Discount model rather than free cash flow model

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Reference no: EM132015591

1. You are given the following yields: 6-month T-Bills yield 5% 12-month T-Bills yield 6% 10% T-Notes maturing in 18 months yield 6.5% 8% T-Notes maturing in 24 months yield 6.8% 9% T-Notes maturing in 30 months yield 7.2% Please find the zero-coupon rates for 6, 12, 18, 24, and 30 mPeriods of financial distress are most associated with:

A) continued increases in earnings.

B) steady growth.

C) dividend reductions.

D) increasing growth rates.

E) decreasing production costs.onths. Express your answers as annual percentage rates with 3 digits after the decimal point.

2. In what circumstances would you choose to use a dividend discount model rather than a free cash flow model to value a firm? Why?

3. During the last year, Sigma Co had net income of $148, paid $16 in dividends, and sold new stock for $35. Beginning equity for the year was $620. Ending equity was?

Reference no: EM132015591

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