Question: Time Left : 0 1 : 5 9 : 3 1 As a junior financial analyst at Citibank bond trading desk, John is analyzing the

Time Left : 01 : 59 : 31 As a junior financial analyst at Citibank bond trading desk, John is analyzing the forward rate using the information from zero coupon bonds. Suppose 4year zero coupon bond is priced at $ 839.60and 5year zero coupon bond is priced at $ 822.80. Choose all correct answers. Please note that each incorrect answer will reduce the score by 10%. The 4year zero coupon bond which is priced at $ 839.60will have a YTM of 4.468%. The 5year zero coupon bond which is priced at $ 822.80will have a YTM of 3.978% The forward rate from year 4to 5is 2.042% The 3year zero coupon bond which is priced at $ 839.60will have a YTM of 7%. The 3year zero coupon bond which is priced at $ 839.60will have a YTM of 8%. The 4year zero coupon bond which is priced at $ 822.80will have a YTM of 6% The 4year zero coupon bond which is priced at $ 822.80will have a YTM of 7% H .The forward rate from year 4to 5is 3.04% I. The forward rate is from 4to 5is 4.04% Please do it correctly and quick!
Active Gear, Inc. ( AGI ),a privately held footwear company is trying to acquire Mercury Athletic currently a unit of West Coast fashion. Mercury Athletic is not part of the core business of West Coast fashion and West coast is trying to sell Mercury Athletic as part of its reorganization plan. Active Gear is trying to grow its business and market share. Mercury may be a good asset for AGI to acquire. Before AGI makes the decision to acquire Mercury, it needs to value this asset. AGI has hired you as their advisor / consultant to help them in the valuation and give your recommendation based on your valuation. Therefore, this case is about valuation of a target asset with detailed estimation of each component of FCF and Cost of Capital. Question: Estimate the value of Mercury using DCF and Liedtke base case projections. Clearly explain any additional assumptions you made for the valuation. Make your assumptions based on all the information you have been given in the case and not just restricting to what Liedtke may have assumed. Note: Do the quantitative analysis using the Excel spreadsheet. Please attach spreadsheet showing your analysis and not hard coding the numbers

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