
A.What is economic value added (EVA) and what are the different ways of calculating EVA? B. Why can.
A.What is economic value added (EVA) and what are the different ways of calculating EVA? B. Why can EVA serve as a foundation for an integrated financial management system? C. What considerations should you bear in mind, as you look at various...
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yesterday

A. Discuss the ways by which a firm can reduce its cost of capital. B. What is market value added...
A. Discuss the ways by which a firm can reduce its cost of capital. B. What is market value added (MVA)? C. What adjustments to the book value of shareholder’s funds to get the adjusted shareholder’s funds? D. Discuss the properties of...
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yesterday

A.What factors have stimulated greater interest in value creation? B. What is value based management
A.What factors have stimulated greater interest in value creation? B. What is value based management (VBM)? C. Discuss the ways and means by which a firm can increase cash flows from existing investments. D. What are the main entry barriers that give...
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yesterday

A. Ordinarily, what should the valuation report contain, at a minimum? B. What is goodwill? How does
A. Ordinarily, what should the valuation report contain, at a minimum? B. What is goodwill? How does it appear in the balance sheet of the firm? C. Discuss the following methods for valuation of goodwill: average profits method, super profits method,...
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yesterday

A.Explain the following methods for estimating the brand contribution: utility cost method, return..
A.Explain the following methods for estimating the brand contribution: utility cost method, return on capital method, premium profi ts method, and retail premium method. B. Identify the key information required for valuing intangible assets. C. What...
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yesterday

A. What are the attributes of an intangible asset? B. Describe the following intangible assets:...
A. What are the attributes of an intangible asset? B. Describe the following intangible assets: brands, intellectual property, publishing rights, licenses, and franchises. C. Discuss the purposes and bases for valuing intangible assets. How would you...
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yesterday

Redstone Ltd, a PE investor is considering investing 7000 million in the equity of Orbital, a...
Redstone Ltd, a PE investor is considering investing 7000 million in the equity of Orbital, a startup IT company. Redstone’s required return from this investment is 40 percent and its planned holding period is 6 years. Orbital has projected an...
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yesterday

Laxmi Capital Ventures, a PE investor, is considering investing 500 million in the equity of...
Laxmi Capital Ventures, a PE investor, is considering investing 500 million in the equity of Omitech, a startup IT company. Laxmi’s required rate of return from this investment is 40 percent and its planned holding period is 4 years....
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yesterday

A.What are the sources of complexity in financial statements? B. How can financial distress be...
A.What are the sources of complexity in financial statements? B. How can financial distress be handled in valuation? C. Discuss how miscategorisation of capital expenses in an intangibleintensive firm can be Corrected. D. Discuss the importance of...
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yesterday

A.How should one value cash, cross holdings, and other nonoperating assets. B. How do stock options
A.How should one value cash, cross holdings, and other nonoperating assets. B. How do stock options affect the value of equity? C. What is the value of control? D. What makes up transaction costs? E. What are synergies? How are they valued?
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yesterday

A. Discuss a twoscenario approach for valuing cyclical companies. B. What considerations should be.
A. Discuss a twoscenario approach for valuing cyclical companies. B. What considerations should be borne in mind while valuing a bank? C. What considerations should be borne in mind while valuing an insurance company? D. Discuss the CCI Guidelines...
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yesterday

A. Discuss the unique issues that arise in the context of a multibusiness company B. What are the..
A. Discuss the unique issues that arise in the context of a multibusiness company B. What are the special considerations that should be borne in mind in crossborder valuation? C. Discuss the guidelines that are helpful in valuing companies in...
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yesterday

A builder owns a plot of land that can be used for either nine or fifteen apartment units. The...
A builder owns a plot of land that can be used for either nine or fifteen apartment units. The construction costs of these two alternatives are Rs. 9 million and Rs. 17 million respectively. The current price per apartment is Rs. 1.2 million. The...
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yesterday

A. What is the value of a European call option (no dividends) with an exercise price of Rs.50 and an
A. What is the value of a European call option (no dividends) with an exercise price of Rs.50 and an expiration date three months from now if the stock price is Rs.40, the variance of the stock is 0.40, and the riskfree rate is 14 percent? B. Your...
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yesterday

Beta Company’s equity is currently selling for Rs.` 60. In a year from now it can rise or fall. On..
Beta Company’s equity is currently selling for Rs.` 60. In a year from now it can rise or fall. On the downside it may fall to Rs. 45. The call option on Beta’s equity has a value of Rs. 5. If the interest rate is 16 percent, to what...
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yesterday

A.Alpha Company’s equity is currently selling for ` 100 per share. In a year from now it can rise to
A.Alpha Company’s equity is currently selling for ` 100 per share. In a year from now it can rise to Rs.150 or fall to Rs. 90. The interest rate is 15 percent. What is the value of a call option on Alpha Company’s equity as per the...
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yesterday

You have to decide whether to invest Rs. 50 million a year from now to manufacture and distribute a.
You have to decide whether to invest Rs. 50 million a year from now to manufacture and distribute a new drug which is in an advanced stage of development. The drug has to undergo further clinical trials on patients for one year, for which all the...
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yesterday

A.Describe the riskneutral valuation method. B. Discuss the adjustments made for dividend payment..
A.Describe the riskneutral valuation method. B. Discuss the adjustments made for dividend payment in the BlackScholes model. C. What are the merits of the binomial option model? D. What mistakes are made in real option valuation. E. Assess the use...
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yesterday

A.Show why a higher variability of the stock price has a positive effect on the value of call...
A.Show why a higher variability of the stock price has a positive effect on the value of call option. B. Derive the value of call option in the binomial world using the option equivalent method. C. What is the value of a call option as per the...
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yesterday

A. What is the payoff of a European call option and put option? B. Define the payoffs of a call...
A. What is the payoff of a European call option and put option? B. Define the payoffs of a call option and a put option from the point of view of the option writer (or seller). C. Specify the boundaries within which the value of a call option falls....
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yesterday

A. What are the limitations of the DCF model? B. What is the difference between standard NPV and...
A. What are the limitations of the DCF model? B. What is the difference between standard NPV and contingent NPV? C. What factors influence the value of flexibility? 4. Describe the different types of options embedded in real projects. D. Define the...
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yesterday

A.Discuss the guidelines for corporate valuation. B. What is reverse financial engineering? C. How..
A.Discuss the guidelines for corporate valuation. B. What is reverse financial engineering? C. How would you adjust for control and nonmarketability? D. What are some of the popular myths surrounding valuation and the reality corresponding to them?
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yesterday

A.How is asset value assessed under the ‘strategic approach to valuation’? B. How is current...
A.How is asset value assessed under the ‘strategic approach to valuation’? B. How is current earnings power value estimated under the ‘strategic approach to value’? C. What is franchise value? D. What is total value? E. How...
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yesterday

A.What are the common misconceptions about the efficient market hypothesis and how would you dispel.
A.What are the common misconceptions about the efficient market hypothesis and how would you dispel them? B. What is the empirical evidence in favour of and against market efficiency? C. Discuss the implications of efficient market hypothesis for...
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yesterday

A. Discuss the reasons for the potential divergence between book value and market value. B. How are.
A. Discuss the reasons for the potential divergence between book value and market value. B. How are various assets valued to reflect replacement cost? C. What is fair value accounting? What are the pros and cons of fair value accounting? D. What is...
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yesterday

A. Samtel Limited’s WACC is 14 percent and its g is 10 percent. What is Samtel’s EV/FCFF multiple?..
A. Samtel Limited’s WACC is 14 percent and its g is 10 percent. What is Samtel’s EV/FCFF multiple? B. Micron Company has an ROIC of 20 percent, g of 12 percent, and WACC of 15 percent. What is Macron’s EV/BV multiple? C. VSK...
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yesterday

A.Solitaire Company’s ROIC is 20 percent and its g is 12 percent. Solitaire’s DA is 8 percent and...
A.Solitaire Company’s ROIC is 20 percent and its g is 12 percent. Solitaire’s DA is 8 percent and its tax rate is 25 percent. What is Solitaire’s EV/EBITDA multiple? The WACC is 13%. B. Muthot Company has a tax rate of 30 percent...
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yesterday

A. Avinash Limited’s ROE is 24 percent and its r is 18 percent. Avinash’s dividend payout ratio is..
A. Avinash Limited’s ROE is 24 percent and its r is 18 percent. Avinash’s dividend payout ratio is 0.3. What is Avinash’s PEG multiple? B. Cheran Corporation’s ROE is 15 percent and its r is 16 percent. Cheran’s dividend...
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yesterday

A.Delta Corporation’s ROE is 16 percent and its r is 14 percent. Delta’s dividend payout multiple is
A.Delta Corporation’s ROE is 16 percent and its r is 14 percent. Delta’s dividend payout multiple is 0.25 and its g is 12 percent. What is Delta’s P/B multiple from a fundamental point of view? B.. White Limited has a NPM of 7...
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yesterday

A. What ratios are commonly used for various situations or sectors? B. What are the best practices..
A. What ratios are commonly used for various situations or sectors? B. What are the best practices with respect to multiples? C. Why is relative valuation so popular? What are weakness of relative valuation? C. Vidyut Company’s ROE is 20...
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yesterday

A. Discuss the steps involved in relative valuation. B. Discuss the following equity valuation...
A. Discuss the steps involved in relative valuation. B. Discuss the following equity valuation multiples: pricetoearnings multiple, pricetobook value multiple, and pricetosales multiple. C. Discuss the following enterprise valuation (EV)...
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yesterday

The various metrics of Modern Retail for years 0, 1, 2, and 3 are as follows: Beyond year 3, ROE...
The various metrics of Modern Retail for years 0, 1, 2, and 3 are as follows: Beyond year 3, ROE will be 18%, the required return by equity investors will be 12%, and the growth rate will be 9%. What will be the value of equity? Compute the value...
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yesterday

The current earnings per share (E 0) of Metatools Limited is Rs.10.00. For the next five years, the.
The current earnings per share (E 0) of Metatools Limited is Rs.10.00. For the next five years, the earnings per share is expected to grow at 15 percent and the dividend payout ratio in this period will be 30 percent. The growth rate in earnings per...
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yesterday

Apex Limited has an invested capital of 1,000 million. Its return on invested capital (ROIC) is 18..
Apex Limited has an invested capital of 1,000 million. Its return on invested capital (ROIC) is 18 percent and its weighted average cost of capital (WACC) is 14 percent. The expected growth rate in Apex’s revenues and invested capital will be...
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yesterday

You have been given the following projections for Spectrum Corporation Compute the enterprise value.
You have been given the following projections for Spectrum Corporation Compute the enterprise value of Spectrum Corporation, using the adjusted present value method, under the following assumptions. • Beyond year 5, the cash flow to the firm...
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yesterday

Vijay Limited has an invested capital of 100 million. Its return on invested capital (ROIC) is 14...
Vijay Limited has an invested capital of 100 million. Its return on invested capital (ROIC) is 14 percent and its weighted average cost of capital (WACC) is 12 percent. The expected growth rate in Vijay Limited’ revenues and invested capital...
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yesterday

The following projections have been developed for Omega Limited The cost of equity for Omega Limited
The following projections have been developed for Omega Limited The cost of equity for Omega Limited is 16 percent. The FCFE will grow at a constant rate of 12 percent after 5 years, what is the value of Omega’s equity?
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yesterday

A.The current dividend on an equity share of International Chemicals Limited is 4.00. The present...
A.The current dividend on an equity share of International Chemicals Limited is 4.00. The present growth rate is 20 percent. However, this will decline linearly over a period of 8 years and stabilise at 10 percent. What is the intrinsic value per...
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yesterday

A. Determine the intrinsic value of an equity share, given the following data : Last dividend (D 0).
A. Determine the intrinsic value of an equity share, given the following data : Last dividend (D...
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yesterday

The Commonwealth Corporation’s earnings and dividends have been growing at the rate of 12 percent...
The Commonwealth Corporation’s earnings and dividends have been growing at the rate of 12 percent per annum. This growth rate is expected to continue for 4 years. After that the growth rate would fall to 8 percent for the next four years....
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yesterday

A. Fizzle Limited is facing gloomy prospects. The earnings and dividends are expected to decline at.
A. Fizzle Limited is facing gloomy prospects. The earnings and dividends are expected to decline at the rate of 4 percent. The previous dividend was 1.50. If the current market price is 8.00, what rate of return do investors expect from the...
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yesterday

A. How is the value of equity calculated as per the maintainable profits model. B. The equity stock.
A. How is the value of equity calculated as per the maintainable profits model. B. The equity stock of Max Limited is currently selling for 32 per share. The dividend expected next is 2.00. The investors’ required rate of return on this stock...
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yesterday

A. How do you measure free cash flow to equity? B. How is enterprise value defined under the APV...
A. How do you measure free cash flow to equity? B. How is enterprise value defined under the APV approach? C. What is economic profit (EP)? How is the value of the firm defined under the EP model? D. Discuss the applicability and limitations of the...
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yesterday

A.What are the problems with the enterprise DCF model? B. Discuss the following dividend discount...
A.What are the problems with the enterprise DCF model? B. Discuss the following dividend discount models: zero growth model, constant growth model, two stage growth model, H model, and three stage growth model. C. What are the advantages and...
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yesterday

Samanta Company has 20 million equity shares outstanding. The book value per share is 40 and the...
Samanta Company has 20 million equity shares outstanding. The book value per share is 40 and the market price per share is 120. Samanta has two debenture issues outstanding. The fi rst issue has a face value of 300 million, 12 percent coupon, and...
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yesterday

A. Azeez Corporation’s WACC is 12 percent and its tax rate is 35 percent. Azeez’s pretax cost of...
A. Azeez Corporation’s WACC is 12 percent and its tax rate is 35 percent. Azeez’s pretax cost of debt is 10 percent and its debtequity ratio is 1:1. The riskfree rate is 11 percent and the market risk premium is 8 percent. What is the...
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yesterday

A. Rao Corporation has a target capital structure of 60 percent equity and 40 percent debt. Its cost
A. Rao Corporation has a target capital structure of 60 percent equity and 40 percent debt. Its cost of equity is 18 percent and its pretax cost of debt is 13 percent. If the relevant tax rate is 35 percent, what is Rao Corporation’s WACC? B....
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yesterday

A.Magnum Cements is an unlisted cement company whose debtequity ratio is 1.8 and tax rate is 30...
A.Magnum Cements is an unlisted cement company whose debtequity ratio is 1.8 and tax rate is 30 percent. There are three listed firms, A, B, and C engaged wholly in cement manufacturing. Their equity betas, debtequity ratios, and tax rates are as...
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yesterday

A. What are the best global practices in measuring the cost of capital? B. The returns on the equity
A. What are the best global practices in measuring the cost of capital? B. The returns on the equity stock of Auto Electricals Limited and the market portfolio over a 12year period are given below: (a) Calculate the beta for the stock of Auto...
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yesterday

A. How is the cost of debt calculated? B. How is the cost of preference calculated? C. Discuss the..
A. How is the cost of debt calculated? B. How is the cost of preference calculated? C. Discuss the following bases for determining the proportions (or weights) in the WACC calculation: book values, target capital structure, and market values. D. What...
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yesterday