5 136 13. FCFF of the company is closest to? A. $50 B. $110 C. $90 14. FCFE of the company is closest to A. $90 B. $150 C. $140 15. Using FCFF found in previous question find the value of the equity with following assumptions: WACC is 8%, market value of debt is $1300 (net of cash) and growth rate of FCFF is 5% A $450 B. $1850 C. $2550 16. An analyst has determined that the appropriate EV/EBITDA for XYZ Company is 15. The analyst has also collected the following forecasted information for XYZ Company: EBITDA - $20,000,000 Market value of debt - $50,000,000 Cash = $1,000,000 The value of equity for XYZ Company is closest to: A $251 million B. $250 million C. $300 million 17. An analyst gathers the following information about similar companies in the banking sector: First Bank Prime Bank Pioneer Trust P/B 1.10 0.60 P/E 8.30 Which of the companies is most likely to be undervalued? A. First Bank B. Prime Bank C. Pioneer Trust 18. Which of the following is the best reason for an investor to be concerned with the composition of a portfolio? A Risk reduction B. Downside risk protection C. Avoidance of investment disasters. 19. Using information in the table below find equally weighted 2 index portfolio with the best risk-adjusted returns if the risk free rate is 2% Correlation with: Portfolio Exp Return Std Dev French English German French 7.028 17.447 1 English 0.724 5.870 0.2390 1 -0.077 7.431 0.2894 0.5830 0.60 8.40 11.10 German 1