C X ✓ fx тегат го гопти income тен Year EBIT Tax Net Income Dep and Amort OCF PV of planning period Perpetual growth terminal value PV of terminal value Enterprise value (V) E (=V-D) assume in thousands of dollars Planning period H J K M Assumptions 2014 2015 2016 2017 2018 2019 WACC = 5% 398 447 508 567 624 669 LT growth rate = 5.3% 151.24 169.86 193.04 215.46 237.12 254.22 MV of debt = 246.76 277.14 314.96 351.54 289 317 339 535.76 594.14 653.96 345 696.54 386.88 353 414.78 Tax RATE = 369 739.88 783.78 1 +
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- Q¹13:19 M O - Fnan301FinalExamFall2...ba1995f96f6315dff9f7 5 ii) Capital gains yield iii) Total rate of return (yield) 4. Based on the following information Calculate State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Recession 0.20 0.05 -0.17 Normal 0.55 0.08 0.12 Вoom 0.25 0.13 0.29 a) The expected return of Stock A (7.5 points) b) The expected return of Stock B (7.5 points) c) The expected return of Portfolio where you invest $35,000 in Stock A and $45,000 in Stock B (5 points) d) Suppose Stock A has a beta of 0.8 and Stock B has a beta of 1.3. If you invest $35,000 in Stock A and $45,000 in Stock B, what is the beta of this portfolio? (5 points) e) Expected return on the market (RM) is 10% and the risk-free (rr) is 4%. What must the the expected return on the portfolio according to CAPM? (Use the beta you have calculated in section d) for CAPM) (5 points) ||Topic: Multiplier MACRO
- Calculate the HPR of the following investment, entered as a percentage (Example: if your answer is 14.5%, enter 14.5 and not 0.145) Period Cashflow 0 -14100 1 3300 2 3300 3 3100 4 2800Consider the following information related to an investment: T t+1 10000, || t+2 rt 5%; re = 4%, || || t+1 8 = 4% Find the present value of expected profits. 18663 18700 18500 18315What is the standard deviation of asset M?
- 6 Suppose Blooper's financials are as follows: See SPREADSHEET 9.1 Inputs Initial Investment Salvage value Initial revenue Initial expenses Inflation rate Discount rate ok Acct receivable as % of sales Investment as % of expenses Tax rate 150 Spreadsheet Name Investment 20 Salvage 150 Initial revenue 100 Initial expenses 5.0% 1.1% 1/4 15.0% 21.0% Inflation Discount rate AR Inv_pct Tax rate Calculate Blooper's working capital in each year of its project. Year Working Capital 0 1 23 4 5 6 COAsset M Asset N j P?? Return, ?? P?? Return, ?? 1 0.25 10% 0.15 10% 2 0.25 -6% 0.30 8% 3 0.15 2% 0.20 15% 4 0.20 5% 0.05 0% 5 0.15 20% 0.30 -2% Calculate the expected value of return, ?̅, for each of the two assets. Which provides the largest expected return? Calculate the standard deviation, ?? , for each of the two assets’ returns. Which appears to have the greatest risk? Calculate the portfolio expected return if you invest 27% of your wealth in M and 73% inN, of your total wealth of $40,000.How to find the minimum certainty equivalent adjustment? PV cash flow at 10% PV: 122,891 Net: 2,891 i: 10