8. Suppose that the market value of equity for a particular private equity fund at the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
8. Suppose that the market value of equity for a particular private equity fund at the beginning of our three-year period of analysis is $527 million. During the first year, they have a cash distribution of $11 million, and they raise an additional $175 million. All $175 million is used to buy properties. The market value of equity at the end of the first year is $730 million. What is the rate of return for year 1 of our period of analysis? b. Assume the rate of return in year 2 is 3.7% with a cash distribution of $12 million, and the rate of return in year 3 is 10.9% with a cash distribution of $15 million. This results in a market value of equity at the end of our period of analysis of $1,155. Compute the overall IRR and the time-weighted return. a. 8. Suppose that the market value of equity for a particular private equity fund at the beginning of our three-year period of analysis is $527 million. During the first year, they have a cash distribution of $11 million, and they raise an additional $175 million. All $175 million is used to buy properties. The market value of equity at the end of the first year is $730 million. What is the rate of return for year 1 of our period of analysis? b. Assume the rate of return in year 2 is 3.7% with a cash distribution of $12 million, and the rate of return in year 3 is 10.9% with a cash distribution of $15 million. This results in a market value of equity at the end of our period of analysis of $1,155. Compute the overall IRR and the time-weighted return. a.
Expert Answer:
Related Book For
Microeconomics Theory and Applications
ISBN: 978-1118758878
12th edition
Authors: Edgar K. Browning, Mark A. Zupan
Posted Date:
Students also viewed these finance questions
-
Give an example of how Modern Sheds structure enables fast response to rapidly changing market opportunities.
-
Consider an interest rate model following the stochastic differential equation: dri = Odt + odW, where 0 and o are both constants. Determine (a) (b) T E re dt V Tt dt
-
About Engel Expansion (If apply) a) The DE from which the function came from? b) The method that yields the function c) Graph of the function.
-
Two popular methods of financial statement analysis are horizontal analysis and vertical analysis. Explain the difference between these two methods. Discuss.
-
x-bar = 24, s = 4, n = 15, H0: = 22, Ha: > 22 We have provided a sample mean, sample standard deviation, and sample size. In each case, use the one-mean t-test to perform the required hypothesis...
-
What are the indices for the directions indicated by the two vectors in the sketch below? +z Direction 1 0.4 nm >+y 0.3 nm -0.5 nm +x Direction 2
-
Why are communications between a lawyer and the client subject to the lawyer-client privilege?
-
A challenge facing auditors is the wide array of professional guidance available to them in the audits of different types of entities. Required: a. Describe Statements on Auditing Standards, Interim...
-
Required information [The following information applies to the questions displayed below.] Cardinal Company is considering a five-year project that would require a $2,805,000 investment in equipment...
-
In July 2006, Tata Motors, an Indian auto maker, and Fiat Auto, an Italian automaker, announced their intention to form a joint venture to produce passenger cars, engines, and transmissions in India....
-
* SHOW ALL WORKING OUT ON EXCEL Again, the original information regarding IIP's has been repeated below. - Customers pay \( \$ 923.92965978084 \) to buy an IIP. - The IIP will pay out \( \$ 48 \) at...
-
Hertzbach Enterprises elects accelerated depreciation for tax purposes but straight-line for GAAP financials. In its first year of operations in 2022. Hertzbach's pretax financial income was...
-
Make a Website Using Html, Css and J avascript (ifneeded). index.html : footer : When click Top Up Button in index then href toml.html : Note : It doesn't Matter If It's Not TooSimilar Jolly Max...
-
It was decided during 2021 to change the method of valuation from WACC to FIFO. The change in the accounting policy has been accounted for in the current year The raw material inventories have been...
-
If the typical CEO of a large U.S. corporation clocks in at 9 am on January 2, by 3:37 pm that afternoon he'll have earned $58,260 the average annual salary for all U.S. occupations. In other words,...
-
Use the Following Information to Answer the Questions Below. Our Business had the Following Costs and Balances For the Year Ended December 31st, Begin Raw Materials=$22,000 Raw Materials...
-
7. Consider a 160-day forward con- tract on an asset priced at $135. The asset generates cash flows of $1.50 in 40 days and $1.75 in 120 days. It in- curs storage costs of $1.25 in 60 and 120 days,...
-
Find the area of the surface generated by revolving the para- metric curve x = cos 1, y = sin? 1 (0 < I sa/2) about the y-axis.
-
Calculate the Lerner index for the monopoly described in Question 11.14. How would the value of this index change when the tax described in Question 11.15 is imposed on the monopolist? If the subsidy...
-
Assume that the marginal cost to a grocery of selling a bottle of salad dressing to customers who use coupons versus those who dont is identical and equal to $ 1.50. If the elasticity of demand of...
-
Marin County Enterprises has a monopoly on the production of lunar-powered homes and has the normal U-shaped average cost curve. At its present profit-maximizing output and price, it is able to earn...
-
What is the average rate of return for the values that follow? 0.90, 1.1, 1.2
-
What is the average rate of return for the values that follow? 0.80, 2.0, 5.0
-
State whether the data are symmetrical, skewed to the left, or skewed to the right. 16; 17; 19; 22; 22; 22; 22; 22; 23
Study smarter with the SolutionInn App