estion:

Calculate the weighted average cost of capital (WACC) for PDI.

E/V80.00%

Cost of equity9.40%

Risk-free rate 3.00%

Beta 1.28

Market equity risk premium 5.00%

D/V20.00%

Cost of debt4.00%

Corporate tax rate40.00%

WACC 80% x 9.40%) + [20% x 4% x (1 - 40%)]= 8.00% WACC = (E/V x Re) + ((D/V x Rd) x (1 - T))

*Cost of equityRisk free rate of return + (Beta * Risk premium) = 3% + (1.28 x 5%) 0.094

Givend the above, I cannot get the following:

Sum of FCF PV =?

Terminal value =?

Present value of terminal value =?

Total value of PDI =?

Assumptions

Discount rate ?

Terminal value ?

The density f (a ) = e (I-A)2/202 correspond to a V2TO X O exponential random variable O geometric random variable O standard normal random variable O Binomial random variable O uniform continuous random variable O Bernoulli random variable O normal random variable[12 marks] Consider the Markov chain { X,, n 2 0) on S = (1,2,3,4,5) with the one-step probability transition matrix (a) If Xo = 3, find the probability that the chain gets absorbed in state 5. (b) If Xo = 3. find the expected time until the chain first reaches the set of states {1,2,5).\f