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- What will price be in 1 year? c. What do you expect to happen to price in the following year? (Round your dollar value to 2 decimal places.) d. What is your estimate of DEQS’s intrinsic value per share if you expected DEQS to pay out only 10% of earnings starting in year 6? (Do not round intermediate calculations. Round your answer to 2 decimal places.)d. What is the rate of return on your margined position (assuming again that you invest $30,000 of your own money) if XTel is selling after one year at (i) $56; (ii) $50; (iii) $44? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)(3) Today you have paid $275 for an investment that pays $100 in one year, $500 in two years,and $X in 4 years. Assuming the market interest rate is 100% and the net present value of theinvestment is zero, what must be true about X?(a) X is greater than $2,500(b) X is greater than or equal to $2,000 but less than $2,500(c) X is greater than or equal to $1,500 but less than $2,000(d) X is greater than $1,200 but less than $1,500(e) X is less than or equal to $1,200
- Mexican Motors’ market cap is 250 billion pesos. Next year’s free cash flow is 9.5 billion pesos. Security analysts are forecasting that free cash flow will grow by 8.50% per year for the next five years.a. Assume that the 8.50% growth rate is expected to continue forever. What rate of return are investors expecting? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b-1. Mexican Motors has generally earned about 13% on book equity (ROE = 13%) and reinvested 50% of earnings. The remaining 50% of earnings has gone to free cash flow. Suppose the company maintains the same ROE and investment rate for the long run. What will be the growth rate of earnings? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.) b-2. What would be the rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)DeltaCo has a payout ratio of 0.6 and it reinvests the remainder of earnings in new projects. If next year's EPS (EPS1) will be $7.18, new projects have expected return of 15%, and investors require a rate of return is 10.8%, what is the present value of the firm's growth opportunities? Round your answer to the nearest penny.Finance Whadden National Bark is undertaking statec GAP analysis. In the one yoar time bucket, it holds $43 million in rate-sen income if interest rates are expected to change by 1.28%? . Round your final answer to the nearest dollar (Ex. $O) and submit decreases as a negative.
- A firm will earn a taxable net return of $500 million next year. If it took on debt today, it would have to pay creditors\varepsilon(rDebt) = 5% + 10% x wDebt2. Thus, if the firm has 100% debt, the financial markets would demand 15% expected rate of return. Further, assume that the financial markets will lend the firm capital at this overall net cost of 15%, regardless of how the firm is financed. The firm is in the 25% marginal tax bracket. 1. If the firmis fully equity-financed, what is its value? 2. Using APV, if the firm is financed with equal amounts of debt and equity today, what is its value? 3. Using WACC, if the firm is financed with equal amounts of debt and equity today, what is its value? 4. Does this firm have an optimal capital structure? If so, what is its APV and WACC?Mexican Motor's market cap is 200 billion pesos. Next year's cash flow is 8.6 billion pesos. Security analyst are forecasting that free cash flow will grow by 7.60% per year for the next five years. a. Assume that the 7.60 growth rate is expected to continue forever. What rate of return are investors expecting? b1. Mexican Motors has generally earned about 10% on book equity (ROE= 10%) and reinvested 50% of earnings. The remaining 50% of earnings has gone to free cash flow. Suppose the company mantians the same ROE and investment rate for the long run. What will be the growth rate of earnings? b2. What would be he rate of return?5 EMA's 2022 sales were $10 million. If sales grow at 5% per year, how large will they be 5 years later, in 2027? Note: Apply the FV formula. The growth rate replaces the interest rate. $12.8 million O $12.6 million O $12.6 million O $12.9 million « Previous A EFF F6 Next Connect CAPS
- What is the present value for a future value of FV=$500,000 at time t=36 if the interest rate is r=0.05 (e.g., r=5%)? What is the interest rate “r” if PV=$100 and the FV=$350 in year t=12? What is the interest rate “r” if PV=$1250 and the FV=$2150 in year t=10? How long will it take to double your investment if the interest rate is r=0.06 (r=6%)? How long will it take to increase your investment by 2.5 times if the interest rate is r=0.14 (r=14%)? Which is the better option if the interest rate is r=0.10 (r=10%)? Show all work used to arrive at your answer. a. Option I: Receive $1000 today at time t=0. b. Option II: Receive $1615 at time t=5.10) Which is the better option if the interest rate is r=0.07 (r=7%)? Show all work used to arrive at your answer. a. Option I: Receive $510 today at time t=0. b. Option II: Receive $1000 at time t=10.Suppose SBD Bank has RSA of $150m and RSL of $140m. If interest rates rise by 1 percent on both RSAs and RSLs, what would be the expected annual change in net interest income (ΔNII) based on $GAP? Show your work. ( How a commercial bank’s value would be affected by an increase in economic growth?K Assume that Ideko's market share will increase by 0.40 percent per year as shown in the table, (e.g., Ideko's market share will be 10.00% in 2006). What production capacity will Ideko require each year for the next five years? When will an expansion become necessary (i.e., when will production volume exceed the current level by 50%)? e. What production capacity will Ideko require each year for the next five years? First compute the projected annual market share. Then, using these projections, calculate the projected annual production volume: (Round the volumes to one decimal place and the percentage of market share to two decimal places.) dd Sales Data Market Size (000 units) Market Share Production Volume (000 units) Data table Growth/Year 2005 4.80% 0.40% % (Click on the following icon in order to copy its contents into a spreadsheet.) - X Ideko Sales Assumptions Sales Data Growth/Year 2005 Market Size (000 units) Market Share 4.80% 10.000 0.40% 9.6% Check answer