rate is forecasted to be 6% forever. Risk-free rate is 3%‚ and market risk premium is 4%. Assume that Constant Dividend Growth Model and CAPM give you the same estimate of the cost of capital for equity‚ what is the beta of its stock? By the Constant Dividend Growth Model: Cost of Equity = D/P+g = 0.2/20+6%=7% By CAPM‚ cost of equity = R(f)+ beta * market risk premium = 3% + beta* 4%‚ Set this to be equal to 7%‚ solve for beta: beta=1 3. Firm ABC has a cost of equity of 8%‚ a cost of debt of
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Sold (units × $9) Gross Profit Depreciation ($30‚000 / 3) EBIT Income tax at 35% Unlevered net income Add back Depreciation Cash Flows from Operations 1 2‚000 36‚000 18‚000 18‚000 10‚000 8‚000 2‚800 5‚200 10‚000 15‚200 2 2‚200 39‚600 19‚800 19‚800 10‚000 9‚800 3‚430 6‚370 10‚000 16‚370 3 2‚420 43‚560 21‚780 21‚780 10‚000 11‚780 4‚123 7‚657 10‚000 17‚657 N etworking Capital F orecast Y ear 1 2 3 Sales (units × $18) 36‚000 39‚600 43‚560 Cash (2%
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Physics 221 Summer 2012 HOMEWORK #3 Due Monday July 2‚ 2012 1 James Bond (90 kg)‚ outfitted with perfectly matching skis and skiware‚ is at the top of a steep slope that a secret spy like him can easily handle. He lets himself go from rest and smoothly slides down the h = 15 m high hill. A big parking lot lies at the bottom of the hill. Since the parking area has been cleared of snow‚ the friction between the ground and the skis brings our hero to a halt at point D‚ located at a distance
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questions on exams that become the basis for assessment. To aid faculty in this endeavor‚ we have labeled each question‚ exercise and problem in Intermediate Accounting‚ 7e with the following AACSB learning skills: Questions AACSB Tags 1–1 1–2 1–3 1–4 1–5 1–6 1–7 1–8 1–9 1–10 1–11 1–12 1–13 1–14 1–15 1–16 1–17 1–18 1–19 1–20 1–21 1–22 1–23 1–24 1–25 1–26 1–27 1–28 1–29 Reflective thinking Reflective thinking Reflective thinking Reflective thinking Reflective thinking
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| Corporate Finance2 CreditsBU.231.620.62Thursday 6pm – 9pm‚ 10/18/2012--12/13/2012Fall2‚ 2012Columbia‚ Columbia Center‚ 218 | Instructor Shabnam Mousavi Contact Information Phone Number: (410)234-9450 E-mail Address: shabnam@jhu.edu Office Hours Monday/Thursday 10am-noon Required Text and Learning Materials (1) Berk‚ J. and P. DeMarzo. 2007. Corporate Finance. 2nd Edition. Pearson‚ Addison-Wesley with MyLab access. The ISBN is 0-13-295-040-5. (2) Lecture Notes. The lecture
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Department of Finance‚ HKUST Spring 2013 Email: Xuewenliu@ust.hk Office hour: 13:30-14:30 Tuesday Assessment: Assignments (12%)‚ Midterm-exam (18%)‚ Projects and presentations (15%)‚ and Final exam (55%) Textbooks: 1. Corporate Finance‚ by J. Beck and P. DeMarzo‚ 2nd edition 2011‚ Pearson Education‚ Inc. Hereafter BD. 2. Financial Markets and Corporate Strategy‚ by M. Grinblatt and S. Titman‚ 2nd edition‚ 2002‚ Irwin McGraw Hill. Hereafter GT. I. Introduction to Corporate Finance 1. Corporations
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Chapter 4 15. For discrete compounding‚ to find the EAR‚ we use the equation: EAR = [1 + (APR / m)]m – 1 = .0719‚ or 7.19% EAR = [1 + (.07 / 4)]4 – 1 EAR = [1 + (.16 / 12)]12 – 1 = .1723‚ or 17.23% = .1163‚ or 11.63% EAR = [1 + (.11 / 365)]365 – 1 To find the EAR with continuous compounding‚ we use the equation: EAR = er – 1 EAR = e.12 – 1 = .1275‚ or 12.75% 23. Although the stock and bond accounts have different interest rates‚ we can draw one time line‚ but we need to remember to
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2. After carefully going over your budget‚ you have determined you can afford to pay €632 per month toward a new sports car. You call up your local bank and find out that the going rate is 1 percent per month for 48 months. How much you can borrow? 3. You ran a little short on your spring break vacation‚ so you put €1‚000 on your credit card. You can only afford to make the minimum payment of €20 per month. The interest rate on the credit card is 1.5 percent per month. How long will you need to pay
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Sunny Beach Hotel Evaluation Report Regarding Various Scenarios for Adding a Karaoke Pub in the Sunny Beach Hotel . Dear Sir‚ I have considered the scenarios you suggested to be evaluated from economic point of view regarding the opportunity of accepting the offer of Planet Karaoke Pub to install one of its facilities inside the free space from 2nd floor of Sunny Beach Hotel or to extend the activities of our company with a Karaoke pub located on the beach area administrated by our
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Emerging Markets: High Fashion Fights Recession 1. Using the five forces framework‚ how would you characterize the competition in the luxury goods industry? Threat of Substitutes There is relatively no threat of substitution in the luxury goods industry. This is mainly because of the quality and price of substitutes‚ and the cost of switching to the consumer. The price of counterfeit goods that copy the luxury goods causes there to be a positive monetary cost in switching but there is a loss of
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