can anyone help me with these finance questions! thank you!
Using the price-to-earnings multiple of its peers (see table), calculate the value of GM's stock price given GM's EPS of 6.29. Ford PE-17.81 Honda PE= 4.41 Toyota PE= 8.05 Stark Enterprises is considering the purchase of a time travel machine costing $30 billion (after tax) that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years, when the project closes. Stark will be shifting some existing labour from other projects to work on this project, and these labour costs are anticipated to be a steady $52 million per year. Working capital will be increased at the initiation of the project by $17 million, and this amount be recovered at project close. After 11 years, the company can sell the parts for $5 billion, after taxes. Stark will fund this project at the company's target debt/equity ratio of 1.2. The company has a beta of 2.79. You estimate that the return on the market is 8.5% and T-bills are currently yielding 3.5%. Stark has two issuances of bonds outstanding. The first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, maturing in 7 years. The second is 500,000 stripped bonds trading at 59% of par, maturing in 12 years. Stark's tax rate of 35.6%. Tony, the CEO, will apply an adjustment factor to the discount rate of +2% for such highly innovative projects (i.e., WACC + 2%). Should the company take on the project? The total value of your portfolio is $10,000: $3,000 of it is invested in Stock A and the remainder invested in Stock B. Stock A has a beta of 0.8; Stock B has a beta of 1.2. The risk premium on the market portfolio is 8%; the risk-free rate is 2%. Additional information on Stocks A and B is provided below. Return in Each State State Probability of State Stock A Stock Excellent 15% 15% 5% Normal 50% 9% 7% Pogg 35% -15% 10% a. What are each stock's expected return and the standard deviation?! b. What are the expected return and the standard deviation of your portfolio?! c. What is the beta of your portfolio? 1. Using CAPM, what is the expected return on the portfolio? You have just won the lottery! You have netted $1,410,567 in cash. If you can access a bank account paying 4.5%, compounded monthly, can you afford the following spending plan? A. Purchase your friend's complete art collection of melting icebergs today, valued at $650,000 (though she's agreed to a 20% discount on the total value) B. Buy a Bentley outright after your Honda lease is up in 24 months. At this time, you expect the Bentley to cost you $345,000. C. Pay for your nephew's education, which will cost $15,000 a year for four years. He will start university in 2 years. D. In 5 years, buy your parents a house in Florida for $256,000. E. In 10 years, take a luxury trip around the world in a private jet for $500,000
