Pts question 3 calculate the terminal value of the

0 / 1 pts
Question 3
Calculate 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

0 / 1 pts
Question 4
Swamp & 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

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 6
Swamp & 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%.
20X1 20X2 20X3
FCF
198 198 198
Depreciation 4 4 4

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