Mexican Motors’ market cap is 360 billion pesos. Next year’s free cash flow is 9.9 billion...
Mexican Motors stock sells for 200 pesos per share and next year's dividend is 8.5 pesos. Security analysts are forecasting earnings growth of 7.5% per year for the next five years. a) Assume that earnings and dividends are expected to grow at 7.5% in perpetuity. What rate of return are investors expecting? b) Mexican Motors has generally earned about 12% on book equity (ROE = 0.12) and paid out 50% of earnings as dividends. Suppose it maintains the same ROE...
Given these two exchange rates, $1 = 12.354 Mexican pesos and $1 = €0.7759, compute the cross-rate between the Mexican peso and the euro. State this exchange rate in pesos and in euros. (Do not round intermediate calculations. Round your answers to 4 decimal places.)
Given these two exchange rates, $1 = 12.268 Mexican pesos and $1 = €0.7624, compute the cross-rate between the Mexican peso and the euro. State this exchange rate in pesos and in euros. (Do not round intermediate calculations. Round your answers to 4 decimal places.) Cross-rate of 1 peso Cross-rate of 1 euro pesos
Given these two exchange rates, $1 = 12.349 Mexican pesos and $1-€0.7684, compute the cross- rate between the Mexican peso and the euro. State this exchange rate in pesos and in euros. (Do not round intermediate calculations. Round your answers to 4 decimal places.) Cross rate of 1 peso Cross rate of 1 euro pesos
You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows: Years Cash Flow 0 - 100 1 - 10 + 18 On the basis of the behavior of the firm’s stock, you believe that the beta of the firm is 1.45. Assume that the rate of return available on risk-free investments is 6% and that the expected rate of return on the market...
You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows: Years Cash Flow 0 – 100 1 - 10 + 18 On the basis of the behavior of the firm’s stock, you believe that the beta of the firm is 1.45. Assume that the rate of return available on risk-free investments is 6% and that the expected rate of return on the market...
You are a consultant to a firm evaluating an expansion of its current business. The cash-flow forecasts (in millions of dollars) for the project are as follows: Years Cash Flow 0 -100 1 - 10 +16 On the basis of the behavior of the firm's stock, you believe that the beta of the firm is 1.33. Assume that the rate of return available on risk-free investments is 6% and that the expected rate of return on the market portfolio is...
Consider the following two mutually exclusive projects: Year Cash Flow (X) -$15,300 6,770 7,350 4,870 Cash Flow (Y) - $15.300 7,410 7,670 3,750 WN a. What is the IRR of Project X? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the IRR of Project Y? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What...
Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$54,000 -$54,000 30,000 17,600 24,000 21,600 18,000 26,000 12,800 25,600 6-1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 14 percent. What is...
Piercy, LLC, has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$54,000 -$54,000 30,000 17,600 24.000 21,600 18.000 26,000 12,800 25,600 8-1. What is the IRR for each of these projects? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) a-2. If you apply the IRR decision rule, which project should the company accept? b-1. Assume the required return is 14 percent. What is...