Question 1 2 pts The following returns reflect annual returns to ABC's stock and the S&P 500. ABC S&P 500 2017 .05 .10 2018 -.05 - 10 2019 .015 .03 2020 -.025 -.05 What is your best guess at the beta for ABC's stock 050 0 25 0.75 O 1.00 O 1.25 O 1.50 ABC is considering an expansion project. ABC has net debt of $100.000 and equity of $300,000. The expected market risk premium is 8% and the risk free rate is 4%. If the beta for ABC's equity is .75, the return on debt is 5% and the tax rate is 25%, what is the weighted average cost of capital for ABC? O 8.44% O 6.84% 0 9.98%. O 11.53% 0 13.08% D Question 3 2 pts Opening a new store will cost $100,000 today all of which can be expensed immediately and used to shield other income at the company. The tax rate on income is 35%. What are the expected cash flows for this expansion project at time 0 (today)? 0 -65.000 looo 0 -100,000 0 -35.000 0-135,000 Question 4 2 pts ABC's analyst projects that ABC's expansion will add $50,000 in incremental after-tax free cash flows in year 1. After year 1 your analyst believes that the annual growth rate will be 3% in perpetuity. Assuming that ABC's WACC is 9.5%, what is the PV of these incremental free cash flows? 0 769.231 0 92.694 0723.569 0 706.455 D Question 5 2 pts You collect data for a comparable firm to the business you are trying to sell. The comparable firm has: Debt = 100.000 Shares Outstanding - 10,000 EBITDA = 60,000 - Excess Cash of $20.000 Share Price = $50 Using the Enterprise Value to EBITDA ratio, what is your estimate of your company's value if it has $5,000 of EBITDA? O 48.333 0 41,667 O 50,000 O 57.333