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1. Compute Diamond's NOA as of July 31, 2011. 2. Compute the cost of equity capital for Diamond as of 7/31/2011. 3. For this

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1. Compute Diamond's NOA as of July 31, 2011. 2. Compute the cost of equity capital for Diamond as of 7/31/2011. 3. For this question, assume that Diamond's cost of equity capital is 9%. Compute the weighted average cost of capital for Diamond as of 7/31/2011. 4. For this Question, assume that Diamond's weighted average cost of capital is 5%; also assume NOA and NNO as of July 31, 2011 are $990,000 and $515,000, respectively (in '000). Using the Residual NOPAT (ROPI) valuation approach discussed in class, estimate the value of Diamond's stock per share as of July 31, 2011. Be sure to submit an excel printout (as part of the Appendix to your report). 5. For this Question, assume that Diamond's weighted average cost of capital is 5%; also assume NOA and NNO as of July 31, 2011 are $990,000 and $515,000, respectively (in '000). Also assume that the analyst determines that the "momentum" payments were actually an expense for FY 2011, and so revises Diamond's forecast NOPAT margin down to 3%. Using the Residual NOPAT (ROPI) valuation approach discussed in class, re-estimate the value of Diamond's stock per share as of July 31, 2011. Be sure to submit an excel printout (as part of the Appendix to your report).

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