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New York University *
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Course
110
Subject
Finance
Date
Nov 24, 2024
Type
png
Pages
1
Uploaded by AgentEnergy11479
40.
The
risk-free
rate
is
2.5%
and
the
market
risk
premium
is
9.57%.
A
stock
with
a
B
of
1.72
just
paid
a
dividend
of
$2.81.
The
dividend
is
expected
to
grow
at
24.83%
for
three
years
and
then
grow
at
4.94%
forever.
What
is
the
value
of
the
stock?
o
.025+(1.72)(.0957)
=
.1896
;
D1
=2.81
x
1.2483
=
3.5077
;
D2
=
3.5077
x
1.2483
=4.3787
;
D3
=
4.3787
x
1.2483
=
5.4659
;
p_
=
D3R(:g)
=
2222222
=
37.8247
CHECK
THIS
;
NPV
=
31.7581
%
PS30
1.
Caspian
Sea
Drinks
is
considering
buying
the
J-Mix
2000.
It
will
allow
them
to
make
and
sell
more
products.
The
machine
cost
$1.78
million
and
created
incremental
cash
flows
of
$818,882
each
year
for
the
next
five
years.
The
cost
of
capital
is
8.32%.
What
is
the
net
present
value
of
the
J-Mix
20007?
o
NPV
=11,452,167.5
2.
Caspian
Sea
Drinks
is
considering
buying
the
J-Mix
2000.
It
will
allow
them
to
make
and
sell
more
products.
The
machine
cost
$1.87
million
and
created
incremental
cash
flows
of
$456,164
each
year
for
the
next
five
years.
The
cost
of
capital
is
10.09%.
What
is
the
internal
rate
of
return
for
the
J-Mix
20007
o
NPV
=1500,528.27
3.
Caspian
Sea
Drinks
is
considering
buying
the
J-Mix
2000.
It
will
allow
them
to
make
and
sell
more
products.
The
machine
cost
$1.88
million
and
created
incremental
cash
flows
of
$606,674
each
year
for
the
next
five
years.
The
cost
of
capital
is
9.78%.
What
is
the
profitability
index
for
the
J-Mix
20007
o
Pl
=-2eLEE
-
4
01
Initial
Cost
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