10. Heinz Inc expects to generate earnings over the next five years of Php 50,000.00; Php 60,000.00; Php 65,000.003; Php 70,000.00; and Php 75,000.00. Using the Capitalization of Earnings Method, what is the estimated value of the firm using 10.00% required rate of return. a) Php 640,000.00 b) Php 657,378.72 c) Php 657,738.72 d) Php 604,000.00

10. Heinz Inc expects to generate earnings over the next five years of Php 50,000.00; Php 60,000.00; Php 65,000.003; Php 70,000.00; and Php 75,000.00. Using the Capitalization of Earnings Method, what is the estimated value of the firm using 10.00% required rate of return. a) Php 640,000.00 b) Php 657,378.72 c) Php 657,738.72 d) Php 604,000.00

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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11. Heinz Inc expects to generate earnings over the next five years of Php 50,000.003; Php 60,000.00; Php 65,000.00; Php 70,000.00; and Php 75,000.00. Using the Capitalization of Earnings Method, what is the estimated value of the firm using 8.00% required rate of return. a) Php 600,000.00 b) Php 800,000.00 c) Php 500,000.00 d) Php 700,000.00 12. Ernesto, Inc has projected average earnings every year of Php 100,000,000. Debt to Equity Ratio is 3:1 After tax cost of debt is 5% while the cost of equity is 10%. The Board of Directors of the company decided to sell the company for 1,000,000,000 computes for the Economic Value Added (EVA). a) Php 37,500,000.00 b) Php 50,000,000.00 c) Php 0 d) Php 25,000,000.00
ABC Enterprise would like to evaluate/analyze a potential investment.. Given the following:Investment amount - 450,000 (2022)Dividends / Revenue stream - 100,000 for the first year and an interval of 5,000 for the succeeding years Discount rate - 14%a. NPV for the perio 2023 through 2029;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following:a. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
10 Alawad Company’s capital employed on 1-1 2020 was OMR 150,000 and the profits for the last five years were as follows: Year 2015 OMR 10,000, Year 2016 OMR 20,000, Year 2017 OMR 10,000, Year 2018 OMR 25,000 and Year 2019 OMR 15,000. Calculate Super profit given that the normal rate of return is 5%. a. OMR 7,500 b. OMR 8,500 c. None of the options are correct d. OMR 16,000
Assume your organization wishes to make a Php 200,000 investment with a private equity firm in 2021. Taking into account all of the risks, the current discount rate is 12%, and the revenue stream/dividends are as follows: 2022 50002023 60002024 70002025 80002026 90002027 100002028 11000 Determine the following: DO IT IN EXCELa. NPV for the period 2022 through 2028;b. Total NPV using manual computation;c. Total NPV using the Excel function; andd. IRR rate.
14. Suppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate + 1.5%. Capital expenditure Cash dividends Cash flow from operations before interest expense a). b). c). Yr.1 250,000 140,000 750,000 Assuming the Prime rate = 7.5% each year. What will be the interest payment at year 3? 25,000 50,000 45,000 53,000 10,000 Yr. 2 125,000 140,000 780,000 Yr. 3 75,000 140,000 800,000
Problem 01-04 (algo) A firm's current profits are $950,000, These prafits are expected to grow indefinitely at a constant annual rate of 6 percent. If the firm's apportunity cost of funds is 8 percent, determine the value of the firm: Instructions: Enter your respanses rounded to two decimal places. a. The instant before It pays out current profits as dividends. million b. The instant after it pays out current profits as dividends. million
Hernandez Corporation expects to have the following data during the coming year. What is Hernandez's expected ROE? (Show your work) Assets = $200,000 D/A = 65% EBIT = $25,000 Interest rate = 8% Tax rate = 40%
ABC Sdn Bhd has a gross sales of RM 12000000 for year 2021. This company needs to pay 10% for annual fixed capital, 15% for operation capital and 10% for business taxes. Based on the net profit, they plan to invest 50% of the amount into a stock market. Estimate the amount of his money after THREE (3) years for the following cases:(i) Profit forecast is based on fixed interest rate of 10% per annum.(ii) The profit forecast is 10% per annum compounded every SIX (6) month.
You are evaluating a prospective LBO investment and determine that the Year 5 free cash flow (FCF) estimate is $850 million. Additionally, based on related work you estimate that the appropriate discount rate is 8.5% and the long term growth rate is 3.5%. Based on the perpetuity growth method, the Terminal Value of the company is _________ in Year Group of answer choices a. $17.6 bn, year 5 b. $17.0 bn, year 6 c. $10.0 bn, year 5 d. $17.6 bn, year 6
10) Find the present value of the following stream of a firm's cash flows, assuming that the firm's opportunity cost is 14 percent. YEAR AMOUNT 1-5 20,000$/YR 6-10 35,000$/YR
A firm's current profits are $450,000. These profits are expected to grow indefinitely at a constant annual rate of 3 percent. If the firm's opportunity cost of funds is 6 percent, determine the value of the firm: Instructions: Round your responses to 2 decimal places. a. The instant before it pays out current profits as dividends. $ million b. The instant after it pays out current profits as dividends. $ million

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