Q1

Data
IRR 0.12 DIV1 = Do(1+g) 4.081
Wd 0.18 0.18 (1-T) 0.6
We(100-wd) 0.82 0.82
n 22years
PVb 527.88
Cpn Rate 0.04
g 0.06 0.06
DIVo 3.85
Po 43
T 0.4
WACC ? Wd*rd(1-T)+We*re

rd=ytm YTM(approx)= x100

rd=ytm 9
re DIVo(1+g)/Po+g
re 0.094906977 0.06 0.15490698 15.4907
re 15.49

WACC Wd*rd(1-T)+We*re
WACC 13.6738

Q5
wacc 12 1-T 0.8
wd 75
we 25
rd 12.5
t 20
Rf 6
Rm-Rf 8
CAPM RRR=Rf+Beta(Rm-Rf)
Beta ?
WACC wdxrd(1-T)+wexre
12 7.5 + 0.25re
4.5 0.25re
4.5/0.25 re
re=rrr 18
RRR=Rf+Beta(Rm-Rf)
RRR-Rf=Beta(Rm-Rf)
RRR-Rf/(Rm-Rf)=Beta
Beta=RRR-Rf/(Rm-Rf)
Beta = RRR-Rf/(Rm-Rf)
Beta 18 - 6 / (8)
Beta 12 / (8)
Beta 1.5

Q6
Data
wd 50
we 50
income 30
div payout 0.2
div 6
Retain earning 24 20 4
budget 40
rd 10
T 40 Debt=20 equity=20
Po 66
Do 4
g 10 0.1
f 5 3.3 62.7

re Divo(1+g)/Po+g
re 4(1+0.1)/66+0.1
re 0.166666667 16.6666667
WACC Wd*rd(1-T)+We*re
WACC 0.5*10(0.6)+0.5*16.67
WACC 11.335

Q7
wd 40
we 60
income 16
div payout 0.25
div 4
Retain earning 12
budget 15 6 9
rd 10
T 30
Po 55
Do 5
g 10
f 5

re 0.2

wacc wdxrd(1-T)+wexre
Q2 Q3
Data Data
IRR 0.21 DIV1 = Do(1+g) 3.531 IRR
Wd 0.32 0.32 (1-T) 0.6 Wd
We(100-wd) 0.68 0.68 We(100-wd)
n 19years n
PVb 1984.51 PVb
Cpn Rate 0.2 Cpn Rate
g 0.1 0.06 g
DIVo 3.21 DIVo
Po 16 Po
T 0.4 0.4 T
WACC ? Wd*rd(1-T)+We*re WACC

rd=ytm YTM(approx)= x100 rd=ytm

rd=ytm 9 rd=ytm
re DIVo(1+g)/Po+g re
re 0.2206875 0.1 0.320688 32.06875 re
re 32.07 re

WACC Wd*rd(1-T)+We*re WACC

WACC 23.5356 WACC
 0.13 DIV1 = Do(1+g) 3.0411
0.07 0.07 (1-T) 0.6
0.93 0.93
29years
218.91
0.01
0.09 0.09
2.79
30
0.4
? Wd*rd(1-T)+We*re

YTM(approx)= x100

8
DIVo(1+g)/Po+g
0.10137 0.09 0.19137 19.137
19.14

Wd*rd(1-T)+We*re
18.1362
 Q9
Wd 0.4 0.4
We 0.6 0.6
Po 50
do 2
g 8
rf 4
rm-rf 6.4
beta 1.25
t 40
po-f 40
f 10
n 25
fv 1000
pv 960
CPN rate 8
CPN 80

a) RD=ytm 8.3 0.6

b) Rd 4.98
re

CAPM RRR=Rf+Beta(Rm-Rf)
c) re 12
Divo(1+g)/Po+g
d) re 0.1232 12.16 internal
e) re 0.134 12.7 external
wacc Wd*rd(1-T)+We*re
wacc 9.288
wacc 9.612