Valuing a Firm versus valuing Equity, Cost of Equity, Cost of Debt, Sensitivity Analysis

	Cf0	Cf1	Cf2	Cf3
	-10	10	20	30
Free cash Flow	4%
Risk Free rate	1.1
Beta	12%
Market Risk Premium	10%
Cost of Debt	10%
Tax rate	30%
Target D/A	2:3
Current D/A	1:3

QUESTION 1: Considering the free Cash Flow given are Free Cash Flow to Firm, calculate the present value of cash flows as on day 0 (choose the closest answer)

A) 37.8

B) 29.5

C) 30.4

D) 32.4

QUESTION 2: The 10 year US notes rate is 7% and 2 year short term rate is 8.5%. Please calculate the cost of equity of the firm based on info only from this question and the given table (including beta and market risk premium infos)

A) 20.2%

B) 21.7%

C) 19.5%

D) 21.3%

QUESTION 3: A Company has a Debt of 50m and free cash available of 2m. Consider the cash flow from above table to Free cash flow to equity and use the cost of equity related figures only from table. Please calculate the EV (closes figure)

1. 80
2. 86
3. 90
4. 83

QUESTION 4: Calculate the WACC from the above information (closest number)

A) 11%

B) 10.4%

C) 13.8%

D) 12.4%

QUESTION 5: Please refer to the table above. The terminal growth rate of a firm is 2%. Calculate the Terminal value of the firm in Year 3 considering the WACC calculated in Q 4

A) 364.2

B) 368.5

C) 332.2

D) 338.6