Calculate UTX's weighted average cost of capital (WACC) for 2012. Use a cost of debt of 5.0%, an effective tax rate of 24.76%, a risk-free rate of 1.723%, a beta of 1.0565 and a market risk premium of 7.0%.
Answer to relevant QuestionsCalculate UTX's economic value-added (EVA) for each year 2010-2012. Use the NOPAT you calculated in problem 27 and the WACC you calculated in problem 31 for each year's EVA calculation. What sort of valuable information can an analyst infer by comparing the average annual growth rates (CAGRs) of revenues, EBIT, NOPAT, EPS and DPS? Manipulate the WACC and long-term growth forecasting assumptions for Amazon on the chapter spreadsheet's Financial Analysis & Valuation worksheet (cells B147-F157). Use these modeling inputs to estimate the fair value of the ...Explain the importance of the perpetual growth rate in discounted free cash flow and discounted dividends valuation model. If a firm has clearly improved its customers' value chain in one or more ways, can we take this as evidence of a clear competitive advantage?
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