T is ordinary shareholder or not. Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

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Answer 1

Question

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

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(d) Estimate the value of a share of Cisco common stock using the discounted cash flow (DCF) model as of July 27, 2019 using the following assumptions Assumptions Discount rate (WACC) Common shares outstanding 7.60% 5,029.00 million Net nonoperating obligations (NNO) $(8,747) million NNO is negative, which means that Cisco has net nonoperating investments CSCO ($ millions) DCF Model Reported 2019 Forecast Horizon 2020 Est. 2021 Est. 2022 Est. 2023 Est. Terminal Period Increase in NOA FCFF (NOPAT - Increase in NOA) $ 1241 1303 1368 10673 11207 11767 1437 $ 12354 302 ✓ Present value of horizon FCFF 9918 9679 9445 ✔ 0 × Cum. present value of horizon FCFF $ 0 × Present value of terminal FCFF 0 ☑ Total firm value 0 ☑ NNO -8747 ✓ Firm equity value $ 0 ☑ Shares outstanding (millions) 5029 Stock price per share $ 40.05

Answer 2

Question

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

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Answer 3

Question

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

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Answer 4

Question

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

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Answer 5

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

Answer 6

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

Answer 7

Chapter 1, Problem 10Q

(a)

Summary Introduction

To explain: T is ordinary shareholder or not.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

Answer 8

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

Answer 9

(b)

Summary Introduction

To explain: The manager should vote its shares or should pass those votes on a pro-rata basis, back to its own shareholders.

Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 1 - What is a firms intrinsic value? Its current stock...Ch. 1 - When is a stock said to be in equilibrium? Why...Ch. 1 - Prob. 3Q Ch. 1 - Prob. 4Q Ch. 1 - Prob. 5Q Ch. 1 - Prob. 6Q Ch. 1 - Should stockholder wealth maximization be thought...Ch. 1 - Prob. 8Q Ch. 1 - The president of Southern Semiconductor...Ch. 1 - Prob. 10Q

T is ordinary shareholder or not. Direct Stockholder’s Intervention: Most of the shares are owned by institutional investors such as insurance companies pension funds, and rather than individual. These institutional investor control over the firm’s operation and oversee the management operation.

Solution Summary: The author explains that the manager should vote its shares or pass those votes on a pro-rata basis, back to its own shareholders.

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