Calculated by financial models

Assignment Help Financial Accounting

Reference no: EM133379769

Question 1:

There are a number of different risk and return models in finance used to compute the cost of equity but they typically assume that the marginal investor is well diversified. If you use these models to estimate costs of equity for private or closely held firms, are you likely to under or over estimate the cost of equity? How would you fix the bias?

Question 2:

Give three specific examples of reasons why a firm may have a higher market valuation that would be calculated by financial models.?

Question 3:

ABC Corp has been determined to be coming out of a growth phase and will be entering a mature profitable period for the foreseeable future. You have analyzed their financial statements and have determined they will have 3 distinct periods coming up. What is the firm's value, given the following?

Reference no: EM133379769

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