Questions from General Investment

Q: For Bill’s Bakery described in Problem 13, suppose instead that current

For Bill’s Bakery described in Problem 13, suppose instead that current earnings per share are $2.56. Calculate the share price for Bill’s Bakery.

Q: In Problem 1, suppose the current share price is $60

In Problem 1, suppose the current share price is $60. If all other information remains the same, what must the liquidating dividend be? Data from Problem 1: JJ Industries will pay a regular dividend...

Q: You are going to value Lauryn’s Doll Co. using the FCF

You are going to value Lauryn’s Doll Co. using the FCF model. After consulting various sources, you find that Lauryn’s has a reported equity beta of 1.4, a debt-to-equity ratio of 0.3, and a tax rate...

Q: Using your answer to Problem 3, calculate the appropriate discount rate

Using your answer to Problem 3, calculate the appropriate discount rate assuming a risk-free rate of 4 percent and a market risk premium of 7 percent. Data from Problem 3: You are going to value Lau...

Q: Lauryn’s Doll Co. had EBIT last year of $40 million

Lauryn’s Doll Co. had EBIT last year of $40 million, which is net of a depreciation expense of $4 million. In addition, Lauryn’s made $5 million in capital expenditures and increased net working capit...

Q: What is the estimated value of Country Point in a proposed spin

What is the estimated value of Country Point in a proposed spin-off? a. $144.5 million b. $162.6 million c. $178.3 million

Q: Using your answers from Problems 3 through 5, value Lauryn’s Doll

Using your answers from Problems 3 through 5, value Lauryn’s Doll Co. assuming her FCF is expected to grow at a rate of 3 percent into perpetuity. Is this value the value of the equity?

Q: If a firm has an EV of $750 million and EBITDA

If a firm has an EV of $750 million and EBITDA of $165 million, what is its EV ratio?

Q: Xytex Products just paid a dividend of $1.62 per

Xytex Products just paid a dividend of $1.62 per share, and the stock currently sells for $28. If the discount rate is 10 percent, what is the dividend growth rate?

Q: Star Light & Power increases its dividend 3.8 percent per

Star Light & Power increases its dividend 3.8 percent per year every year. This utility is valued using a discount rate of 9 percent, and the stock currently sells for $38 per share. If you buy a shar...