[pic] ADM 3350 M Winter 2010 CORPORATE FINANCE ANSWER KEY MIDTERM EXAMINATION – February 10th‚ 2010 Professor: Kaouthar LAJILI‚ PhD.‚ CGA Duration: 1 hour and 30 minutes | | | | |INSTRUCTIONS | | |
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Düsseldorf Business School at the Heinrich-Heine-University 5b Value Management & Cost Management Prof. Dr. Klaus-Peter Franz Valuation of a company KIA MOTORS By: Youngsook Kwon‚ Date: Jan 30‚ 2013 Table of Contents 1. Introduction 1 2. Valuation Methodology 2 2.1. Discounted Cash Flow 2 2.2. Terminal Value 3 2.3. Weighted Average Cost of Capital 3 2.3.1 Cost of Equity 4 2.3.2 Cost of
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Bus M 401 Dixon Case Estimate of WACC for Collinsville Plant The WACC for Collinsville‚ according to our estimations‚ came up to about 16.22% (Exhibit I). We took the average of the unlevered betas of comparable companies‚ 0.91‚ and relevered it according to Dixon’s target capital structure. Dixon’s 5-year historical debt ratio was 27.5%‚ but this approach would not be reliable due to its steep downturn debt ratio from 51% in 1975 to 6% in 1979. Thus‚ we thought that the best estimate of the
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Construction cost of the project 4 Maintenance cost (Recurring Cost) 5 Operation Expenses 5 Revenue sources 6 Toll revenue 6 Other income 6 Government Grant 6 Proposed sources of finance 6 NPV & IRR Calculation 7 Calculation of Beta 7 Tax Calculation 8 Tax Rate 8 Minimum Alternate Tax (MAT): 8 Tax Exemptions (Under Section 80 IA): 8 Exhibits 8 Introduction The Ministry of Road and Transport has decided to take up the development of several National Highway Corridors
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pesos (US$360M)? Based on the information in the case‚ Pepsi could invest US$360 million in exchange for 30% equity of Deltex. So we have to calculate the value of 30% equity of Deltex. First‚ we calculated the discount factor by using average unlevered beta of US independent bottlers‚ US 10 year Treasury bond as risk free rate and assuming market risk premium 10%. We came up with 9.83% of WACC. Next‚ we calculated Deltex free cash flow and terminal value and then converted them into US dollar value
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proposed change in financial leverage Current Asset Debt Equity D/E Ratio Share Price Shares Out. Interest Rate $8‚000‚000 $0 Proposed $8‚000‚000 $4‚000‚000 $20 n/a $20 10% Financial Leverage: An Example Current capital structure: No debt (unlevered) Recession Normal $1‚000‚000 Expansion $1‚500‚000 EBIT Interest Net Income EPS ROE $500‚000 Financial Leverage: An Example Proposed capital structure: D/E = 1 (levered) Recession Normal $1‚000‚000 Expansion $1‚500‚000 EBIT Interest
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Grant Nauta AHP Case Study Because American Home Products (AHP) currently operates with virtually no debt‚ their financial risk is very small. This shifts the burden heavily towards business risk. A porter’s five forces analysis is appropriate to determine the exact levels of business risk for American Home Products. First‚ the threat of substitutes is a risk that AHP cannot afford to ignore. Because they spend very little on Research and Development‚ and have to rely on their marketing to catch
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User Ms Julie Ciarlante Course FIN-601-001 - FA 13-14 Test FIN 601 Final Exam Started 12/12/13 7:19 PM Submitted 12/12/13 9:25 PM Status Completed Attempt Score 126 out of 135 points Time Elapsed 2 hours‚ 5 minutes out of 5 hours. Question 1 3 out of 3 points A bond with an annual coupon of $70 and originally sold at par for $1‚000. The current market interest rate (yield to maturity) is 8%. This bond will sell at _______. Assuming no change in market interest rates
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NOVA School of Business and Economics Corporate Finance‚ 2nd Semester 2012/2013 Case Study TOSCO is a company listed in the Portuguese Stock Exchange operating a supermarket chain established in Portugal for many years. The market for traditional food retailers is saturated‚ and there is no room for growth under the same business model. TOSCO’s shareholders have been pressuring the management to pursue new opportunities in order to increase the value of their shares. The management
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50 12.0 If the company were to recapitalize‚ then debt would be issued and the funds received would be used to repurchase stock. PizzaPalace is in the 40% state-plus-federal corporate tax bracket‚ its beta is 1.0‚ the risk-free rate is 6%‚ and the market risk premium is 6%. ===================================================================================== A. Provide a brief overview of capital structure effects. Be sure to identify the ways in
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