9. Which of the following is true about the Convergence Model for calculating the terminal value: It should be used when a company is expected to maintain a long-term competitive advantage. It assumes that the return on new investments are roughly equal to the weighted average cost of capital in the long-run. It is the most suitable formula for companies with high brand value, such as Coca Cola or Heineken. It accounts for long-term value creating growth. 10. In which case can you use the WACC DCF-method? When valuing a high tech startup. When valuing a financial institution. When valuing a conglomerate in the automotive industry. When valuing a company in a leveraged buyout, where debt will be paid down at fixed rate. 11. According to the Adjusted Present Value-method, tax shields on interest have to be valued separately. One could either use the unlevered cost of capital or alternatively the cost of debt as a discount rate for valuing the tax shields on interest. Under what conditions is the unlevered cost of capital used and under what conditions is the cost of debt used as a discount rate for valuing tax shields on interest? Cost of debt: If the ROCB is proportional to the tax rate. Unlevered cost of capital: If the WACC is proportional to the tax rate. Cost of debt: If future debt is independent from the firm value or if future debt ratios are uncertain. Unlevered cost of capital: If future debt is a predetermined proportion of firm value. Cost of debt: If the EVA is negative. Unlevered cost of capital: If the EVA is positive. Unlevered cost of capital: If future debt is independent from the firm value or if future debt ratios are uncertain. Cost of debt: If future debt is a predetermined proportion of firm value. 12. Consider an investment of a private equity firm with an equity value at exit (2024) of $976m and at entry (2018) of $362m. What is the internal rate of this PE firm? Please round your answer to one decimal place and provide your answer without a percentage sign (e.g. 30.6 instead of 30.6% ). Enter answer here