# Ntu Career

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• Published : March 20, 2013

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Score: 120

out of 120 points (100%)

1.

award:

10 out of 10 points
Which of the following valuation measures is often used to compare firms which have no earnings? Price-to-book ratio P/E ratio Price-to-cash flow ratio Price-to-sales ratio

2.

award:

10 out of 10 points
When Google's share price reached \$475 per share Google had a P/E ratio of about 68 and an estimated market capitalization rate of 11.5%. Google pays no dividends. What percentage of Google's stock price was represented by PVGO? 92% 87% 77% 64%

3.

award:

10 out of 10 points
A firm is expected to produce earnings next year of \$3.00 per share. It plans to reinvest 25% of its earnings at 20%. If the cost of equity if 11%, what should be the value of the stock? \$27.27 \$50.00 \$66.67 \$70.00 g = .25 x .20 = .05; P = 3.0/(.11 - .05) = 50.00

4.

award:

10 out of 10 points
The free cash flow to the firm is reported as \$198 million. The interest expense to the firm is \$15 million. If the tax rate is 35% and the net debt of the firm increased by \$20 million, what is the market value of the firm if the FCFE grows at 3% and the cost of equity is 14%? \$1,893 billion

\$1,893 billion \$2,497 billion \$2,585 billion \$3,098 billion FCFE = 198 - 15(1 - .35) + 20 = 208.25. Value = 208.25/(.14 - .03) = 1893.

5.

award:

10 out of 10 points
If a firm has a free cash flow equal to \$50 million and that cash flow is expected to grow at 3% forever, what is the total firm value given a WACC of 9.5%? \$679 million \$715 million \$769 million \$803 million Total value = 50/(.095 - .03) = 769.23

6.

award:

10 out of 10 points
A firm has a stock price of \$54.75 per share. The firm's earnings are \$75 million and the firm has 20 million shares outstanding. The firm has an ROE of 15% and a plowback of 65%. What is the firm's PEG ratio? 1.50 1.25 1.10 1.00

7.

award:

10 out of 10 points
Ace Frisbee Corporation produces a good that is very mature in their product life...