent.

Reference no: EM131124274

Questions Cloud

What is the equally weighted average annualized return : Assuming no intermediate flows before the terminal payoff, verify that the associated annualized rates are −42.55 percent, 8.45 percent, and 19.35 percent. What is the equally weighted average annualized return? Does it make sense to use this as a si..
What annualized return is embedded in its anticipation : Assuming it is a seed-stage firm with no existing investors, what annualized return is embedded in its anticipation?  Suppose the founder wants to have a venture investor inject $15 million in three rounds of $5 million at times 0, 1, and 2 with a ti..
Estimate the value of the new venture at the end of year 5 : Estimate the value of the new venture at the end of Year 5. Show your answer using both the direct comparison method and the direct capitalization method. What assumption are you making when using the current price-to-earning relationship for the com..
Determine the present value of the venture at the endof year : Estimate the terminal value of the venture at the end of Year 5 if the discount rate at that time is 20 percent. Determine the present value of the venture at the end of Year 0 if the venture investor wants a 40 percent annual rate of return on the i..
Calculate the discount rate consistent with a cap rate : Calculate the discount rate consistent with a cap rate of 12 percent and a growth rate of 6 percent. Show how your answer would change if the cap rate dropped to 10 percent while the growth rate declined to 5 percent.
What ingredients would you need to conduct a vcsc valuation : From the Headlines—Excaliard: What ingredients would you need to conduct a VCSC valuation for Excaliard? Does your calculation suggest that a $15.5 million Series A round is reasonable?
Discuss the type of data and the procedural changes : Discuss the type of data and the procedural changes necessary to implement a five-scenario expected PV valuation for a venture investment.
What is meant by the utopia discount process : What is meant by the utopia discount process? Describe how expected present value is calculated.
In what sense is the typical business plan utopian? : Describe the following terms from the perspective of venture performance: black hole, living dead, and venture utopia. In what sense is the typical business plan utopian?

Reviews

Write a Review

Finance Basics Questions & Answers

  If you choose use the week 5 conference topic entitled

design and defend an optimal performance appraisal system for your current position or for one to which you aspire. the

  If sales increase by 10 percent to 11000 units by what

firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are financed

  What is the net revenue per patient

Using the Patient Cost Analysis Form in the Appendix from your "Revenue Management Manual" text (Form A26), calculate your current costs per patient using the following information. What is the Net Revenue per patient?

  What promotion blend would be most appropriate for

9. what promotion blend would be most appropriate for producers of the following established products? assume average-

  Discuss swot for e bay using your web sources

What is an Auction? E Bay is a market leader in online auction sites. Discuss SWOT for E bay using your web sources and why so many entrepreneurs drawn to start businesses in the online sector initially?

  A company has 30 million portfolio with a beta of 15 the

a company has 30 million portfolio with a beta of 1.5. the futures price for a contract on the sampp index is 900.

  Compute the dollar cost of each of proposed plans for

raymond manufacturing faces a liquidity crisis - it needs a loan of 100000 for 1 month. having no source of additional

  What other factors other than occupancy-days are likely to

Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent. What other facto..

  Explain why investors may be attracted to high-risk

explain why investors may be attracted to high-risk investments such as exchange-traded derivatives global funds and

  What is up current cost of equity

What is UP's current cost of equity?

  What is the current market value of one of these bonds

Maryland Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 9.93 percent. The current market rate for similar securities is 10.79 percent.

  Short-tern investments why is referred stock with a

short-tern investments why is referred stock with a dividend tied to short-tern interest rates an attractive

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd