Consider XYZ stock. The current expected annual dividend is $$1\mathrm{.}50,$ and the dividend growth rate is expected to be $5\%$ indefinitely. What is the price of this stock if investors require a return of $12\%?$ What is the dividend yield?

What is the price of a $$1,000$ par value bond with a $7\%$ coupon rate paid semiannually, if the bond is priced to yield $6\%$ and it has $10$ years to maturity? What would be the price of the bond if the yield rose to $8\%.$ What is the current yield on the bond if the YTM is $8\%?$

Free cash flow to equity last year was based on the following information:

Net income $=12000000$

Depreciation $=3000000$

$\backslash$Delta Net Working Capital $=6000000$

Gross Capital Expenditures $=3000000$

New Preferred Equity Issues $=2500000$

Preferred Dividends $=4000000$

New Debt Issues $=2000000$

Principal Repayments $=2500000$

Free cash flow to equity is expected to grow by $25\%$ in the current year, at a $17\mathrm{.}5\%$ rate annually for the next ten years, and then assume a more normal $4\%$ growth rate thereafter. The firm$$s cost of equity is $12\%$ and weighted average cost of capital is $9\%$ during the high growth period and then drop to $9\%$ and $7\%,$ respectively, during the normal growth period. What is the present value of the firm to equity investors $($equity value$)?$ If the market value of the firm$$s debt is $$14$ million, what is the present value of the firm $($enterprise value$)?$

A target firm has the following characteristics:

An estimated enterprise value of $$106$ million

Long$-$term debt whose market value is $$16$ million

$$4$ million in excess cash balances

Estimated PV of currently unused licenses of $$3$ million

Estimated PV of future litigation costs of $$3\mathrm{.}5$ million

$2\mathrm{.}5$ million common shares outstanding

What is the value of the target firm per common share?

A petroleum company has projected sales of $$94\mathrm{.}5$ billion. Use the market$-$based method $($multiple valuation$)$ to find the market value of the company. The price$/$sales figures for comparable companies are given below:

Comparable Company

Price$/$Sales

Exxon Mobil Corp $($XOM$)$

$1\mathrm{.}17$

British Petroleum $($BP$)$

$0\mathrm{.}69$

Chevron Corp $($CVX$)$

$0\mathrm{.}91$

Royal Dutch Shell $($RDS$-$B$)$

$0\mathrm{.}61$

ConocoPhillips $($COP$)$

$0\mathrm{.}77$

Total SA $($TOT$)$

$0\mathrm{.}8$

Eni SpA $($E$)$

$0\mathrm{.}36$

PetroChina Co$.($PTR$)$

$1\mathrm{.}75$