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# 1. Company A just paid a dividend of 200 The risk free rate of return is 1 and the market risk premium is 12 The beta of the company's stock is 120 If you know the company's dividend is

1. Company A just paid a dividend of \$2.00. The risk-free rate of return is 1% and the market risk premium is 12%. The beta of the company's stock is 1.20. If you know the company's dividend is growing at a constant rate of 3%, What is the intrinsic value of the company 5 years from today?

2. Goog company has an EBIT*(1-tax) of \$9,737, a depreciation of \$1,851, change of NWC of \$381, and a capital expenditure of \$3,438. The growth rate of free cash flow is expected to be 17.68% for next two years. The beta of the firm is 1.19, the target capital structure of the firm is 6% debt 94% equity, the cost of debt is 3%, the tax rate is 40%, the market risk premium is 8% and the risk free rate is 1%. Given a comparable Price to Ebitda ratio of 14.15 and a market value of debt of \$4,200, what is firmâs equity value using the FCFF approach?

 A. \$138,792 B. \$214,190 C. \$102,120 D. \$360,012

Aug 31 2020 View more View Less

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