Reference no: EM132875007

Respond appropriately with a good format

1. Which capital structure should we consider when calculating the WACC for subsidiary valuation: the one that is reasonable according to the risk of the subsidiary's business, the average of the company or the one subsidiary "tolerates /permit"?

2. The dividend is the part of income that that the company distributes to shareholders. ) As dividends represents real, the net income is also real money. Is that true?

3. The part of income that is not distributed to shareholders goes to reserves (shareholders equity) as dividends represents real money, reserves are also real money. Is that true?

4. Does the shareholders equity represents the savings accompany as accumulated through the years?

5. Is book value the best proxy to the value of the shares?

6. Is evaluation realized by a prestigious investment bank scientifically approved which any investor could use as reference?

7. Is it possible for accompanied with positive net income and which does not distribute dividends to find itself in suspension of payments?

8. They are four ways accompany can use the money it generates: a)buying other companies or assets; b)reducing its debt; c)distribute it to shareholders, and d)increasing its cash holdings. What other reasonable thing can it do?

9. Assuming a company wishes to distribute its money to shareholders, is it better to distribute dividends or to repurchase shares?

10. Is the price of futures the best estimate of the $ exchange rate?

11. How could we obtain indisputable discount rate? How could we calculate the beta and risk premium?

12. My company paid an extremely high price for the acquisition of another company; the price was recommended by the valuation of an investment bank. We now have financial problems. Is there any way to make the company legally responsible for this financial situation?