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a. True b. Folse 12. Given the following intormation far a public company, calculate the company's cost of equity Usims 8.075 . Capital Asset Pricing

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a. True b. Folse 12. Given the following intormation far a public company, calculate the company's cost of equity Usims 8.075 . Capital Asset Pricing Model (CAPM). Beta: 1.5. Risk froe rate: 4.50%. Expected Market return: 8.0%. a. 12.0% b. 9.8% c. 8.0% d. 6.5% 13. A company has 150mm fully diluted shares outstanding with a current (unaffected) market price of $20 and total net debt of $2.6 billion. EBIDA for the most recently concluded year was $600 millon: investment team has determined that a fair multiple to offer for the company is 11 times traing EBrity shareholders? Based on this information, what is the premium that you would be offering to current HINT; debt must be repaid before determining what is rem a. No premium as price per share would be below maket price b. 20% c. 33% d. 120% 14. In order to estimate a terminal value for a possible LBO transaction using the perpetuity growth method using a7 year horizon (i.e., estimating terminal value in the 7th year), the following statement would be true a. Divide the 7 th year FCF by the growth rate less the discount rate b. Divide the 7th year FCF by the discount rate less the growth rate c. Divide the estimated 8 th year FCF by the growth rate less the discount rate d. Divide the estimated 8 th year FCF by the discount rate less the growth rate 15. A company has 40 million fully diluted shares outstanding. a current stock price of $60 with a book value $36 per share. The company's debt has a book value of $4.25 billion and a market value of $4.60 billio and $400 million of cash on the balance sheet. What is the company's enterprise value? a. $6.6 billion b. $7.4 billion c. $8.7 billion d. $6.2 billion 16. When calculating the equity portion of a weighted average cost of capital (WACC) to use when discounting projected cash flows, which of the following should be used in your calculation: a. Book value of equity b. Market value of equity c. Equity divided by debt in the capital structure d. A and C e. B and C

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