a. Using the information on the Excel sheet provided, Please thoroughly explain the steps on how to determine the expected levered-before-tax-annual rate of return on your capital. b. please determine the portion of the return that is expected from the annual cashflows and the portion that is expected as a result of property price appreciation.
Q: Please show full steps and correctly thanks
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a. Using the information on the Excel sheet provided, Please thoroughly explain the steps on how to determine the expected levered-before-tax-annual
b. please determine the portion of the return that is expected from the annual cashflows and the portion that is expected as a result of property price appreciation.
Step by step
Solved in 5 steps
- Part AUsing the following free cash flows and cost of equity = 7%, discount FCF year 1 back to time 0 (today). FCF year 1 = 500; FCF year 2 = 520; FCF year 3 = 560; FCF year 4 = 590; FCF year 5 = 610 a) 429.36 b) 467.29 c) 512.85 d) 422.10Part B Using the following expected interest payments, cost of debt = 5%, and tax-rate = 21%, discount the year 4 expected payment back to time 0 (today). Expected interest year 1 = 50; year 2 = 35; year 3 = 20; year 4 = 10; 5 = 0 a) 9.31 b) 10.11 c) 13.65 d) 6.50What is the result in B12? A 1 Settlement Date 2 Maturity Date 3 First Call Date 4 Time to Maturity (Years) 5 Coupon Rate 6 Required Return 7 Frequency 8 9 10 Basis 11 Value 12 Yield to Call 12 Face Value Call Price O a. 7.39% O b. 12.68% O c. 10.05% O d. 5.58% B 10/23/2020 10/23/2030 10/23/2025 $ $ 10 7.00% 10.00% 2 1,000 1,035 0 $813.07 ?The following table shows the projected free cash flows of an acquisition target. The potential acquirer wants to estimate its maximum acquisition price at an 8 percent discount rate and a terminal value in year 5 based on the perpetual growth equation with a 4 percent perpetual growth rate. Year Free cash flow 1 2 -840 -420 Maximum acquisition price 3 a. Estimate the target's maximum acquisition price. (Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.) 4 5 224 748 Maximum acquisition price b. Estimate the target's maximum acquisition price when the discount rate is 7 percent and the perpetual growth rate is 5 percent. (Do not round Intermediate calculations. Round your answer to the nearest whole dollar amount.)
- Consider the following money market information being quoted: Which of the following statements is true? Particulars GBP Interest Rate THB Interest Rate Spot Rate 1-year Expected Spot Rate Bid Rate 6.100% 10.550% THB5.6601/GBP THB5.9037/GBP C. Ask Rate 6.125% 10.625% THB5.6622/GBP THB5.9961/GBP a. There is an arbitrage which can only be made by initially borrowing GBP and then investing in THB. b. More than one of the options in this question are correct. The THB is selling at a premium to the GBP in the future. O d. There is an arbitrage which can only be made by initially borrowing THB and then investing in GBP.Reported Horiron Period S millions 2018 2019 2020 2021 2022 Terminal Period $14.768 $15454 $16591517,589 $18.644 2711 2880 9.462 10.028 10630 11268 11544 Sales S15017 NOPAT 3,053 3236 JA10 NCA 12.183 Answer the following requirements assuming a discount rate (WACC) of 735, a terminal period growth rate of 2% common shares outstanding of 328.1 miion, and net nonoperating obligations (NN0) of 16,204 million (al Estimate the value of a share of ITWS common stock using the discounted cash flow (DCF model as of December 31, 2018 Instructions: • Round all answers to the nearest whole number, except for discount factors, shares outstanding (do not roundi and stock price per share. Round discount factors to 5decimal.places • Round stock price per share to two decimalplaces Do not use negative signs with any of your answers Forecast Horizon 2021 Reported 2020 2022 Terminal Period (S milions) 2018 2019 increase in NOA FCFF INOPAT increase in NOA) Discount factor 1/ Present value of horuon FCFF…What is the return on the following investment? Original Cost Selling Price Distributions Percent Investment or Invested $ of Investment Received $ Return Bond $955.00 $1000.00 $240.00 34.07% 29.84% 29.21% 32.88% 26.99%
- Use Table 8 to answer the next two questions. Assume the committed capital is $100, the management fee is 2.00%, and the carried interest is 20.00%. Year Called-down Paid in capital Mgmt Fees $26 $31 $21 $10 $12 2015 2016 2017 2018 2019 What is the carried interest in 2019? O $9.85 O $5.40 $9.12 4 O $11.20 Table 8 Operating NAV before Carried NAV after Results Distributions Interest Distributions Distributions -$14 $6 $11 $41 $46 $5 $10 हैTerm in years: Rate: 2 OA $74.862 OB $02.385 OC. $57,339 OD $40.000 10 35% 30 43755 3.125% The table above shows the interest rates available from investing in msk free US Treasury securbes with different investment ferms. If an investment offers a risk-free cash flow of $85,000 in ten years' time, what is the present value (PV) of that cash flow?Cash flow End of year Amount Appropriate required return 1 0 2 0 3 0 4 to 15 0 4% 16 120000 a) Find the value of the bellow bond in order to assist ne with the investment decision
- On the 18 th July 2020,1 purchased a 2.45%,21 st August 2030 CGB at a yield of 1.346%. then on the 16 th of September 2021 on sold it when the yield was 1.228%. Assuming the reinvestment rate was 1.25% pa simple interest, what was the holding period yield for this investment? Express your answer as a percentage to 3 decimal places. eg not 0.0625 but 6.253Year Called-down Paid in capital Momt Fees $21 2016 2018 $26 2018 $16 2019 $10 2020 $27 O $10.51 O$13.20 The carried interest percent is 20%. The committed capital amount is $100. The management fee percent is 2.00% What is the carried interest in 2020? $14.80 Table 13 NAV after Operating NAV before Carried Results Distributions Interest Distributions Distributions -$16 $4 $14 O $2.98 $44 $49 $5 $10B/S Leverage: LEVERAGE 2020 2019 2017 Debt/Total Capital 150.2% 2018 Debt/EBITDA 2.02x 6.3x 2.9x 89.0% 1.82x 8.4x 3.1x 41.9% 0.76x 44.7x 3.8x Times Interest Earned Fixed Charge Coverage 251.4% 3.75x 3x 1.9x a. Based on the leverage ratios above, describe what is happening to leverage at Gracenat Company AND provide two different and separate reasons why this might have happened. b. Based on these leverage ratios, what do you believe the outlook is for this company in two years (2022)? Please answer both the questions