pts Question 3 Calculate the terminal value of the tax shield given the

Pts question 3 calculate the terminal value of the

This preview shows page 3 - 7 out of 12 pages.

0 / 1 pts Question 3Calculate the terminal value of the tax shield given the following information. Assume we are calculating it for the next year (that is, assume there is no planning period, just a terminal value). The tax rate is 30%. Debt will be $112 million. Assume debt grows at the same annual rate as the firm which is 2%. The cost of debt is 10% while the cost of equity is 12%. u Answered u Answered 42 margin of error +/- 1 rrect Answer
Image of page 3
0 / 1 pts Question 4Swamp & Sand Industries has the following data. At a discount rate of 7%, calculate its Discounted Cash Flow (DCF) for the years presented. 0 / 1 pts Question 5
Image of page 4
For Palm and Sun Industries, calculate depreciation given the following data: Beg Net PPE $1,695, End Net PPE $3,319 Cap Ex $1,791.There were no sales nor liquidations of assets. u Answered u Answered 167 margin of error +/- 1 rrect Answer rrect Answer Capex = End Net PPE - Beginning Net PPE + Depreciation Expense 0 / 1 pts Question 6Swamp & Sand Industries has the following data. At a discount rate of 12%, calculate its Adjusted Present Value (APV) for 20X1 through 20X3. Interest expense is $5 million per year. The interest rate on debt is 6%. The corporate tax rate is 40%.20X120X220X3FCF198198198Depreciation444
Image of page 5
u Answered u Answered 481 margin of error +/- 1 rrect Answer rrect Answer At 12% 3 yrs, the PVA1 = 2.4 So FCF *2.4 = DCF. To find the PVA1 (the present value of a $1 annuity): 1=P/YR 3=N 12=I/YR 1=PMT 0=FV PV=2.4
Image of page 6
Image of page 7

You've reached the end of your free preview.

Want to read all 12 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture