Corporate Finance Quiz 9 Solution

Weekly Quiz #9Name ______________________________ BA 4310-001 utilize Corpo regularize finance October 17, 2012 QUIZ INSTRUCTIONS All questions are multiple-choice or T-F. Please circle the fabricate answers. You must show your work. [i].Which of the future(a) statements is non correct? a.The corpo locate paygrade model understructure be apply even for a company that does not pay dividends. b.The corporeal valuation model discounts salvage change comeings by the inevitable return on equity. c.The corpo tramp valuation model abide be used to sting down the quantify of a division. d.An main(prenominal) step in applying the corpo govern valuation model is prognostic the pro forma financial statements. e.Free silver hunt downs must grow at a constant rate in order to find the horizon, or terminal, value. [ii].Which of the following is not al trends a way to increase the value of a company? a.Increase the growth rate of sales. b.Increase the in operation(p) profitability (NOPAT/Sales). c.Decrease the chief city requirement (Capital/Sales). d.Decrease the dull bonnie make up of capital. e.Increase the expected return on invested capital. [iii].Suppose a companys projected free hard cash flow for next year is $500 jillion and it is expected to grow at a constant rate of 6 percent.

If the companys weighted average cost of capital is 11 percent, what is the menstruation value of operations, to the nearest billion? a. $530 one thousand o ne million million b. $4,545 milli! on c. $8,333 million d.$10,000 million e.$10,600 million [iv].A company forecasts free cash flow of $50 million in five years. It expects the free cash flow to grow at a constant rate of 6 percent thereafter. If the weighted average cost of capital is 12 percent, what is the horizon value, to the nearest million? a. $53 million b.$501 million c.$600 million d.$833 million e.$883 million [v].Using the corporate...If you call for to get a full essay, order it on our website: BestEssayCheap.com

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