1. What are some distinct differences between Net Income, as it appears in corporate financial statements, and NOPLAT?Name at least 2and explain why they need to be reconciled to determine a firm's NOPLAT.
2. When determining terminal value:

What are the constraints on the growth rate

Can a growth rate be negative and what impact would that have on firm value?

3.In estimating market returns and risk free rates to be used in Cost of Capital calculations, what are some of the issues with both (1)historical ratesand (2)projected returns?

4.Using the DCF approach indeterminingavaluingfora firm relies on the idea that the enterprise will continue as will the cash flows. When attempting to value an early growth stage company or, alternatively,if you know there is a significant chance that the enterprise will not make it as a viable entity, what can you do to adjust for this uncertainty in your valuation model?

5.Many US Corporations today have global reach and have operations in multiple countries and therefore engage in transactions in different currencies and in different foreign capital makets. Which risk-free rate should you use to value a company? Provide an example to help support your answer.

6.Stable Co had a net income per share of $3.25 last year and is set to maintain its 3% growth rate for the foreseeable future. They currently pay 4% on their debt portfolio of $12 billion. Their WACC is 7.5%, tax rate is 25% and total Invested Capital is $25 billion.

1. How much money does stable Co have to invest annually to maintain its 3% growth rate?
2. What is Stable Co worth per share?

7.Give threespecificexamples of reasons why a firm may have a higher market valuation that would be calculated by financial models.?