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Quiz - Individual Assignment 5 Fuad

This document contains an 8 question quiz about finance concepts like net present value, internal rate of return, profitability index, and stock valuation. The questions provide cash flow information or financial statements and ask students to calculate metrics like NPV, IRR, and estimated stock price based on the data. Students are allowed to discuss the quiz questions with friends and the instructor will address any questions during class.

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Md. Shahariar Koushik
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17 views4 pages

Quiz - Individual Assignment 5 Fuad

This document contains an 8 question quiz about finance concepts like net present value, internal rate of return, profitability index, and stock valuation. The questions provide cash flow information or financial statements and ask students to calculate metrics like NPV, IRR, and estimated stock price based on the data. Students are allowed to discuss the quiz questions with friends and the instructor will address any questions during class.

Uploaded by

Md. Shahariar Koushik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Individual Assignment 5

Started: May 28 at 2:34pm

Quiz Instructions
Choose the closest alternative.

You are allowed to talk to your friends. I will address your questions, if any, during class this week. Will help you
solve the problems.

Question 1 6 pts

Please find below the cashflow of the XYZ Project. If the required rate of return of this project is
12%, please find out the Net Present Value (NPV), Internal Rate of Return (IRR), & Profitability
Index (PI). 

CF (in million
Yr
BDT)
0 -1000
1 200
2 300
3 400
4 500
5 600

NPV of the project - $361 million BDT

IRR of the project - 23.3 %

PI of the project - 1.36

Question 2 6 pts

Please find below the cashflow of the XYZ Project. If the required rate of return of this project is
12%, please find out the Net Present Value (NPV), Internal Rate of Return (IRR), & Profitability
Index (PI). 

CF (in million
Yr
BDT)
0 -1000
1 600
2 500
3 400
4 300
5 200

NPV of the project - $523 million BDT

IRR of the project - 36.1 %

PI of the project - 1.52

Question 3 1 pts

Suppose ABC Inc., has earnings per share of $1.08. If the average P/E of comparable stocks is
24.5, estimated value of ABC using the P/E as a valuation multiple will be -

$4.41

$26.46

$1.08

$22.70

$24.50

Question 4 1 pts

XYZ Inc. is expected to pay a $1.20 per share dividend at the end of this year. The dividend is
expected to grow at a constant rate of 5% a year. The required rate of return on the stock, rs, is
12%. The estimated value per share of XYZ’s stock will be closest to -

$18.00

$10.00

$17.14

$24.00
Question 5 1.5 pts

Watkins Inc.'s current free cash flow is $100,000, and this FCF is expected to grow at a constant
5% rate. The weighted average cost of capital is WACC 12%. Watkins currently holds $325,000
of nonoperating marketable securities. Its long-term debt is $1,000,000, but it has never issued
preferred stock. Watkins has 50,000 shares of stock outstanding. Calculate the estimated per
share stock price.

$16.5

$15.5

$15.1

$14.1

Question 6 1.5 pts

Watkins Inc.'s expected free cash flow is one year from now $100,000 and this FCF is expected
to grow at a constant 5% rate. The weighted average cost of capital is WACC 12%. Watkins
currently holds $325,000 of nonoperating marketable securities. Its long-term debt is
$1,000,000, but it has never issued preferred stock. Watkins has 50,000 shares of stock
outstanding. Calculate the estimated per share stock price.

$15.5

$14.1

$15.1

$16.5

Question 7 1.5 pts

Watkins Inc.'s current free cash flow is $100,000, and this FCF is expected to grow at a constant
5% rate. The weighted average cost of capital is WACC 12%. Watkins currently holds $325,000
of nonoperating marketable securities. Its long-term debt is $1,000,000 and preferred stock is
$50,000. Watkins has 50,000 shares of stock outstanding. Calculate the estimated per share
stock price.

$14.1
$16.5

$15.5

$15.1

Question 8 1.5 pts

Watkins Inc.'s expected free cash flow one year from now is $100,000 and this FCF is expected
to grow at a constant 5% rate. The weighted average cost of capital is WACC 12%. Watkins
currently holds $325,000 of nonoperating marketable securities. Its long-term debt is $1,000,000
and preferred stock is $50,000. Watkins has 50,000 shares of stock outstanding. Calculate the
estimated per share stock price.

$15.1

$15.5

$16.5

$14.1

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