Please provide detailed help on the following questions for easy understanding.

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1. Calculated betas provide different information if they are obtained by using daily,

weekly or monthly data. Which data is the most appropriate?

2. Does is make any sense to calculate betas against local indexes when a company has a

great part of its operations outside this local market? I have two examples: BBVA and

Santander.

3.Is it possible to make money in the stock market when the quotations are going

down? What is credit sale?

4. Which capital structure should we consider when calculating the WACC for a subsidiary

valuation: the one that is reasonable according to the risk of the subsidiary's business,

the average of the company or the one the subsidiary "tolerates/permits"?

5. Are there any ways to analyze and value seasonal businesses?

6. A financial consultant is valuing the company I set as an objective (an entertainment

centre) by discounting the cash flows until the end of the dealership at 7.26% (interest

rate on 30-year-bonds = 5.1%; market premium = 5%, and Beta = 0.47%). 0.47 is a

beta provided by Bloomberg for Kinepolis (the company whose activity is the

management of several cinemas in the EU), in function of the Dax Index. Is it correct

to use the beta of Kinepolis in this valuation?

7. I am confused because I see different formulae to lever and unlever betas in different

books (Damodaran, McKinsey, Brealey & Myers ...). Which is the correct one?

IESE Business School-University of Navarra - 7

8. An investment bank affirms that the VTS (Value of Tax Shields) of my company is

equal to each year's VTS using the WACC as a discount rate. I told them that I have

never seen such a calculation of the VTS but they answered that it was a habitual

practice. Is that true?

9. I have two valuations of the company we set as an objective. In one of them, the

present value of tax shields (D Kd T) was calculated using Ku (required return to

unlevered equity) and, in the other one, using Kd (required return to debt). The second

valuation is a lot higher than the first one, but which of the two is better?

10. My investment bank told me that the beta provided by Bloomberg incorporates the

illiquidity risk and the small cap premium because Bloomberg does the so-called

Bloomberg adjustment formula. Is that true?