题目内容
（请给出正确答案）
The business is risky. But______we would be rich.
A．should we succeed
B．would we succeed
C．might we succeed
D．could we succeed
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更多“The business is risky. But____…”相关的问题
A.to lose
B.to losing
C.losing
D.to have lost
A.Using the existing management and control architecture
B.Evaluating the existing perimeter and internal security
C.Analyzing, categorizing and prioritizing resources
D.Considering the business concerns
Net present value = 1,645,000 – 2,000,000 = ($355,000) so reject the project.
The following information was included with the draft investment appraisal:
1. The initial investment is $2 million
2. Selling price: $12/unit (current price terms), selling price infl ation is 5% per year
3. Variable cost: $7/unit (current price terms), variable cost infl ation is 4% per year
4. Fixed overhead costs: $500,000/year (current price terms), fi xed cost infl ation is 6% per year
5. $200,000/year of the fi xed costs are development costs that have already been incurred and are being recovered by an annual charge to the project
6. Investment fi nancing is by a $2 million loan at a fi xed interest rate of 10% per year
7. OKM Co can claim 25% reducing balance capital allowances on this investment and pays taxation one year in arrears at a rate of 30% per year
8. The scrap value of machinery at the end of the four-year project is $250,000
9. The real weighted average cost of capital of OKM Co is 7% per year
10. The general rate of infl ation is expected to be 4？7% per year
Required:
(a) Identify and comment on any errors in the investment appraisal prepared by the trainee accountant. (5 marks)
(b) Prepare a revised calculation of the net present value of the proposed investment project and comment on the project’s acceptability. (12 marks)
(c) Discuss the problems faced when undertaking investment appraisal in the following areas and comment on how these problems can be overcome:
(i) assets with replacement cycles of different lengths;
(ii) an investment project has several internal rates of return;
(iii) the business risk of an investment project is signifi cantly different from the business risk of current operations. (8 marks)
AggroChem is a fully listed company fi nanced wholly by equity. LeverChem is listed on an alternative investment market. Both companies have been trading for over 10 years and have shown strong levels of profi tability recently. However, both companies’ shares are thinly traded. It is thought that the current market value of LeverChem’s shares at
higher than the book value is accurate, but it is felt that AggroChem shares are not quoted accurately by the market.
The following information is taken from the fi nancial statements of both companies at the start of the current year:
It can be assumed that the retained earnings for both companies are equal to the net reinvestment in assets.
The assets of both companies are stated at fair value. Discussions with the AtReast Bank have led to an agreement that the fl oating rate loan to LeverChem can be transferred to the combined business on the same terms. The current yield rate is 5% and the current equity risk premium is 6%. It can be assumed that the risk free rate of return is equivalent to the yield rate. AggroChem’s beta has been estimated to be 1·26.
AggroChem Co wants to use the Black-Scholes option pricing (BSOP) model to assess the value of the combined business and the maximum premium payable to LeverChem’s shareholders. AggroChem has conducted a review of the volatility of the NOPAT values of both companies since both were formed and has estimated that the volatility of the combined business assets, if the acquisition were to go ahead, would be 35%. The exercise price should be calculated as the present value of a discount (zero-coupon) bond with an identical yield and term to maturity of the current bond.
Required:
Prepare a report for the management of AggroChem on the valuation of the combined business following acquisition and the maximum premium payable to the shareholders of LeverChem. Your report should:
(i) Using the free cash fl ow model, estimate the market value of equity for AggroChem Co, explaining any assumptions made. (9 marks)
(ii) Explain the circumstances in which the Black-Scholes option pricing (BSOP) model could be used to assess the value of a company, including the data required for the variables used in the model. (5 marks)
(iii) Using the BSOP methodology, estimate the maximum price and premium AggroChem may pay for LeverChem. (9 marks)
(iv) Discuss the appropriateness of the method used in part (iii) above, by considering whether the BSOP model can provide a meaningful value for a company. (5 marks)
Professional marks will be awarded in question 2 for the clarity and presentation of the report. (4 marks)
The ordinary shares of Tinep Co have a nominal value of 50 cents per share and are currently trading on the stock market on an ex dividend basis at $5·85 per share. Tinep Co has an equity beta of 1·15.
The loan notes have a nominal value of $100 and are currently trading on the stock market on an ex interest basis at $103·50 per loan note. The interest on the loan notes is 6% per year before tax and they will be redeemed in six years’ time at a 6% premium to their nominal value.
The risk-free rate of return is 4% per year and the equity risk premium is 6% per year. Tinep Co pays corporation tax at an annual rate of 25% per year.
Required:
(a) Calculate the market value weighted average cost of capital and the book value weighted average cost of capital of Tinep Co, and comment briefly on any difference between the two values. (9 marks)
(b) Discuss the factors to be considered by Tinep Co in choosing to raise funds via a rights issue. (6 marks)
Which of the following does the passage infer？
A．We now fully understand how risk factors trigger heart attacks.
B．We recently began to study how risk factors trigger heart attacks.
C．We have not identified many risk factors associated with heart attacks.
D．We do not fully understand how risk factors trigger heart attacks.
Which of the following is NOT cited as a possible risk factor？
A．High in cholesterol.
B．Conjugal affection.
C．Eating fatty foods.
D．Being under stress.
