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Unformatted text preview: Problems (12 problems) Stock valuation using zero dividend growth and the constant dividend growth model. Calculate the expected return (using the DGM model) and the required return (using the CAPM model) Calculate the dividend growth rate (using the DGM-i.e. rearranging DGM to solve for g) Initial investment and terminal cash flow calculations Calculation of incremental OCFs for the new and old machine for years 1 and/or 2 Payback period calculation IRR and NPV calculation and acceptance criteria, crossover rate Choice of project(s) based on rationing and the IRR rule...
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- Spring '08