Blog

A firm has EBIT of $[a] per share and depreciation per share of $[b]. Its tax rate is [c]%. They have spent $[d] per share on new capital projects (CAPEX), and they also spent $[f] on net investment in new inventory. What is their free cash flow to the firm (FCFF)? State your answer as a dollar amount with two decimal places.  

You found a stock that just paid a dividend of $[a] and you have a required return of [b]%. The short-term growth rate for this stock’s dividends is found to be [c]% and the long-term growth rate is estimated to be 2.46%. You think that it may take [d] years for the dividend growth rate to gradually decline to this level, and you want to calculate the firm’s intrinsic value with these assumptions. What is the estimated intrinsic value for this firm? State your answer as a dollar amount with two decimal places. 

Which interest rate makes an explicit adjustment for inflation?

The Total Debt Ratio for MU in 2022 was 0.250072. What is their Debt-to-Equity Ratio? State your answer with two decimal places of accuracy.

You used a stock screener to find a series of potential buys. Stock A has a P/E ratio of 11.5 and Stock B has a P/E ratio of 12.3 at the same time that the S&P 500 has a P/E ratio of 22.6. You can conclude that ____________________________________________.

A firm has only two funding sources, debt and equity. Their percentage of debt is [a]%, their tax rate is [b]%, and their pretax cost of debt is [c]%. If the required return on their equity is [d]%, then what is their weighted average cost of capital? State your answer as a percentage with two decimal places (i.e., 13.21, not .1321).

Reference the options chain for Caterpillar, Inc. (ticker: CAT) shown below. You bought two contracts of the $100 strike put. What is your breakeven point? State your answer in contract-level terms. Your answer should be a dollar amount with two decimal places of accuracy. (Note on viewing table below: You may have to use a horizontal scrollbar to see all of the columns in the table below.) CAT Option Chain     Month: Nov 2020     Calls Puts Last Change Bid Ask Volume Open Int. Strike Last Change Bid Ask Volume Open Int. 12.40 — 14.80 15.45 — 32 100.00 10.70 -0.27 10.55 10.90 12 426 11.75 — 12.05 12.65 — 154 105.00 13.00 -0.65 12.85 13.25 28 403 10.05 +0.74 9.75 10.10 10 211 110.00 15.54 — 15.50 15.95 — 308 7.70 +1.70 7.70 8.10 2 622 115.00 18.64 — 18.40 18.95 — 292 Expires 11/20/2020   Last Trade: $105.41 (as of May 15, 2020 11:06) 

You are screening for stocks and find one with a Debt-to-Equity Ratio of 0.94. How should you interpret this value?

A stock has a current price of $[a]. You expect it to reach $[b] at the end of one year and pay $[c] in dividends. What is your expected holding period return? State your answer as a percentage with two decimal places (i.e., 13.21, not .1321).

You are considering investing in a company that makes a revolutionary new medical testing kit. They are the only ones making this product as it is brand new to the market. Which two of Porter’s five forces should you watch closely? (Select two options)