417 week 03 - questions with answers

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1、WeekThreeQuestionsA.Dividenddiscountmodel1.R&BChapter15,pg606,Question10(a)P0=D1ke-gke=(D1/P)+g($0.60/$20.00)+8.0%=11%2.R&BChapter15,pg606Question11(a)P0=D0(1+g)ke-g=1.20(1+0.08)(0.11–0.08)$43.20Question11(b)Two-stagedividenddiscountmodelHighgrowthrat

2、e12%Lowgrowthrate8%Requiredreturnonequity=11%YearDividendsTerminalvalueDtorVtDiscountPVfactorDtorVt01.2011.201.341/(1+1.207211(1.12)0.11)21.201.501/(1+1.217422(1.12)0.11)331.201.20(1+0.12)(1+62.361/(1+45.597133(1.12)0.08)0.11)(0.11–0.080)Tot48.03B.FC

3、FF/FCFE1.R&BChapter15,pg619,Question26Recall:1FCFE=NI+NCC–FCInv–WCInv+Netborrowing=NI–(FCInv–Dep)–WCInv+Netborrowing#Common=84.0TotalPershare200120022003G27.0%27.0%13.0%NI$80$0.952$1.2090$1.5355$1.7351+Dep230.2740.34800.44190.4994-FCInv380.4520.57400.7

4、2900.8238-WCInv410.4880.61980.78710.8894+NetBorrowing00.0000.000.000.00FCFE240.2860.36320.46130.5213TerminalValue52.13DiscountFactor.140.87720.76950.7695PVFCFE.3186.355040.114TotPVFCFE40.787Terminal=FCFE2003Valueke–g=0.5213(0.14–0.13)$52.1322.R&BChapte

5、r15,pg622,Question30Part(a)Calculatekeke=RF+[E(RM)–RF]=6.0+1.25x5.0=12.25D0=TotalDividendspaid#commonshares=$22,47013,000=$1.7285/shareTwo-stagedividenddiscountmodelHighgrowthrate17%Lowgrowthrate9%YDividendsTerminalvalueDtorVtDiscountfactorPVDtorVt0

6、1.7285111.7285(1.17)2.02231/(1+1.801610.1225)221.7285(1.17)2.36611/(1+1.877820.1225)3331.7285(1.17)1.7285(1+0.17)(1+95.61591/(1+67.603830.09)0.1225)(0.1225–0.090)Tot71.283Part(b)Recall:FCFE=NI+NCC–FCInv–WCInv+Netborrowing=NI–(FCInv–Dep)–WCInv+Netborrow

7、ing#Common=13,000TotalNI$37,450+Dep10,500-FCInv15,000-WCInv(5-8+6+1.5)5,500+NetBorrowing4,000FCFE31,450FCFE/Share$2.4192Two-stageFCFEmodelHighgrowthrate17%Lowgrowthrate9%YDividendsTerminalvalueDtorVtDiscountfactorPVDtorVt02.4192112.4192(1.17)2.83051/

8、(1+2.521610.1225)222.4192(1.17)3.31171/(1+2.628320.1225)3332.4192(1.17)2.4192(1+0.17)(1+133.82621/(1+94.619830.09)0.1225)(0.1225–0.090)Tot99.7743.MrWonderisevaluatingacompanyusingtheFCFFandFCFEvaluationapproachesandthefollowingdatawasco