Question
Q1- Assume a constant dividend per share for a firm at $ 2.69; the weighted average cost of capital as 16.The expected growth rate for
Q1- Assume a constant dividend per share for a firm at $ 2.69; the weighted average cost of capital as 16.The expected growth rate for the firm is 9.48.Determine the market price for the firm.
Q2- From the financial results provided, identify the investment growth rate (percent). The asset reinvestment rate of the firm is estimated as 19.92 percent
ItemUnitValue $
Net profit million 182
Dividend million 37
Equity million 741
Debt million 361
Q3- Determine the expected market price applying the CAPM model for a firm with a beta of 2.The risk free rate is 4.9 and index return is 6.2.The current traded price is $ 597.38.
Q4- Given:
Net profit after tax (value $ million) = 835
Capital employed (Value$ million) = 1021
Weighted average cost of capital (Percentage) = 14.81
Determine the Economic Value Addition (Value$ million) for the firm.
Q5- Determine the lower boundary of a European put option with a spot price of $ 127.92 and a strike price of $ 191.32.The risk-free rate is 2.75 percent.The option expires in one month (30 days).Assume a 365- day year.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started