Reference no: EM13746167
Problem 1: Eagle Products' EMT is $300, its tax rate is 35%, depreciation is $20, capital expendi¬tures are $60, and the planned increase in net working capital is $30. What is the free cash flow to the firm?
Problem 2: FinCorp's free cash flow to the firm is reported as $205 million. The firm's interest expense is $22 million. Assume the tax rate is 35% and the net debt of the firm increases by $3 million. What is the market value of equity if the FCFE is projected to grow at 3% indefinitely and the cost of equity is 12%?
Problem 3: Sister Corp expects to earn $6 per share next year. The firm's ROE is 15% and its plowback ration 60% If the firm's market capitalization rate is 10%, what is the present value of its growth opportunities?
Problem 4: A common stocks pays an annual dividend per share of $2.10. The risk-free rate is 7% and the risk premium for this stock is 4%. If the annual dividend is expected to remain at $2.10, what is the value of the stock?
Problem 5:
A. MF Corp. has an ROE of 16% and a plowback ration of 15%. If the coming year's earnings are expected to be $2 per share, at what price will the stock sell? The market capitalization rate is 12%.
B. What price do you expect MF shares to sell for in three years?
Problem 6: Helen Morgan, CFA, has been asked to use the DDm to determine the value of Sundanci, Inc. Morgan anticipates that Sundanci's earnings and dividends will grow at 32% for two years and 13% thereafter.
Calculate the current value of a share of Sundanci stock by using a two-stage dividend discount model and the data from Table.
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Income Statement
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2009
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2010
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Revenue
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$474
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$598
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Depreciation
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20
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23
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Other operating costs
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368
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460
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Taxes
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86
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115
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Net incomes
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26
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35
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Dividends
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60
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80
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Earnings per share
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18
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24
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Dividends per share
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$0.714
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$0.952
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Common Shares outstanding (Millions)
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$0.214
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$0.286
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84.0
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84.0
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Balance Sheet
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2009
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2010
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Current Assets
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$201
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$326
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Net property, plant, and equipment
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474
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489
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Total assets
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675
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815
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Current liabilities
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57
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141
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Long term debt
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0
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0
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Total liabilities
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57
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141
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Shareholder's equity
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618
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674
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Total liabilities and equities
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675
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815
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Capital expenditure
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34
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38
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Required rate of return on equity
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14%
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Growth rate of industry
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13%
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Industry P/E ratio
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26
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Dean rate of return on investment
: Dean invested $1100 into a bond. When the bond's maturity date was reached five years latter, Dean had a total of $1500. What is Dean's rate of return on investment.
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Kind of skills and education that young men should have
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Organ or structure from the systems
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Design goals in building an operating system
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Determine the free cash flow to the firm
: Eagle Products' EMT is $300, its tax rate is 35%, depreciation is $20, capital expendi¬tures are $60, and the planned increase in net working capital is $30. What is the free cash flow to the firm?
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Explain how it interacts in function with other organ system
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Identify historical types of heavier toward women
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Dihybrid ratio
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Write an essay on terrorist acts
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