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 ?
Part 1 (1 point) t.) See Hint A consumer receives an endowment of $ 1000.00 this period and $700.00 next period. Currently the interest rate is 14.00%. The future value of the endowment is $ | |. Part 2 (2 points} 0 See Hint Suppose that instead the endowment is $1200.00 this period and $910.00 next period. Suppose that the interest rate is still 14.00%. Now the future value of the endowment is 35 I . With the new endowment. the consumer is v Part 3 (2 points} 0 See Hint Now suppose that the endowment is $950.00 in the first period and $675.00 in the second period. The interest rate is still 14.00%. Now the future value of the endowment is $ | !. Compared to the endowment in Part 1. with the new endowment, the consumer is v 00F13QU5TIONSCOMPLETED ) ( 02/13 III _ Due Date. alllaly al, 2020 1. When will countries trade? Assuming 2 goods, food and clothing, and that both countries' preferences are homothetic (but not necessarily identical), determine whether two countries will trade in each of the following situations: (a) Countries have identical preferences and identical endowments. (b) Countries have identical preferences, their endowments differ, and their endowments are not in the same ratio of food to clothing. (c) Countries have identical preferences, their endowments differ, but the ratio of food to clothing is the same in both countries. (d) Countries have identical endowments but different preferences. (e) Countries have both different preferences and different endowments.Part 1 (0.2 pt) X Feedback See Hint A consumer receives an endowment of $200.00 this period and $800.00 next period. Currently the interest rate is 11.00%. The present value of the endowment is $ X 222 . (Give your answer to two decimals.) Part 2 (0.4 pt) Feedback See Hint Suppose that instead, the endowment is $240.00 this period and $1040.00 next period. Suppose that the interest rate is still 11.00%. Now the present value of the endowment is $ x 1394.40 . (Give your answer to two decimals.) With the new endowments, the consumer is " wealthier Part 3 (0.4 pt) Feedback See Hint Now suppose that the endowment is $150.00 in the first period and $775.00 in the second period. The interest rate is still 11.00%. Now the present value of the endowment is $ x 1010.25 . (Give your answer to two decimals.) With the new endowments, the consumer is poorer
