11.The following information was collected from the financial statements of the Hiller Corp. for the year ending December 31, 2000:

§ Earnings per share = $4.50

§ Capital Expenditures per share = $3.00

§ Depreciation per share = $2.75

§ Increase in working capital per share = $0.75

§ Debt financing ratio = 30 percent

§ Cost of equity = 12 percent

The financial leverage for the firm is expected to be stable.

The FCFE for the base-year will be:

A)   $3.00.

B)   $4.15.

C)   $3.80.

D)   $4.85.

12. If earnings, capital expenditures, depreciation and working capital are all expected to grow constantly at 5 percent, the value per share using stable-growth FCFE model will be:

A)   $54.29.

B)   $62.84.

C)   $57.00.

D)   $72.75.

13.The following table provides background information on a per share basis for TOY, Inc., in the year 0:

TOY, Inc.'s, target debt ratio is 30 percent and has a required rate of return of 12 percent. Earnings, capital expenditures, depreciation, and working capital are all expected to grow by 5 percent a year in the future.

In year 1, what is the forecasted free cashflow to equity (FCFE) for TOY, Inc.?

A)   $4.31.

B)   $4.53.

C)   $6.06.

D)   $3.56.

14.What is the value of TOY, Inc.'s, stock given the above assumptions?

A)   $61.57.

B)   $64.71.

C)   $50.86.

D)   $86.57.

15.A firm's free cash flow to equity (FCFE) in the most recent year is $50M and is expected to grow at 5 percent per year forever. If its shareholders require a return of 12 percent, the value of the firm's equity using the single-stage FCFE model is:

A)   $417M.

B)   $437M.

C)   $750M.

D)   $714M.

答案和详解如下：

11.The following information was collected from the financial statements of the Hiller Corp. for the year ending December 31, 2000:

§ Earnings per share = $4.50

§ Capital Expenditures per share = $3.00

§ Depreciation per share = $2.75

§ Increase in working capital per share = $0.75

§ Debt financing ratio = 30 percent

§ Cost of equity = 12 percent

The financial leverage for the firm is expected to be stable.

The FCFE for the base-year will be:

A)   $3.00.

B)   $4.15.

C)   $3.80.

D)   $4.85.

The correct answer was C)

Base-year FCFE = EPS - (Capex - Depr)*(1 - Debt Ratio) – Incr. in WC*(1 - Debt Ratio) = $ 4.50 - ($3.00 - $2.75)(1 - 0.30) - $0.75(1 - 0.30) = $3.80.

12. If earnings, capital expenditures, depreciation and working capital are all expected to grow constantly at 5 percent, the value per share using stable-growth FCFE model will be:

A)   $54.29.

B)   $62.84.

C)   $57.00.

D)   $72.75.

The correct answer was C)

Value per share = $57.00 = ($3.80 * 1.05)/(0.12 - 0.05).

13.The following table provides background information on a per share basis for TOY, Inc., in the year 0:

Current Information	Year 0
Earnings	$5.00
Capital Expenditures	$2.40
Depreciation	$1.80
Change in Working Capital	$1.70

TOY, Inc.'s, target debt ratio is 30 percent and has a required rate of return of 12 percent. Earnings, capital expenditures, depreciation, and working capital are all expected to grow by 5 percent a year in the future.

In year 1, what is the forecasted free cashflow to equity (FCFE) for TOY, Inc.?

A)   $4.31.

B)   $4.53.

C)   $6.06.

D)   $3.56.

The correct answer was D)

Earnings = 5*1.05 = 5.25, capital expenditures = 2.4*1.05 = 2.52, deprecation = 1.8*1.05 = 1.89, change in working capital = 1.7*1.05 = 1.785, FCFE = Earnings per share – (Capital Expenditures – Depreciation)(1 - Debt Ratio) – Change in working capital (1 – Debt Ratio) = 5.25 – (2.52 – 1.89)(1 - 0.3) – (1.785)(1 - 0.3) = 3.56.

14.What is the value of TOY, Inc.'s, stock given the above assumptions?

A)   $61.57.

B)   $64.71.

C)   $50.86.

D)   $86.57.

The correct answer was C)

The value of the stock = FCFE₁/(r-g_n) = 3.56/(0.12 - 0.05) = 50.86.

15.A firm's free cash flow to equity (FCFE) in the most recent year is $50M and is expected to grow at 5 percent per year forever. If its shareholders require a return of 12 percent, the value of the firm's equity using the single-stage FCFE model is:

A)   $417M.

B)   $437M.

C)   $750M.

D)   $714M.

The correct answer was C)    

The value of the firm's equity is: $50M x 1.05/(0.12 - 0.05) = $750M