EX5

Shop Now Business Valuation The company has 25,000 shares outstanding, which are currently trading at $42.5 Questions 1. What is the book value of the shares? 2. What is the market value of the shares? 3. What is the ratio of the market value to the book value? Calculate the market value of publicly traded companies. EXERCISE 5: ANNUAL AND CUMULATIVE PRESENT VALUES Use 10% as the company's weighted average cost of capital and the estimates show below to calculate the following values for a manufacturing plant: 1. The yearly present values 2. The cumulative net present values Year 1 In millions Projected profit for the year Projected capital cost allowance Projected incremental investment in working capital $3.0 $1.1 $0.6 Year 2 Year 3 $3.4 $3.9 $1.2 $1.3 $0.5 $0.6 Year 4 $4.3 $1.4 $1.0 Year 5 $4.8 $1.5 $0.5 8 Determine the investment return on capital projects from an investor's perspective EXERCISE 6: PRICING A BUSINESS Kenisha Johnson, CEO of Eastern Electronics Inc., is looking at the possibility marketing a new product line. Kenisha will be approaching a risk capital investo Manon Miller, asking for $500,000 in equity participation. This is 30% of the com pany's equity share. LVL LLC JLC