Problem 12.23 – Gabriel Industries
Essentials of Corporate Finance
Ross, Westerfield, and Jordan
10th Edition
Find the cost of equity with the DCF and SML method.
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Find the cost of equity with the DCF and SML method.
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Given the firm’s beta, the dividend, the growth rate in dividends, the market return, and Treasury bills, determine the cost of equity using the dividend model and also the SML method.
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Given EBIT, depreciation, change in net working capital, capital spending, the value of debt, shares outstanding, terminal growth rate, WACC, and tax rate… find the price per share.
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Given EBIT, depreciation, change in net working capital, capital spending, the value of debt, shares outstanding, terminal growth rate, WACC, and tax rate… find the price per share.
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Given EBIT, depreciation, change in net working capital, capital spending, the value of debt, shares outstanding, WACC, tax rate, year-five sales, and price-sales ratio… find the price per share.
This problem is different than the other Derry Corp problem that uses the perpetual growth rate to estimate the terminal value. This one uses the price-sales ratio instead! Please be careful in unlocking the correct solver for your problem.
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Given EBIT, depreciation, change in net working capital, capital spending, the value of debt, shares outstanding, terminal growth rate, WACC, tax rate, year five sales, and price-sales ratio… find the price per share.
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Determine the share price for Homes Co. given EBIT and a lot of other data. What is the price per share of the company’s stock?
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The firm is considering building a new manufacturing facility that will produce after-tax cash flows in perpetuity. What is the NPV?
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Given that the company plans to set up a manufacturing plant to produce new RDSs, the market data on DEI The firm wishes to set up a manufacturing plant to produce radar detection systems (RDS). Compute the cash flow at time 0, the project’s discount rate, the aftertax salvage value of the plant, the OCF, and finally, the NPV and IRR of the project.
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Find what projects have a higher expected return, what projects should be accepted, and what projects would be incorrectly accepted or rejected?
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