Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

40. GeoTel's (in question 38) Total Invested capital is $397,062 and its weighted average cost of capital (WACC) is 8%. Select the CORRECT response (hint:

image text in transcribed
40. GeoTel's (in question 38) Total Invested capital is $397,062 and its weighted average cost of capital (WACC) is 8%. Select the CORRECT response (hint: consider using Economic Value Added (EVA)) GeoTel did not cover its opportunity cost of capital in the most recent period. b. GeoTel's EVA suggests that management did a good job in the past year C. GeoTel's EVA is positive, but is not sufficiently positive to cover the firm's opportunity d. e. cost of capital. GeoTel's Net Income is equal to its opportunity cost of capital None of the above are correct. 41. Vidalia Enterprises had per-share Free Cash Flow of S2.90 at time-o". FCF is expected to grow at 3% per year, and the relevant discount rate for Vidalia is 10%, what is Vidalia's intrinsic value per share? a. $29.00 b. $41.43 $42.67 d. $49.50 e. Cannot be computed on the basis of the information provided. 42. What is GeoTel's Compound Average Growth Rate (CAGR) in per-share price that is expected over the next 5 years? 3% 5% b. d. 10% e. cannot be computed on the basis of the information provided 43. (TRUE or FALSE) It is possible for the value of a share of stock to increase even if expected future Free Cash Flows decline, provided that this decline is offset by a decrease in the relevant discount rate 44. Internet traffic is increasing at a Compound Average Growth Rate (CAGR) of approximately 24% per How long will it take for Internet traffic to double over its 2018 level? a. 1or 2 years b. 3 or 4 years c. no less than 7 years d. Cannot be computed on the basis of the information provided year. 45. If the current ratio is less than 1.0, then using some cash to pay off some current liabilities would cause the current ratio to increase a. b. decrease c. cancel out and therefore stay the same. d. cannot tell from information provided. 40. GeoTel's (in question 38) Total Invested capital is $397,062 and its weighted average cost of capital (WACC) is 8%. Select the CORRECT response (hint: consider using Economic Value Added (EVA)) GeoTel did not cover its opportunity cost of capital in the most recent period. b. GeoTel's EVA suggests that management did a good job in the past year C. GeoTel's EVA is positive, but is not sufficiently positive to cover the firm's opportunity d. e. cost of capital. GeoTel's Net Income is equal to its opportunity cost of capital None of the above are correct. 41. Vidalia Enterprises had per-share Free Cash Flow of S2.90 at time-o". FCF is expected to grow at 3% per year, and the relevant discount rate for Vidalia is 10%, what is Vidalia's intrinsic value per share? a. $29.00 b. $41.43 $42.67 d. $49.50 e. Cannot be computed on the basis of the information provided. 42. What is GeoTel's Compound Average Growth Rate (CAGR) in per-share price that is expected over the next 5 years? 3% 5% b. d. 10% e. cannot be computed on the basis of the information provided 43. (TRUE or FALSE) It is possible for the value of a share of stock to increase even if expected future Free Cash Flows decline, provided that this decline is offset by a decrease in the relevant discount rate 44. Internet traffic is increasing at a Compound Average Growth Rate (CAGR) of approximately 24% per How long will it take for Internet traffic to double over its 2018 level? a. 1or 2 years b. 3 or 4 years c. no less than 7 years d. Cannot be computed on the basis of the information provided year. 45. If the current ratio is less than 1.0, then using some cash to pay off some current liabilities would cause the current ratio to increase a. b. decrease c. cancel out and therefore stay the same. d. cannot tell from information provided

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations Of Personal Finance

Authors: Sally R. Campbell, Robert L. Dansby

9th Edition

1619603578, 9781619603578

More Books

Students also viewed these Finance questions

Question

How does loan portfolio risk differ from individual loan risk?

Answered: 1 week ago

Question

List at least three disadvantages to using a consultant.

Answered: 1 week ago

Question

How are arbitrators credentialed?

Answered: 1 week ago