Question: Flag question : Question 11 Question 112 pts Para Co. is reviewing the following data relating to an energy saving investment proposal: Cost P50,000 (nondepreciable

Flag question : Question 11 Question 112 pts Para Co. is reviewing the following data relating to an energy saving investment proposal: Cost P50,000 (nondepreciable Residual value at the end of 5 years 10,000 Present value of an annuity of 1 at 12% for 5 years 3.60 Present value of 1 due in 5 years at 12 0.57 What would be the annual savings needed to make the investment realize a 12% yield assuming that Para will not realize the residual value at the end of year 5? Flag question : Question 12 Question 122 pts Alexa Co. is the value of its equity given the following information: Government risk-free rates today stands at 4.5% Alexa is expected to declare dividends amounting to Php10.00 next year Dividends are expected to grow at 20% per year until year 5 and stabilizes at 4% beginning year 6 onwards Beta is currently estimated at 2.0 Equity risk premium is estimated at 4% How much is the terminal value of the dividends at year 5? Flag question : Question 13 Question 132 pts Little Lemon Co. is identifying the value of its equity using the enterprise value approach as they have never issued dividends to-date because the Company is still at its early stages. With this, they have the following available information: The government's real free rate for its debt securities is estimated at 3.5% with an estimated inflation premium of 1.5 %. The target capital structure of Little Lemon is at 60% debt and 40% equity Little Lemon was able to determine that its cost of debt is estimated as: With 3 years maturity - 6.50% With 4 years maturity - 7.0% With 5 years maturity - 8.0% The following are the information about the current debts issued by Little Lemon A 3-year maturity instrument carries a Php500,000 face value and 8.0% coupon A 5-year maturity instrument carries a Php500,000 face value and 8.0% coupon Considering the current crisis, equity investors generally demand a 3.5% premium over government securities Little Lemon's estimated beta is at 1.2 What is the equity risk premium of Little Lemon ? Flag question : Question 14

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