Problem 11 Intro Your boss wants you to value Microsoft common stock. Microsoft's market capitalization rate...

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Problem 11 Intro Your boss wants you to value Microsoft common stock. Microsoft's market capitalization rate is 12%. Part 1 Attempt 1/10 for 10 pts. Using historical data from Yahoo Finance ("Historical prices"), what was the quarterly growth rate of dividends during 2013 (start of Nov. 2012 to end of Nov. 2013)? 3+ decimals Submit Part 2 What is Microsoft's quarterly discount rate? 4+ decimals Submit Attempt 1/10 for 10 pts. Part 3 BAttempt 1/10 for 10 pts. What is Microsoft's intrinsic value according to the DDM formula, if you think that dividends will forever grow at the same rate as during 2013, and if we are in late November 2013? 1+ decimals Submit Attempt 1/10 for 10 pts. Part 4 Your boss thinks that this growth rate will last only for 3 quarters, and that growth will then settle down at half the previous value forever. What is Microsoft's intrinsic value, given the assumption of your boss? 0+ decimals Submit Problem 16 Intro It is December 2023. You work as a financial analyst for Merck & Co. and are tasked with the due diligence on the proposed acquisition of a biotech startup. You estimated the following cash flows for the startup: Year 0+ decimals 2024 2025 Submit 2026 2027 2028 After 2028, cash flows are expected to grow by 4% per year. Based on the riskiness of your industry, you think that your weighted average cost of capital is 12%. The biotech firm has 5 million shares and bonds worth $120 million outstanding. Expected free cash flow to the firm ($ million) (end of year) 67.5 101.25 131.63 157.95 173.75 Attempt 1/10 for 10 pts. Part 1 What is the terminal value, i.e., the present value of all free cash flows from 2029 to infinity expressed in 2028-dollars (in $ million)? Part 2 What is the total value of the company (in $ million)? 0+ decimals Submit 0+ decimals Attempt 1/10 for 10 pts. Part 3 What is the intrinsic value per share of common stock (in $)? Submit Attempt 1/10 for 10 pts. Problem 11 Intro Your boss wants you to value Microsoft common stock. Microsoft's market capitalization rate is 12%. Part 1 Attempt 1/10 for 10 pts. Using historical data from Yahoo Finance ("Historical prices"), what was the quarterly growth rate of dividends during 2013 (start of Nov. 2012 to end of Nov. 2013)? 3+ decimals Submit Part 2 What is Microsoft's quarterly discount rate? 4+ decimals Submit Attempt 1/10 for 10 pts. Part 3 BAttempt 1/10 for 10 pts. What is Microsoft's intrinsic value according to the DDM formula, if you think that dividends will forever grow at the same rate as during 2013, and if we are in late November 2013? 1+ decimals Submit Attempt 1/10 for 10 pts. Part 4 Your boss thinks that this growth rate will last only for 3 quarters, and that growth will then settle down at half the previous value forever. What is Microsoft's intrinsic value, given the assumption of your boss? 0+ decimals Submit Problem 16 Intro It is December 2023. You work as a financial analyst for Merck & Co. and are tasked with the due diligence on the proposed acquisition of a biotech startup. You estimated the following cash flows for the startup: Year 0+ decimals 2024 2025 Submit 2026 2027 2028 After 2028, cash flows are expected to grow by 4% per year. Based on the riskiness of your industry, you think that your weighted average cost of capital is 12%. The biotech firm has 5 million shares and bonds worth $120 million outstanding. Expected free cash flow to the firm ($ million) (end of year) 67.5 101.25 131.63 157.95 173.75 Attempt 1/10 for 10 pts. Part 1 What is the terminal value, i.e., the present value of all free cash flows from 2029 to infinity expressed in 2028-dollars (in $ million)? Part 2 What is the total value of the company (in $ million)? 0+ decimals Submit 0+ decimals Attempt 1/10 for 10 pts. Part 3 What is the intrinsic value per share of common stock (in $)? Submit Attempt 1/10 for 10 pts.

Answer rating: 100% (QA)

ANSWER Problem 11 Part 1 To calculate the quarterly growth rate of dividends during 2013 we need to find the dividend values at the start and end of the period and then calculate the growth rate From ... View the full answer