WACC

Positive NPV : Identify and describe a long-term investment project (either real or fictional) that would likely require significant capital commitment.

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Positive NPV Financial managers may rationalize that it is in their immediate interest to invest in short-term projects because they bring the most shareholder benefits; this is, in other words, the so-called agency problem. However, what could be the long-term consequences of that strategy? Watch the short agency problem video (7:14) below for an explanation … Read more

Capital Budgeting: Create a sensitivity analysis, a scenario analysis or a Monte Carlo Simulation for the capital budgeting project.What do you notice? 

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Capital Budgeting 1) Create a sensitivity analysis, a scenario analysis or a Monte Carlo Simulation for the capital budgeting project. What do you notice? 2) Is wealth being generated by the company with this project over a period of 5 years (Hint: calculate the NPV using equal cash flows for years 1 – 4 (same … Read more

Compute the implied growth rate with the Gordon Growth model for the following &quot,dividend aristocrats&quot.

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Compute the WACC of your Telsa. Complete the Excel with the Microsoft valuation. Make sure you include the following additional computations: Reinvestment rate and return on capital as computed in homework 8 for the year 2018. Sensitivity analysis of the final stock price for the terminal value, that is, compute the stock price that comes … Read more