MGMT 326: Spring 2013
Chpt 10 (Stocks): Data Case
Solution
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Financial Management Spring 2013 Chapter 10 Data Case Data COC, Debt Debt / Capitalization Equity / Capitalization Tax rate COC, Equity WACC, AT Growth rate ROI, new invest
B
C
D
E
F
G
H
I
J
rD
rE rWACC g ROI
3.48% 77.90% 22.10% 17.93% 39.70%
for AA bonds from BS from BS average of (2011, 2010) by backing out! The CAPM estimation will be quite different! verification 11.00%
We will use WACC for DDM!
11.00% given 4.00% given 11.00% by assumption
Q. 1. Yahoo! Finance summary info as of Price 1/25/2013 EPS (TTM) 1/25/2013
22.18 1.29
Q. 2. Yahoo! Finance key statistics info as of Shares O/S 1/25/2013 10,450,000 in '000 Payout ratio 1/25/2013 26.00% This is wrong! DPS (TTM) 1/25/2013 0.70 DPS (Fwd) 1/25/2013 0.76 Q. 3. Yahoo! Finance analyst estimates as of E(Growth, 5 yr) 1/25/2013 Q. 4. Yahoo! Finance competitors as of P/E (TTM, Industry) 1/25/2013
54.26% This is correct!
11.06%
15.72
Q. 5. Yahoo! Finance financial statements as of Income stmt 1/25/2013 Balance sheet 1/25/2013
Vora. BDH2E_C10_DataCaseSol: Sol
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MGMT 326: Spring 2013
Chpt 10 (Stocks): Data Case
Solution
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CF stmt
B
1/25/2013
C
Extra 5.03% 0 0.70
D
E
F
G
H
I
J
Q. 6-A. Dividend discount model Sustain growth g Dividend E(P5) Total CF PV0(CF) Value, per share
1 0.7774 0.7774 0.7004
2 0.8634 0.8634 0.7008
3 0.9589 0.9589 0.7011
4 1.0649 1.0649 0.7015
5 1.1827 20.8115 21.9942 13.0525
6 1.2422
15.8563
Q. 6. Discounted free cash flow model Part a 3-yr Average as of EBIT/S 