__________________ is driven by fundamentals, i.e. cash flow, growth and risk while ______________ is built upon comparing an asset to what investor are paying for similar assets in public markets or M&A transactions.

You are seeking to determine the cost of equity for a publicly traded company and are given the following information: Risk free rate of 5.0%, Beta of 1.10x, equity risk premium of 4.0%. What is the cost of equity?

Gazmotron International reported net income this past year of $420 million on book value of $2,950. The company paid out $200 million in dividends.

Using the above information, what was the return on equity (ROE) and the retention ratio?

Gazmotron International reported net income this past year of $420 million on book value of $2,950. The company paid out $200 million in dividends.'

What is the expected growth rate? What would it be if the company decided not to pay any dividends?

1c.Explain two potential errors that can dramatically impact the results of your DCF valuation and how you might approach minimizing errors.

An automobile insurance company divides customers into three categories, good risks, medium risks, and poor risks. Assume that 74% of the customers are good risks, 20% are medium risks, and 6% are poor risks. Assume that during the course of a year, a good risk customer has probability 0.005 of filing an accident claim, a medium risk customer has probability 0.01, and a poor risk customer has probability 0.025. A customer is chosen at random.

What is the probability that the customer is a good risk and has filed a claim? Round the answer to four decimal places.

What is the probability that the customer has filed a claim? Round the answer to four decimal places.

Given that the customer has filed a claim, what is the probability that the customer is a good risk?

A company sells 100 computers for $300 each on account to a customer. The computer cost the company $125 each. The company recorded the revenue and cost of goods sold. The company allows customers a right of return which they estimate to be 2% of sales. Using the Financial Statement effects template, how should the company record the estimated returns?

1. As an investor of a company, you want to find out your ROI provided by the company at the end of the current year.   Which of the following formulas would you use?

Group of answer choices

Net Income divided by the Average Asset of the company.

Net Income divided by the Sales amount of the company.

Net Income divided by the Equity amount of the company's ending Balance Sheet.

Net Income divided by the average amount of the Total Equities of the beginning & ending Balance Sheets of the company

2. You want to find out whether the management of a company had invested well to generate enough revenues. Which of the following formulas would you use?

Group of answer choices

Net Income divided by the average Assets of the beginning & ending Balance Sheets

Revenues divided by the average Assets of the beginning & ending Balance Sheets

Net Income divided by the Revenues

Net Income divided by the average Equity of the beginning & ending Balance Sheets

3. We know that all the decisions made by the management of a company must be made to maximize the value of the company so that its owners’ wealth is maintained at its maximum level (or amount). Which one of the following describes best the ultimate measurement of this effort? (Limit your answer to publicly traded companies.)

Group of answer choices

Maximizing its revenues amount ($) continuously each year

Maximizing its net profit amount ($) continuously each year

Increasing the size of Shareholders’ Equity (Owners’ Equity) – ($ as well as its % over Total Assets) – of the Balance Sheet continuously each year

Coordinating management policies and operational efficiency, along with financing decisions to maintain the stock price at the highest level in the market

74% of all Americans live in cities with population greater than 100,000 people. If 39 Americans are randomly selected, find the probability that

a. Exactly 27 of them live in cities with population greater than 100,000 people.

b. At most 27 of them live in cities with population greater than 100,000 people.

c. At least 30 of them live in cities with population greater than 100,000 people.

d. Between 28 and 32 (including 28 and 32) of them live in cities with population greater than 100,000 people.

According to the Blockbuster FY 2004 10K, what change in Blockbuster revenue, net income, liquidity, leverage, turnover, profitability, and/or market value measures are most descriptive Blockbuster’s performance for the period 2003 through 2004? How did the overall market change over that time frame? How has Netflix performed in this time frame? Select the single best available answer from those presented below. Group of answer choices

A) Experienced a massive loss of shareholders' equity; consumer spending for in-home movie viewing in the United States increased; revenues and subscribers have more than tripled.

B) Maintained a stable dividend; DVD sales increased; experienced their first Net income gains .

C)Experienced a massive loss of shareholders' equity; DVD sales increased; experienced Net income losses.

D) Maintained a stable dividend; consumer spending for in-home movie viewing in the United States increased; revenues and subscribers have more than tripled.

According to the Blockbuster FY 2004 10K, what change in Blockbuster revenue, net income, liquidity, leverage, turnover, profitability, and/or market value measures are most descriptive Blockbuster’s performance for the period 2003 through 2004? How did the overall market change over that time frame? How has Netflix performed in this time frame? Select the single best available answer from those presented below. Group of answer choices

A) Experienced a massive loss of shareholders' equity; consumer spending for in-home movie viewing in the United States increased; revenues and subscribers have more than tripled.

B) Maintained a stable dividend; DVD sales increased; experienced their first Net income gains .

C)Experienced a massive loss of shareholders' equity; DVD sales increased; experienced Net income losses.

D) Maintained a stable dividend; consumer spending for in-home movie viewing in the United States increased; revenues and subscribers have more than tripled.

An office equipment corporation performs preventive maintenance and repair on the line of copiers that it sells. For 45 recent service calls data has been collected on the number of copiers serviced during the call and the number of minutes spent on the call by the service person. The company would like to develop a regression model that can be used to predict the amount of time (in minutes) that a call will require based on the number of copiers that need to be serviced.

(c)        Interpret the value of the sample slope in the context of this problem.

(d)          Find a 95% confidence interval for the population slope.

(e)          Report and interpret the value of the coefficient of determination R². Also calculate the value of the correlation coefficient r.

An office equipment corporation performs preventive maintenance and repair on the line of copiers that it sells. For 45 recent service calls data has been collected on the number of copiers serviced during the call and the number of minutes spent on the call by the service person. The company would like to develop a regression model that can be used to predict the amount of time (in minutes) that a call will require based on the number of copiers that need to be serviced.

(c)        Interpret the value of the sample slope in the context of this problem.

(d)          Find a 95% confidence interval for the population slope.

(e)          Report and interpret the value of the coefficient of determination R². Also calculate the value of the correlation coefficient r.

Considering the following time series data: (Tableau)

1. Determine the least squares trend equation. Use a linear equation and any other non- linear equation. Provide R-squared for both cases.

2. Estimate the price of gold (ounce) for 2020. Does this seem like a reasonable estimate based on historical data?

3. What is the quality of the forecast? Also, Provide Mean Absolute Error (MAE), and the Mean Absolute Percentage Error (MAPE).

Please provide step by step tabulea solution and output.