Midterm 02 Final

# Midterm 02 Final - Name ID Section UGBA 103 Midterm Exam 02...

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Name: ID Section: UGBA 103 Midterm Exam 02 The answers on this midterm are entirely my own work. I neither gave nor received any aid while taking this midterm. _____________________ Signature Any midterm that is turned in without a signature indicating that you have taken this oath or the names below filled out accurately will be assigned a grade of zero. Name of the person on your left _______________________ Name of the person on your right ______________________ Please remember to write your name legibly on every page . This exam will be graded out of 105 points. There is an extra credit question so the total attainable number of points is 110. The number in parentheses after each question is the amount of points each question counts. The exam consists of 12 questions and 9 pages. You may use a calculator on this exam. You may NOT use any other calculation device including a computer. You cannot bring any written material into this exam. 123456 P a r t I S u b - T o t a l 7 8 9 10 11 12 Part II Sub-Total Total GOOD LUCK!

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Page 2 of 9 Part 1: Valuation 1) Next period’s earnings of Wachovia are expected to be negative, but the current price is \$8. What can you say about the present value of growth opportunities relative to the current price? [5 Points] 2) a) Please determine the stock price of Apple using the Comparable method and the information about Microsoft. You should base your calculation on the PEG measure. This measure is widely used in the industry and is defined as the P/E ratio over the growth rate: / PE PEG g = The applied growth rate g is usually a 5 year compound average growth rate (CAGR), i.e.
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Midterm 02 Final - Name ID Section UGBA 103 Midterm Exam 02...

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