Ex 1. Calculate the cost of equity of Company A considering that the weighted average cost of capital (WACC) is 4.20%, the total value of debt and equity is 1,540,000, and the company holds 35% in debt. The cost of deb is of 3% and Company A pays 35% tax.

Ex 2. Company B paid dividend in 2021 of 0.9 USD, in line with the expected dividend growth of 5% each year. Company C has announced it expects to pay a 1.8 dividend to common shareholders in 2022, and its cost of equity (CAPM) is of 8.9%. (Companys C paid dividend in 2020 of 1.5). Both companies are from the tech sector where the expected rate of return of the market is of 9%. a. Which company has the most expensive share price ? b. Wich if the company would you rather buy if you had 25 to spend ?

Ex 3. Company D is considering 2 investments: implementing ion-battery or upgrading its current automated factory in the US. How would the Financial Manager compares those 2 options considering the following investments and returns of both options: Discount factor 5% Project AProject B Ion batteryPlant upgrading Initial investment120.000160.000 Expected Cash flowsYear 145.00015.000 Year 250.00025.000 Year 335.00050.000 Year 4 20.000 Year 5 30.000 Year 6 40.000 An additional project consisting in the improvement of ion-batteries implemented, could also be considered: Project C Ion battery improvement Initial investment90.000 Expected Cash flowsYear 430.000 Year 525.000 Year 650.000 Using the replacement chain illustration method, wihch option should the Financial Manager chose and why?

Ex 4. A company is looking at launching a new business line and is considering the following options: Product A, B or C, with the following initial investments and expected cash flows: Discount factor is 7% Product AProduct BProduct C II (initial Investment)11.00016.00021.000 Cash flow year 11.5003.0006.500 Cash flow year 23.0002.0007.000 Cash flow year 34.0006.0005.000 Cash flow year 45.0004.0004.000 Where should the company expand if its objective is the shortest payback period possible ? Calculate the net present value (NPV), benefit cost ratio (BCR), internal rate of return (IRR) and equivalent annual annuity (EAA) of each project and confirm wether the payback objective of the company is inline with the most profitable project

Ex 5. Calculate the beta of an investment considering that the risk free rate is 2,5%, the expected market return is 15% and the capital asset pricing model (CAPM) is 12%