An analyst assesses that a company' new human resources policies will lead to less hiring, increased productivity, and lower costs to train new employees. Based on this assessment, the analyst is most likely to adjust the discounted cash flow valuation model by:单项选择题

A

increasing the expected operating margins

B

reducing future capital expenditures in balance sheet forecasts

C

decreasing cost of capital

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You want to start a business that you believe can produce cash flows of $44,000, $61,000, and $80,000 at the end of each of the next three years, respectively. At the end of three years you think you can sell the business for $200,000. At a discount rate of 9.7 percent, what is this business worth today?

The following is a four-year forecast for ThinkSmart LLC.  Year FCFF 2007 -85 2008 -32 2009 62 2010 66 Estimate the market value of ThinkSmart at the end of 2006. Assume that after 2010, FCFF will  remain constant at $126 million. ThinkSmart’s WACC is 14% and its tax rate is 40%.

Assume you’ve forecasted and calculated the following free cash flows to the firm. Year FCFF 1 $264.08 2 $271.54 3 $274.85 You have also made the assumption that after year 3, the cash flows will grow at a constant rate of 4% per year indefinitely. The company has a WACC of 9.5%. Given this information, what is the value of this firm?

Part 1Kenneth Cole Productions​ (KCP) had sales of $ 518.3$518.3 million in 2005. Based on​ KCP's past profitability and investment​ needs, you expect EBIT to be 9 %9% of​ sales, increases in net working capital requirements to be 10 %10% of any increase in​ sales, and net investment​ (capital expenditures in excess of​ depreciation) to be 8 %8% of any increase in sales. KCP has $ 99.7$99.7 million in​ cash, $ 3.2$3.2 million in​ debt, 20.920.9 million shares​ outstanding, a tax rate of 37 %37%​, and a weighted average cost of capital of 11 %11%.a. Suppose you believe​ KCP's initial revenue growth rate will be between 4 %4% and 11 %11% ​(with growth slowing in equal steps to 4 %4% by year​ 2011). What range of share prices for KCP is consistent with these​ forecasts?b. Suppose you believe​ KCP's EBIT margin will be between 7 %7% and 10 %10% of sales. What range of share prices for KCP is consistent with these forecasts​ (keeping KCP's initial revenue growth at 9 %9% with growth slowing in equal steps to 4 %4% by year​ 2011)?c. Suppose you believe​ KCP's weighted average cost of capital is between 10 %10% and 12 %12%. What range of share prices for KCP is consistent with these forecasts​ (keeping KCP's initial revenue growth and EBIT margin at 9 %9% with growth slowing in equal steps to 4 %4% by year​ 2011)?d. What range of share prices is consistent if you vary the estimates as in parts​ (a), (b), and​ (c) simultaneously? That​ is:[table] | Case 1​ (Best) | Case 2​ (Worse) Revenue growth rate | 4 %4% | 11 %11% EBIT margin | 7 %7% | 10 %10% WACC | 12 %12% | 10 %10% [/table] Part 1a. Suppose you believe​ KCP's initial revenue growth rate will be between 4 %4% and 11 %11% ​(with growth slowing in equal steps to 4 %4% by year​ 2011). What range of share prices for KCP is consistent with these​ forecasts? A. The range of share prices consistent with these forecasts is from $ 28.46$28.46 to $ 22.33$22.33. B. The range of share prices consistent with these forecasts is from $ 19.66$19.66 to $ 27.60$27.60. C. The range of share prices consistent with these forecasts is from $ 16.60$16.60 to $ 32.77$32.77. D. The range of share prices consistent with these forecasts is from $ 25.81$25.81 to $ 22.96$22.96. Part 2b. Suppose you believe​ KCP's EBIT margin will be between 7 %7% and 10 %10% of sales. What range of share prices for KCP is consistent with these forecasts​ (keeping KCP's initial revenue growth at 9 %9% with growth slowing in equal steps to 4 %4% by year​ 2011)? A. The range of share prices consistent with these forecasts is from $ 28.46$28.46 to $ 22.33$22.33. B. The range of share prices consistent with these forecasts is from $ 19.66$19.66 to $ 27.60$27.60. C. The range of share prices consistent with these forecasts is from $ 16.60$16.60 to $ 32.77$32.77. D. The range of share prices consistent with these forecasts is from $ 25.81$25.81 to $ 22.96$22.96. Part 3c. Suppose you believe​ KCP's weighted average cost of capital is between 10 %10% and 12 %12%. What range of share prices for KCP is consistent with these forecasts​ (keeping KCP's initial revenue growth and EBIT margin at 9 %9% with growth slowing in equal steps to 4 %4% by year​ 2011)? A. The range of share prices consistent with these forecasts is from $ 25.81$25.81 to $ 22.96$22.96. B. The range of share prices consistent with these forecasts is from $ 16.60$16.60 to $ 32.77$32.77. C. The range of share prices consistent with these forecasts is from $ 28.46$28.46 to $ 22.33$22.33. D. The range of share prices consistent with these forecasts is from $ 19.66$19.66 to $ 27.60$27.60. Part 4d. What range of share prices is consistent if you vary the estimates as in parts​ (a), (b), and​ (c) simultaneously? That​ is:[table] | Case 1​ (Best) | Case 2​ (Worse) Revenue growth rate | 4 %4% | 11 %11% EBIT margin | 7 %7% | 10 %10% WACC | 12 %12% | 10 %10% [/table]Choose the correct answer. A. The range of share prices consistent with these forecasts is from $ 25.81$25.81 to $ 22.96$22.96. B. The range of share prices consistent with these forecasts is from $ 16.60$16.60 to $ 32.77$32.77. C. The range of share prices consistent with these forecasts is from $ 28.46$28.46 to $ 22.33$22.33. D. The range of share prices consistent with these forecasts is from $ 19.66$19.66 to $ 27.60$27.60.

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