Reference no: EM132820836

QUESTION 1:

a). As my company is not listed, the investment banks apply illiquidity premium .Actually, they say it as an illiquidity premium but then they called it asmall cap premium. One of the banks, apparently based on Titman y Martin (2007) , addede the following small gap premiums; "0.91% if the capitalization is situated between $1, 167 and $ 4,794 million ;1.70% if the capitalization is between $331 and $ 1,167million .;4.01% if it is lower than that of abig companies . which one is more appropruaete?

b). Which taxes do I have to use when calculating the free cash flow (FCF )it is the marginal tax rate or the medium tax rate of the leveragd company?

c). According to what I read in abook , market efficiency hypothesis implies that the expected average value of variations in the shares is zero . Therefore , the best estimate of the future price today, as it incorporates all the available information . is that right?

d). An investement bank calculated my WACC . The report says:the definition of the WACC is WACC =RF+Bu(RM-RF); being the risk free rate ". This is different from what we have seen in our class. Are they right?

e). I read in the sentence passed by the supreme court that, in ordr to value companies, economic doctrines lies in intermediary method between the practical models and the 'Anglo- Saxon' theorithical models common in the united states and the united Kingdom , and the criteria set by the administration in the result of combination of both mehods. This is completely different from what we have seen in class - is it correct?

QUESTION 2

i).  Did you see the vueling case?how is it possible that an investment bank set the objective price of its shares in E2.50 per share on the 2nd of October of 2007 , just after placing vuelling shares E31 per share in june 2007?

ii). I supposed that avaluation consciously realized in my name tells me how much I have to offer for the company , right?

iii). Do expected equity flows coincide with expected dividends?

iv). What is the difference between simple return and weighted return to shareholders?

v). Is there any indisputable model to value the brand of accompany?