You are forecasting the returns for Crane Company, a
plumbing supply company, which pays a current dividend of $10.30.
The dividend is expected to grow at a rate
of 3.3 percent. You have identified two public
companies, Ayayai and Pina, which appear to be
comparable to Crane. Ayayai has the same total risk
as Crane and a beta of 1.35. Pina, in contrast,
has a very different total risk but thThe table below shows the un-discounted cash flows of 5 projects
over 4 years. Use this following information to answer questions 2
through 6. For all questions assume that the yearly discount
rate is 9%.
|Project||Year 0||Year 1||Year 2||Year 3||Year 4|
If the projects are mutually exclusive which project do you
Based on your answer from question 2, what is that project’s
NPV. Enter you number to the nearest whole number without the
$ sign (example: $532.89 enter as 533).
If the projects were not mutually exclusive and you had
unlimited money, which projects would you accept? Select all
valid projects from the list below.
Based on your answer from question 4, select the project that
has the highest IRR, what is that project’s IRR? Enter you
number to four decimal place without the % (example 13.47% enter as
If you are interested in selecting the project with the highest
Profitability Index which project would you select.
*Questions for 5&6 rest of the answers are
correcte same market risk
as Crane. Pina’s beta is 1.15. The market risk
premium is 4.65 percent and the risk-free rate
is 1.15 percent.
Determine the price of Crane. (Round
answer to 2 decimal places, e.g. 125.61.)