1. What is FCF? Why is it important? 2. What are operating current assets? 3. What are...
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Question:
- 1. What is FCF? Why is it important?
- 2. What are operating current assets?
- 3. What are the limitations of Ratio Analysis?
- 4. Joe Stuart, a 10-years old boy was given $100 as birthday present by his grandmother. He wanted to make a fortune out of it than spending it. He was advised to invest his money in the bank that pays 6% per year. He is interested to know how long will it take for him to double that amount. Help him.
- 5. What is the Price of a bond that matures in 12 years and has a 8% coupon rate? Assume face value = $1000 and it has a YTM of 7%.
- 6. What is the YTM or Rd of a bond that matures in 20 years and has a 10% coupon rate? Assume face value = $1000 and it is selling at a Price of $1050.
- 7. Differentiate between stand alone risk, Market (portfolio) risk and diversifiable risk
- 8. How do we measure the amount of market risk that an individual stock brings to a well-diversified portfolio and the return required by investors?
- 9. What are the three ways of valuing common stock?
- 10. Estimate the intrinsic value of equity and stock price per share given the following information
- FCF0 = $62 million
- WACC = 9%
- FCF is expected to grow at a constant rate of gL = 5%
- Short-term investments = $100 million
- Debt = $200 million
- Preferred stock = $50 million
- Number of shares =n = 10 million
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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