Question
_____ 3.) You invest using the Rule #1 investment strategy. The company you are analyzing has an operating income of $600 million. If the company
_____ 3.) You invest using the Rule #1 investment strategy. The company you are analyzing has an operating income of $600 million. If the company debt is $900 million, the company equity is $400 million, and its tax rate is 21%, what is the companys return on invested capital? A.) 9.7% B.) 36.5% C.) 46.2% D.) 58.4% E.) None of the above _____ 4.) If the total intrinsic value of a company is $700 million, and the company has $160 million in total debt and $130 million in preferred shares, what is the intrinsic value of the companys stock price if the company currently has 50 million common shares outstanding? A.) $8.20/share B.) $10.75/share C.) $17.50/share D.) $31.75/share E.) None of the above
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