1. 1. What is FCF? Why is it important?

1. 2. What are operating current assets?

1. 3. What are the limitations of Ratio Analysis?

1. 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.

1. 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%.

1. 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.

1. 7. Differentiate between stand alone risk, Market (portfolio) risk and diversifiable risk

1. 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?

1. 9. What are the three ways of valuing common stock?

1. 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 g_L = 5%

- Short-term investments = $100 million

- Debt = $200 million

- Preferred stock = $50 million

- Number of shares =n = 10 million

Answer rating: 100% (QA)

1 What is FC F Why is it important ANS WER FC F stands for Free Cash Flow It is a measure of a company s ability to generate cash flow from its operations after accounting for capital expenditures FC ... View the full answer