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Comcast is considered a comparable Company to AT&T. It has a P/E ratio of 12.78. Based on that alone, which looks to be a better stock buy?
a) AT&T
b) Comcast
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- The stock market data is given in the following table. Correlation Coefficients Telmex Telmex Mexico World 1.00 Mexico World SD (%) R (%) 1.50 1.00 18 ? 1.00 1.20 15 14 1.00 10 12 The above table provides the correlations among Telmex, a telephone or communication company located in Mexico, the Mexico stock market index, and the world market index, together with the standard deviations (SD) of returns and the expected returns ( R ). The risk-free rate is 7%. Required: Suppose the Mexican stock market is segmented from the rest of the world. Using the CAPM paradigm, estimate the equity cost of capital of Telmex. Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Equity costThe weights that Genghis should apply in estimating Bulldogs Inc.’s cost of capital for debt and equity are, respectively: a. wd = 0.200; we = 0.800. b. wd = 0.223; we = 0.777 c. wd = 0.100; we = 0.850 d. wd = 0.185; we = 0.815.XYZ Corp. has a debt to equity ratio of 0.5, an equity beta of 1.5, and its debt is risk-free. What is the beta of the firm’s operating assets?
- After researching the competitors of EJH Enterprises, you determine that most comparable firms have the following valuation ratios: E. EJH Enterprises has EPS of $1.80, EBITDA of $290 million, $28 million in cash, $45 million in debt, and 105 million shares outstanding. What range of prices is consistent with both sets of multiples? ..... The range of prices will be: Lowest price within both ranges, the P/E and EV/EBITDA ranges, is $ . (Round to two decimal places.) Highest price within both ranges, the P/E and the EV/EBITDA ranges, is $ (Round to two decimal places.)The calculation of WACC involves calculating the weighted average of the required rates of return on debt and equity, where the weights equal the percentage of each type of financing in the firm's overall capital structure. re . has $3.9 million of debt, $1 million of preferred stock, and $1.2 million of common equity. What would be its weight on preferred stock? Ip Is is the symbol that represents the before-tax cost of debt in the weighted average cost of capital (WACC) equation. rd 0.13 0.64 0.16 0.14Give typing answer with explanation and conclusion Fama's Llamas has a weighted average cost of capital of 11.5 per cent. The company's cost of equity is 16 per cent, and its cost of debt is 8.5 per cent. The tax rate is 35 per cent. What is Fama's debt–equity ratio?
- (b) Use Allscripts Healthcare and McKesson as comparables, along with the price to NOA ratios from part a, and then estimate for Cerner its company intrinsic value, its equity intrinsic value, and its equity intrinsic value per share. (Round the intrinsic value and equity intrinsic value to the nearest million and the value per share to the nearest cent.)Average of the two rounded ratios in (a) aboveAnswer (Round to two decimal places.) Using the rounded average calculation above, calculate the following:Intrinsic valueWilson Corporation has a return on equity of 27% and Jensen Corporation has a return on equity of 8% Both companies are in the same industry, have similar sales, long term debt and have stock buyback programs in place. All else being equal, which of the following is true? A Wilson has acquired Much More stock than Jensen B Jensen has acquired much more stock than Wilson C Jensen has lower operating expenses than Wilson D Wilson has higher operating expenses than Jensen← After researching the competitors of EJH Enterprises, you determine that most comparable firms have the following valuation ratios: EJH Enterprises has EPS of $2.00, EBITDA of $300 million, $27 million in cash, $42 million in debt, and 104 million shares outstanding. What range of prices is consistent with both sets of multiples? + The range of prices will be: Lowest price within both ranges, the P/E and EV/EBITDA ranges, is $. (Round to two decimal places.) Highest price within both ranges, the P/E and the EV/EBITDA ranges, is $. (Round to two decimal places.)
- None3. Industry A consists of four firms, each of which has an equal share of the market. a. Compute the Herfindahl-Hirschman index for the industry. b. Industry B consists of 10 firms, each of which has an equal share of the market. Compare the Herfindahl-Hirschman Indexes for the two industries. c. Now suppose that there are 100 firms in the industry, each with equal shares. What is the Herfindahl-Hirschman index for this industry? d. State the general relationship between the competitiveness of an industry and its Herfind- ahl-Hirschman index.You are considering a sector-neutral value factor strategy where you buy the cheapest stocks (lowest P/Z) and short-sell the most expensive stocks (highest P/Z) within an industry. Stocks are value weighted on both the long and the short side. In this case, O A. You are overweighting certain industries and underweighting other industries (relative to the market portfolio) depending on the average P/Z ratio of that industry. O B. The weight invested in each industry is (roughly) proportional to the weight of that industry in the market portfolio. O. You are overweighting certain industries and underweighting other industries (relative to the market portfolio) depending on the %earnings growth rate of that industry. O D. Each industry receives equal weight O E. You are overweighting small stocks relative to large stocks the market portfolio.
