for in its calculation. Answer the next 4 questions using the information in the following table. You are considering the purchase of a $1‚000 par value Treasury Bill and observe the following quotes for T-Bills in the market: Ignore transaction costs. Time to Maturity (days) Bid % Asked % 60 1.64 1.55 88 1.63 1.54 116 1.62 1.53 144 1.61 1.52 4. The ask price of a T-bill in the secondary market is A. the price at which the dealer in T-bills is willing to sell the bill. B
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Terminal Value 691.796 *13.599/(WACC-GrowthRate) Summe 705.355 Present Value 4.181 4.238 7.525 8.467 528.908 *Firm Free CF/ (1+WACC)^t DCF 553.318 Current Risk Free Rate 4‚15% Market Risk Premium 6‚50% CAPM Cost of Capital 8‚75% Cost of Dept 6‚00% Discount Rate 14‚75% βA (βU * (1+D/E) 94‚67% Tax Rate 40% D/V 25% E/V = (1-D/V) 75% WACC 7‚46 Trading Multiples Source Average Sales Multiple 1‚35 Exh 8 Average EBITDA Multiple 9‚75 Exh 8 Net Sales Source Value
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Subjective well-being is based on people experience life satisfaction and emotional experience. SWB reflects a person’s perspective quality of life positive or negative life emotional experience. Some people’s lifespan has more positive life experience and more happy satisfaction memories in their life so they would have a very very high level of SWB (subjective well-being). Now as for a person who has a negative life experienced their SWB level will be extremely low‚ and they will be unhappy
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Chapter 17: Valuation and Capital Budgeting for the Levered Firm 17.1 Honda and GM are competing to sell a fleet of 25 cars to Hertz. Hertz fully depreciates all of its rental cars over five years using the straight-line method. The firm expects the fleet of 25 cars to generate $100‚000 per year in earnings before taxes and depreciation for five years. Hertz is an all-equity firm in the 34-percent tax bracket. The required return on the firm’s unlevered equity is 10 percent‚ and the new fleet
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1.Executive Summary The case study has been approached from different valuation methods to ascertain if there is value in the acquisition of Southern Comfort. These methods all yield the same result‚ i.e. Southern Comfort is expensive at the asking price of $94.6million. The valuation methods also examined the reasonableness of the acquisition using methods such as Free Cashflow Analysis‚ Book Value methods and Price Earnings ratios analysis The qualitative aspects have also been analysed to
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Assignment: Entrepreneurial Finance Due date: ------------------------------------------------- Note: Individual attempt would be honored. Copy-pasted would carry Zero Marks. 1. The TecOne Corporation is about to begin producing and selling its prototype product. Annual cash flows for the next five years are forecasted as: Year Cash Flow 1 -$50‚000 2 -$20‚000 3 $100‚000 4 $400‚000 5 $800‚000 A. Assume annual cash flows are expected
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Exam 1 1.) The ability to sell an asset quickly at a fair price is associated with: B. Liquidity Risk 2.) Sources of risk for an investment include: C. Business risk and financial risk 3.) The real risk-free rate is affected by a two factors: E. Time preference for income for consumption and the set of opportunities available in the economy. 4.) Two factors that influence the nominal risk-free rate are: A. The relative ease or tightness in capital markets and the expected rate of inflation 5.)The
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QUESTION 1: Note: due to rounding $10 was added to value of principal reduction in year 5. QUESTION 2: One of the reasons that the implicit rate (4%) is lower than the interest rate RCGC would have to pay to borrow the 89‚600 amount could be that the leasing company has a better credit risk rating than RCGC and can borrow at a lower interest rate. Another reason could be that the leasing company will get the carts back at the end of the lease and could lease them to a different company. Another
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MAT 450 Assignment: Amortization Problems 1. Construct the amortization schedule for a $20000 debt that is to be amortized in 8 equal quarterly payments at an annual rate of 12 % compounded quarterly on the unpaid balance. First‚ determine the size of the payments‚ PMT = _________? |Payment # |size of payment |interest paid |balance paid |unpaid balance | | | | j = 0.03
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To: Dr. Lynna Martinez Subject: Calaveras Vineyards Valuation As per your request‚ my associates and I have calculated a valuation for Calaveras Vineyards using the present value of cash flows. We used the valuation of future cash flows method in order to value to value the company. We have come to the conclusion‚ based on a number of future projections‚ that the best valuation of the vineyards is $4‚356‚000 in assets and $1‚104‚000 in equity. The process at determining this valuation was as
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