Corporate Finance Quiz 9 Solution

Weekly Quiz #9Name ______________________________ BA 4310-001 utilize Corpo regularize pay October 17, 2012 QUIZ INSTRUCTIONS All questions are multiple-choice or T-F. Please circle the ready 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 corpo reckon valuation model discounts salvage change lessenings by the unavoidable return on equity. c.The corpo gait valuation model tummy be used to stick the quantify of a division. d.An of the essence(p) step in applying the corporate valuation model is forecast the pro forma financial statements. e.Free silver scarpers must grow at a constant rate in order to find the horizon, or terminal, value. [ii].Which of the following is not al focal points a way to increase the value of a company? a.In crease the growth rate of sales. b.Increase the in operation(p) profitability (NOPAT/Sales). c.Decrease the crownwork 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 bills 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 authoritative value of operations, to the nearest billion? a. $530 million b. $4,54 5 million 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 study a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay