ACT349H1F F07 Test 1 v10 Privacy ID A

ACT349H1F F07 Test 1 v10 Privacy ID A - Your name in...

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ACT349H1F F07 Test 1 v10 Privacy ID A Your name in format Family Name, Personal Names:__________________________ Your student ID:_______________________________________________________ UNIVERSITY OF TORONTO ACT349H1F TERM TEST 1 4:00 pm Oct 3, 2007 Instructor: Keith Sharp PhD FSA CFA NOTES: 1. Calculators allowed 2. Scrap paper is to be handed in with this book. It’s OK to write on book. 3. This is a closed book exam. 4. Multiple choice: only your letter answer on the Scantron sheet will be graded. 5. OK to write in book. 6. 10 points correct, two if blank, zero points if wrong 7. So expectation if you guess is the same as leaving a blank. 8. Timing: 50 minutes 9. Make sure you’ve indicated your letter answers in answer sheet before time is called 10. Name and ID on this book, on answer sheet and on any scrap paper please. 11. Please stay in your seats and don’t talk till all papers have been collected. 12. Photo ID on desk during exam please. 13. Good luck 14. Please code your Privacy ID as the answer to question 11 on your answer sheet. Your privacy ID is shown in the page footer at the foot of each page of this test. The Privacy ID is needed so that the correct order of correct answers can be used in grading your answers.
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UNIVERSITY OF TORONTO ACT349H1F FALL 2007 TERM TEST 1 ACT349H1F F07 Test 1 v10 Privacy ID A 1.(aaaBMA08-00-0122.01-00 F07TT1 Sharp1420041512) Treesearch in Ocean, the globally successful Waterloo ON supplier of the Bluefeather device to coastal ornithologists, recently announced its financial results for 2012. Sales revenues were $8 billion, as at the end of 2012, salaries are always 40% of revenues and other expenses are always 25% of revenues. The date today is January 1, 2013. Yesterday, Treesearch bought a $15 billion leaf-detector, which the tax authorities will allow to be depreciated at $5 billion per year starting with the Dec 31, 2013 tax payment made in respect of 2013 profits. Treesearch revenue, salaries and expenses are growing at 8% per year but Treesearch will permanently and costlessly cease operations when the leaf-detector ends its useful life December 31, 2016 (not 2015). The payout ratio is 100% since Treesearch requires no capital investment except the leaf detector, which it bought with available cash. Investors are requiring a 9% return (per annum effective) on stock as risky as that of Treesearch. Calculate the market value today of each of Treesearch’s 100 million outstanding shares. Tax rate is 35%.
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This note was uploaded on 09/27/2009 for the course STA ACT349 taught by Professor Sharp during the Fall '05 term at University of Toronto- Toronto.

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ACT349H1F F07 Test 1 v10 Privacy ID A - Your name in...

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