Question: PLEASE SEE QUESTION ATTACHED! a. Suppose you believe KCP's initial revenue growth rate will be between 4 %and 11 %(with growth slowing in equal steps
PLEASE SEE QUESTION ATTACHED!
a. Suppose you believe KCP's initial revenue growth rate will be between 4 %and 11 %(with growth slowing in equal steps to 4 %by year 2011). What range of share prices for KCP is consistent with these forecasts?(Select the best choice below.)
A.
The range of share prices consistent with these forecasts is from $ 26.94to $ 21.11.
B.
The range of share prices consistent with these forecasts is from $ 19.46to $ 24.10.
C.
The range of share prices consistent with these forecasts is from $ 18.57to $ 26.12.
D.
The range of share prices consistent with these forecasts is from $ 24.42to $ 23.59.
b. Suppose you believe KCP's EBIT margin will be between 7 % and 10 % of sales. What range of share prices for KCP is consistent with these forecasts (keeping KCP's initial revenue growth at 9 % with growth slowing in equal steps to 4 % by year 2011)???(Select the best choice below.)A.The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11.B.The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.C.The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.D.The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.
c. Suppose you believe KCP's weighted average cost of capital is between 10 % and 12 %. What range of share prices for KCP is consistent with these forecasts (keeping KCP's initial revenue growth and EBIT margin at 9 % with growth slowing in equal steps to 4 % by year 2011)???(Select the best choice below.)A.The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.B.The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.C.The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.D.The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11. d. What range of share prices is consistent if you vary the estimates as in parts (a), (b), and (c) simultaneously? That is:
| Case 1 | Case 2 | |
| Revenue growth rate | 4 % |
11 %
| * | |
| EBIT margin | 7 % |
10 %
| WACC | 10 % |
12 %(Select the best choice below.)A.The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.B.The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11.C.The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.D.The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.
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