Calculate the cost of equity using the following data.

Risk free rate $6\%.$

Market premium $10\%.$

Beta $0\mathrm{.}8$

Group of answer choices

$10\%$

$14\%$

$16\%$

$12\%$

Calculate the WACC using the following data.

Cost of Equity $10\%.$

Tax rate $35\%.$

D$/$E $45\%.$

Interest rate $4\%$

Group of answer choices

$7\%$

$7\mathrm{.}4\%$

$7\mathrm{.}1\%$

$7\mathrm{.}7\%$

Calculate the terminal value using the following data.

Last FCF $$2,500.$

FCF growth $3\%.$

WACC $16\%$

Group of answer choices

$15,846$

$18,908$

$19,808$

$19,231$

Calculate the net present value of the following free cash flows. Assume that WACC is $18\%.$ Assume that the cash flows are earned evenly over the year.

Year $0$ Year $1$ Year $2$ Year $3$ Year $4$ Year $5$

FCF $-100010001300140015001600$

Group of answer choices

$3,276$

$3,645$

$3,461$

$3,106$

Assuming ABC Ltd$$s free cash flow is R$35,000$ in year one and grows at a constant rate of $3\%$ p$.$a$.$ for years $2$ through to year $5.$

After Year $5,$ the free cash flows grow at $5\%$ into perpetuity.

The cost of capital for ABC Ltd is $12\%.$ Assume cash flows are earned at the end of the period.

Calculate the present value of the terminal value.

Group of answer choices

$362,098$

$447,988$

$281,632$

$335,288$

Question $61$ pts

Using the following financial information calculate the Free Cash Flow in $2020$

Year $2019$ Year $2020$

Revenue $38004500$

Cost of sales $-2000-2200$

Gross profit $18002300$

Selling expenses $-175-200$

Admin expenses $-365-440$

Depreciation and Amortisation $-660-700$

Profit before Interest and Tax $600960$

Interest expense $-20-40$

Profit before Tax $580920$

Tax expense $-145-258$

Net Income$/$Profit After Tax $435662$

Capex $400500$

Operating working capital $500570$

Taxation rate $25\%28\%$

Group of answer choices

$823$

$812$

$821$

$832$

Question $71$ pts

Jacob's Property Company is considering investing R$1,900,000$ in a special project.

This venture will return R$315,000$ annually for $10$ years in after$-$tax free cash flows.

Depreciation on the project will be R$140,000$ per year using straight$-$line depreciation.

What is the nominal $($not discounted$)$ payback period for the project?

Group of answer choices

$12$ years

$6\mathrm{.}03$ years

$10$ years

$13\mathrm{.}57$ years

Flag question: Question $8$

Question $81$ pts

Convert a Debt to Equity ratio of $20\%$ to a Debt to Total Capital ratio.

Group of answer choices

$25\%$

$16\mathrm{.}7\%$

$16\%$

$23\%$

Flag question: Question $9$

Question $91$ pts

Assume that a business has Sales of R$85,000,$ and has an Operating profit of R$12,000,$ and Earnings after tax of R$5,000.$

If there are $10,000$ shares in issue and they are trading at R$12$ per share, what is the PE ratio?

Group of answer choices

$8$

$12$

$6$

$24$

Question $101$ pts

Why is the interest expense not taken into account in the free cash flow when valuing a company?

Group of answer choices

Interest is tax deductible

The cost of debt is irrelevant when valuing a business

The affect of interest is taken into account when discounting by WACC

In a valuation we are only concerned with the equity value