What is the modified internal rate of return (MIRR) of the below project? Answer in the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
What is the modified internal rate of return (MIRR) of the below project? Answer in the decimal format (e.g. 10.52% is 0.1052) with 4 decimals. If the answer is negative, place a leading hyphen "-" to indicate so. Do NOT use commas in your answer. The relevant cash flows are listed by period. The WACC is 8%. The assumed reinvestment rate is 7%. Perio Cash Flow d 0 1 2 3 -889 137 -347 722 As the current CFO, you are responsible for presenting the dividend policy decisions to the Board of Directors at fiscal year end. You are preparing to present to the Board tomorrow at the annual meeting. You are considering increasing the historically stable dividend, knowing that will decrease future growth potential. Assuming the following information, use the dividend discount model to predict the share price under the new proposal. The required rate of return (RROR) for investors is assumed to be unchanged by the proposal. The rates given are annual and the dividends are paid once per year, just before the annual meeting. Current Dividend = $14 Current RROR = 17% Current Growth = 6% Proposal Dividend increase = $5 Growth decrease = 1.7% (absolute value) What is the dollar change in share price? Answer in the conventional $X.XX format and express negative numbers with a "-" after the units (e.g. $-21). Do NOT use commas in your answer. What is the modified internal rate of return (MIRR) of the below project? Answer in the decimal format (e.g. 10.52% is 0.1052) with 4 decimals. If the answer is negative, place a leading hyphen "-" to indicate so. Do NOT use commas in your answer. The relevant cash flows are listed by period. The WACC is 8%. The assumed reinvestment rate is 7%. Perio Cash Flow d 0 1 2 3 -889 137 -347 722 As the current CFO, you are responsible for presenting the dividend policy decisions to the Board of Directors at fiscal year end. You are preparing to present to the Board tomorrow at the annual meeting. You are considering increasing the historically stable dividend, knowing that will decrease future growth potential. Assuming the following information, use the dividend discount model to predict the share price under the new proposal. The required rate of return (RROR) for investors is assumed to be unchanged by the proposal. The rates given are annual and the dividends are paid once per year, just before the annual meeting. Current Dividend = $14 Current RROR = 17% Current Growth = 6% Proposal Dividend increase = $5 Growth decrease = 1.7% (absolute value) What is the dollar change in share price? Answer in the conventional $X.XX format and express negative numbers with a "-" after the units (e.g. $-21). Do NOT use commas in your answer.
Expert Answer:
Answer rating: 100% (QA)
To calculate the Modified Internal Rate of Return MIRR of the project we need to determine the futur... View the full answer
Related Book For
Financial management theory and practice
ISBN: 978-1439078099
13th edition
Authors: Eugene F. Brigham and Michael C. Ehrhardt
Posted Date:
Students also viewed these finance questions
-
BACKGROUND You are an information analyst working for NEE. The company president has asked you to prepare a Quantitative analysis of financial, sales, and operations data to help determine which...
-
The curve known as the Bernoulli spiral (Figure 7) has parametrization r(t) = (e t cos 4 t , e t sin 4t). (a) Evaluate s(1) = ||' (u) du. It is convenient to take lower limit -co because _lim_r(1) =...
-
Prepare a SWOT Matrix, SPACE Matrix, BCG Matrix, and QSPM for EXXON mobile. When you have created these models craft a two paragraph analysis of your findings and conclusions. In a third paragraph,...
-
Portable electric heaters are commonly used to heat small rooms. Explain the energy transformation involved during this heating process.
-
Wire \(1,3.0 \mathrm{~m}\) long and of linear mass density \(0.010 \mathrm{~kg} / \mathrm{m}\), is initially held in place and carries \(10 \mathrm{~A}\) of current to the right. Very long wire 2 is...
-
Your task in this problem will be to use a spreadsheet to generate a Txy diagram for a two-component system, using Raoult?s law to express the vapor?liquid equilibrium distribution of each species....
-
Sketch a hand written a Enhanced ER diagram for this table and fix the error if there is Message cation D Notification UserNotif Password UserName UserID RoleID User D Phone User # Role securityID...
-
Tye is conducting the closing process on the year for his floristry business, Sunflowers. How would Tye transfer the balances of Sunflowers' expense accounts? Credit to expense accounts and debit to...
-
Why is the val instance variable in the nested Node class in HashST declared to be of type Object instead of Value?
-
How much time do string operations take?
-
What happens if I forget to use new when creating an object?
-
Why red, green, and blue instead of red, yellow, and blue?
-
Why is the type for real numbers named double?
-
Find in the network shown using Norton's Theorem 4V 2 kn 12 V 4 kn 2 kn
-
What is a manufacturing system?
-
In this chapter we described how to estimate a company's WACC, which is the weighted average of its costs of debt, preferred stock, and common equity. Most of the data we need to do this can be found...
-
List six reasons why risk management might increase the value of a firm.
-
Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $190,000, a 3-year expected...
-
Novo Nordisk is a Denmark-based biopharmaceutical company with a focus on diabetes drugs. The company provides detailed disclosure of revenue along geographic, business segment, and product lines....
-
Use the data in Example 1 on Novo Nordisk to answer the following questions: i. Xiaoping Wu is an equity analyst covering European pharmaceutical companies for his clients in China. Wu projects that...
-
Walgreens and Rite Aid are two of the largest retail drugstore chains in the United States. For both companies, around two-thirds of their sales are from prescription pharmaceuticals, with the...
Study smarter with the SolutionInn App