Differs substantially from the market value of the firm

Assignment Help Financial Management
Reference no: EM131449975

When valuing a company and you find that your estimated value of the firm differs substantially from the market value of the firm, what do you think could cause this big discrepancy? Explain the steps you will take to make sure that your estimate is reliable?

Reference no: EM131449975

Questions Cloud

Compare the us constitution and the arizona constitution : Compare and contrast the U.S. Constitution and the Arizona Constitution. Discuss three findings that account for the significant differences in length.
Flotation costs to use for its planned growth : how many shares of common stock must be issued so that it has $600 million after flotation costs to use for its planned growth.
Write a summary about wisconsins performance on this metric : Browse through the attached summary of Healthy People 2000 (it is lengthy). Select one of the priorities of Health (starting on pg. 71-read the entire section f
What is stereotyping : What is stereotyping? Give an example of how stereotyping can create perceptual distortion.
Differs substantially from the market value of the firm : When valuing company and you find that your estimated value of the firm differs substantially from the market value of the firm,
Do you agree or disagree with the given statement : "Behaviour is generally predictable, so there is no need to formally study OB." Do you agree or disagree with this statement? Why?
Behavioral finance is the study : Behavioral finance is the study of-how investors react to accounting-based profit fluctuations.
What is the foreign exchange rate between dollar and euro : What is the foreign exchange rate between the dollar and the euro?
How does the technology help save human lives : How does the technology help save human lives? What are the uses of item? If the item is broke or lost does it get replaced? This would be after an incident.

Reviews

Write a Review

Financial Management Questions & Answers

  The dividend yield is defined

The dividend yield is defined as:

  What does your willingness to pay for these vacations

Supposing that you're indifferent between these two destinations, save for the differential risk of death, what does your willingness to pay for these vacations tell you about how much you value your life?

  What are the potential benefits of the aca

What are the potential benefits of the ACA - what is the potential negative impact of the ACA and what, if any, ethical considerations might there be for any of the three scenarios?

  Proposing rights offering

British Columbia Ltd. is proposing a rights offering. Currently there are 500,000 shares outstanding at $60 each. The company is considering $5,200,000 new equity offered to existing shareholders through a rights offering with a subscription price of..

  The investment of this buyer as function of interest rate r

Consider a homebuyer/investor who plans to buy a new house, the price of which is 1 million dollars. Suppose the buyer does not have any initial savings for the down payment. That is, if the mortgage asks him to repay more than $ 50,000 per year (thi..

  Determining which small projects should be funded

Leslie is charged with determining which small projects should be funded. Along with this assignment, she has been granted the use of $15,000 for a maximum of two years. She is considering three projects. Project A costs $7,500 and has cash flows of ..

  Debt with a yield to maturity

ABC Company has debt with a yield to maturity of 7%, a cost of common stock of 13%, and a cost of preferred stock 9%. The market values of its debt, preferred stock, and common stock are $10 millions. $3 millions, and $15 million, respectively, and i..

  Calculate standard deviation of nominal returns

Use the data below to calculate the standard deviation of nominal and real Treasury bill returns from 1972-1982.

  Expiration call option on IBM with exercise price

What will be the profit/loss on this position if IBM is selling at $162 on the option expiration date? What will be the profit/loss on this position if IBM is selling at $174 on the option expiration date? What kind of bet is this investor making; th..

  What size annuity will result in a lump sum equal

You wish to purchase a home in five years from now and estimates that an initial down payment of $20,000 will be required at that time; and you wish to make equal annual end-of year deposits in an account paying annual interest of 6 percent, so what ..

  What is the new divisor for price-weighted index

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $37, $312, and $94, respectively. If Baker undergoes a 2-for-1 stock split, what is the new divisor for the price-weighted index? (Round your answer to 6 decimal plac..

  Bond yield plus risk premium estimate-cost of comman equity

Barry's common stock is currently selling for $50 a share. Its last dividend was $4.19, and dividends are expected to grow at a constant rate of 5% in the foreseeable future. What is Barry's estimated cost of common equity based on the CAPM approach?..

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