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The Discounted Cash Flows Model

Monetary Return

You invest $100 (at time 0) and expect to receive $115 in cash in one year. Your required return is 9 percent. a) Calculate the value of your investment at time 0 using discounted cash flow techniques. b) Calculate the value of your investment using residual earnings techniques c) Suppose that your accountant demanded that

Toyota Capital Valuation: Justifying Current Market

Justify the current market price of the organization's equity, if any, using various capital valuation models. Show calculations that support your findings, including those involving rates of return Organization is Toyota and here is the link. http://www.toyota.co.jp/en/ir/library/annual/pdf/2009/index.html.

Interest Rate to Fund a College Education in 18 Years

1) You expect your newly born child to attend college in 18 years. You have $12,000 to set aside for that purpose. You also expect that the total cost of college education to be $100,000 by that time. Calculate the interest rate at which you have to invest today to achieve your goal. SHOW CALCULATIONS AND WHAT NUMBERS GO IN

New York Times potential acquisition target for Google: What are the issues?

The New York Times potential acquisition target for Google, new possible investment item, what problems are you going to have in estimating the cash flow that might be emanating from the initial investment and problems in getting it funded? Issues might be: ? Risk ? Cost ? Politics (getting it through committees) ? Publ

Present Value, Amortization with Equal Principal Payments,

Your company will generate $65,000 in cash flow each year for the next 10 years from a new information database. The computer system needed to set up the database costs $307,000. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) 1) If you can borrow the money to buy the computer system at 8.25 perce

Accounting: Finance Analysis

Recalculate the forecasts in Table 8-4 assuming that the NOPAT profit margin is held steady for the first five years of the forecast and then declines by 0.1 percentage points per year thereafter (keeping all the other assumptions unchanged). Show all calculations and provide an interpretation. (See attached Excel file for Ta

Stock Valuation: Declining and Constant Growth Stock

PREFERRED STOCK VALUATION Fee Founders has perpetual preferred stock outstanding that sells for $60 a share and pays a dividend of $5 at the end of each year. What is the required rate of return? PREFERRED STOCK VALUATION Ezzell Corporation issued perpetual preferred stock with a 10% annual dividend. The stock currently y

Finance: MPV, IRR, MIRR, Payback Period, Discounted Payback

Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its WACC is 12%. a) What's the project's NPV? b) What's the project's IRR? c) What's the project's MIRR? d) What's the project's payback? e) What's the project's discounted payback?

Calculating a Present Value Problem

Please help answer the following problems. A. Find the present values of the following cash flow streams at 8% compounded annually. 0 1 2 3 4 5 ------------------------------------------------ Stream A $0 $100 $400 $400 $400 $300 Stream B $0 $300 $400 $400

Effect of Debt Transactions

The three typical accounting events associated with borrowing money through a bond issue are: 1. Exchanging the bonds for cash on the day of issue. 2. Making cash payments for interest expense and recording amortization when applicable. 3. Repaying the principal at maturity. Required A. Assuming the bonds are issued a

Calculate Free Cash Flows and Incremental Debt for Project

Anderson & Company plans to make a $50 million investment, initially funded completely with debt. The free cash flows of the investment and Anderson & Company's incremental debt from the project are shown below (see the attachment).

Financial Management: IBM Stock Analysis

NOTE: Please follow the instructions; I must use the specific instructions that I attached as well as "current market data." MS Word document has actual assignment. MS PowerPoint has specific instructions: note the updated figure I placed on slide #1 for 10 year treasury is current (9 sep 09) PDF has IBM's stock data you are

Performing discounted cash flow analysis

When performing discounted cash flow analysis, what costs are disregarded? Why? What error(s) occur if these costs are included in the analysis? Please properly cite your references. Thanks.

JP Morgan Chase Stock

Provide a buy or sell recommendation and an estimated price target. Should include the following 5 sections: 1) Background of the company with a life cycle analysis 2) Analysis of Return on Equity 3) The company's future growth rate of earnings 4) Analysis of its required rate of return using the CAPM 5) Intrinsic v

Wal-Mart: Cost of Equity, WACC, Unlevered Cost of Equity, & Beta

Estimate the cost of equity, WACC, and unlevered cost of equity for Wal-Mart, Incorporated (NYSE: WMT). Find the beta for Wal-Mart and: 1. Estimate Wal-Mart's cost of equity. 2. Estimate Wal-Mart's weighted-average cost of capital (WACC). 3. Estimate Wal-Mart's unlevered cost of equity.

Finding the Current Price of XYZ's Common Stock

The last dividend paid by XYZ Company was $1.00. XYZs growth rate is expected to be a constant 5%. XYZ's required rate of return on equity (ks) is 10%. What is the current price of XYZ's common stock?

Interest Rate Swap for Fixed Payment Side

There is a 2 year swap contract (fix to float) signed on the swap rate of 5%; Interest will be exchanged every half year. Now suppose the swap contract start from now on and the current zero rates are in the table below. Calculate how much the swap value right now for the fixed payment side. Maturity(Yrs) Zero Rate(Continuo

Present Value of Expected Future Savings

At the end of 2005, Uma Corporation was considering undertaking a major long-term project in an effort to remain competitive in its industry. The production and sales departments determined the potential annual cash flow savings that could accrue to he firm if it acts soon. Specifically, they estimate that a mixed stream of fu

Finance MCQ: investment banker, zero-growth, treasury stock, stock value

1.________ is hired by a firm to find prospective buyers for its new stock or bond issue. 1. An investment banker 2. A securities analyst 3. A trust officer 4. A commercial loan officer 2. The ________ is utilized to value preferred stock. 1. variable growth model 2. Gordon model 3. constant growth model 4. zero