Managerial Finance Final Exam free essay sample

NOT  normally regarded as being a barrier to hostile takeovers? (Points : 5)|   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Abnormally high executive compensation Targeted share repurchases Shareholder rights provisions Restricted voting rights Poison pills | 2. (TCO F) Which of the following statements is correct? (Points : 5)| The MIRR and NPV decision criteria can never conflict. The IRR method can never be subject to the multiple IRR problem, while the MIRR method can be. One reason some people prefer the MIRR to the regular IRR is that the MIRR is based on a generally more reasonable reinvestment rate assumption. The weighted average cost of capital is 13%, and the FCFs are expected to continue growing at a 5% rate after Year 3. Assuming that the ROIC is expected to remain constant in Year 3 and beyond, what is the Year 0 value of operations, in millions?   Free cash flow:  Ã‚  Ã‚  Ã‚   -$15  Ã‚  Ã‚  Ã‚  Ã‚  $10  Ã‚  Ã‚  Ã‚  Ã‚  $40 a. $315 b. $331 c. $348 d. $367 e. $386 (TERMINAL VALUE)TV4 = FCF3(1 + g)/(WACC g) = $40(1. 05)/(0. 13 0. 05) = $525 (PV)Value of Operations = -/(1. We will write a custom essay sample on Managerial Finance Final Exam or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page 13) + $10/(1. 13)2 + ($40 + $525)/(1. 13)3 = $386 5. (TCO G) Based on the corporate valuation model, Bernile Inc.s value of operations is $750 million. Its balance sheet shows $50 million of short-term investments that are unrelated to operations, $100 million of accounts payable, $100 million of notes payable, $200 million of long-term debt, $40 million of common stock (par plus paid-in-capital), and $160 million of retained earnings. What is the best estimate for the firms value of equity, in millions? a. $429 b. $451 c. $475 d. $500 e. $525 Value of equity = Value of operations + short term investments long term debt notes payable = $750 + $50 $200 $100 = $500