Over a long period of time, what is the average ROIC with goodwill for the publicly traded firms in the U.S.? And what is the average real growth rate for these firms? 20% for ROIC with goodwill: 15% for real growth rate 50% for ROiC with goodwill; 300 for real growth rate 10% for ROIC with goodwill: 5% for real growth rate 59 for ROIC with goodwill: 20% for ieal growth rate The DCF valuation of a firm is a long process. It uses 5 to 10 years of historical financial statements as well as other relevant information (such as industry, market, and economic data), and it involves multiple steps (historical performance, forecasting, discount rate, and final valuation). Regarding the DCF application, three situations are listed in the following. The 1st situation: AT\&T plans to acquire Direct TV. AT\&T needs to understand the business of and know the intrinsic value of Direct TV. The 2nd situation: an individual investor plans to buy 100 shares of Direct TV stocks upon the rumor of the acquisition, and to sell for a profit within a few months. The 3ro situation: a day trader of AT\&T stocks tries to make a quick profit in a few days. Which of the above situations should have the DCF valuation conducted? All of the situations The 1st situation The 2nd Situation The Bed situation The following table reports firm values for various ROICs and growth rates. Each value is calculated based on the constant-growth EP model. The cost of capital (WACC) is 10\%, and the invested capital today is $1,000. What is a correct description of the relationship between ROIC and firm value? ROIC and firm value have no relationship at all. The higher the ROIC, the lower the firm value. The lower the ROIC, the higher the firm value. The higher the ROIC, the higher the firm value. The following table reports relative values and value drivers for a few industries. Based on the above table, which of the following statements is correct? Higher value multiples are related to lower value drivers. Higher value multiples are related to lower ROIC. Higher value multiples are related to higher value drivers. Higher value multiples are related to lower growth. equity investment? Company Aiyes Company C:no In explicit forecasting, we project financial statements for the next 5 to 10 years. For a firm like Walmart, which item is usually forecasted first? Total Assets Revenues or Sales Net Earnings Total Liabilities The revenues of Fred's stores grow at 7% each year. Fred's sister Sally owns Sally's Stores. Her stores grow at 9% each year. Sally achieves the high growth by reinvesting lots of capital back to her business and expanding stores. Her current invested capital is $10 million, and her overall return on invested capital is 12%. Fred's invested capital is also $10 million, and his overall return on invested capital is 17%. The opportunity costs of capital for Fred and Sally are the same (10\%). Calculate the economic profit in year 1 and firm value today for Fred's stores. 1.0 for economic profit: 23.33 for firm value 0.7 for economic profit: 33.33 for firm value 1.0 for economic profit: 20.00 for firm value 0.2 for economic profit: 30.00 for firm value