Marking Scheme: 4380 Spring 2022 Final Exam [Write your answer

in the boxes belowl

Task 1:

Value of firm depends on FF, risk, and growth. In your

analysis of Corp Hitam, you find the average growth rate

over the past 5 years: Assets about 25%, Sales about 15%.

Assuming FF and risk remained unchanged. The value of

this firm likely to increase/decrease and why?

[Word limit: 50 words]

Type your answer below:

Max:

25

Marks

Task 2:

Should we accept a project with NPV = 0 and why?

[Word limit: 50 words]

Type your answer below:

Max:

25

Marks

Task 3:

Why cost of equity (k) is always higher than the growth

rate?

[Word limit: 50 words]

Type your answer below:

Max:

25

Marks

Task 4:

MAY

honie

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