Brees Industries is considering going public but is unsure of a fair offering price for the company. Before hiring an investment banker to assist in making the public offering, managers at Brees have decided to make their own estimate of the firm’s common stock value. The firm’s CFO has gathered data for performing the valuating using the free cash flow valuation model. The firm’s weighted average cost of capital is 10%, and it has $800,000 of debt at market value and $600,000 of preferred stock at its assumed market value. The estimated free cash flows over the next 4 year, 2020 through 2023, are given below. Beyond 2017 to infinity, the firm expects its free cash flow to grow by 3% annually.
2020 RM 100000
2021 RM 200000
2022 RM 310000
2023 RM 450000

A) estimate the value of the entire company using the free cash flow valuation model?

b) using finding in part a, find the common stock value?

c) if the firm plan to issue 100,000 shares of common stock, what is the estimated value per share?

Nabor Industries is considering going public but is unsure of a fair offering price for the company. Before hiring an investment banker to assist in making the public​ offering, managers at Nabor have decided to make their own estimate of the​ firm's common stock value. The​ firm's CFO has gathered data for performing the valuation using the free cash flow valuation model.

The​ firm's weighted average cost of capital is 12%​, and it has $1,970,000 of debt at market value and $390,000

of preferred stock in terms of market value. The estimated free cash flows over the next 5​ years, 2020 through 2024​,

are given in the​ table,

Beyond 2024 to​ infinity, the firm expects its free cash flow to grow by 3% annually.

2020   $220,000
2021   $280,000
2022   $320,000
2023   $390,000
2024   $430,000

a.  Estimate the value of Nabor​ Industries' entire company by using the free cash flow valuation model.

b.  Use your finding in part a, along with the data provided​ above, to find Nabor​ Industries' common stock value.

c.  If the firm plans to issue 200,000 shares of common​ stock, what is its estimated value per​ share?

Axel Heckman is the engagement partner for the financial report audit of Sturfolks Equipment Ltd for
the year ended 30 June 2018. The following material events or transactions have come to Axel’s
attention before he is scheduled to issue his report on 31 August 2018:


(a) On 14 July 2018, Sturfolks Equipment settled and paid a personal injury claim of a former
employee as a result of an accident that occurred in March 2017. The company has not
previously recorded a liability for the claim.


(b) On 17 July 2018, Sturfolks Equipment agreed to purchase for cash the outstanding shares of
Recreational Equipment Ltd. This acquisition is likely to double the sales volume of Sturfolks
Equipment.


(c) On 20 July 2018, the directors became aware of broken glass found in their pre-packaged
sandpits. This product had only been on sale for two weeks and had been purchased directly
from the manufacturer, NSWPIT Ltd, an unrelated company in Thailand, one week prior to
being introduced to the public.


(d) On 3 August 2018, a plant owned by Sturfolks Equipment was damaged in a flood, resulting in an uninsured loss of inventory.

For each of the above events or transactions, identify audit procedures that should have brought the
item to the auditor’s attention, and determine the treatment required in the financial report for the
year ended 30 June 2018.

The following information is extracted from several articles2 about oil market. An intensifying oil price war between Saudi Arabia and Russia has created “very painful” market conditions for the world’s largest crude oil producers. International benchmark Brent crude traded at $32.97 Thursday, down almost 8%, while U.S. West Texas Intermediate (WTI) stood at $30.40, around 7.8% lower. Oil prices have almost halved since the start of the year. Last week, Saudi Arabia failed to secure Moscow’s support for deeper output cuts at a meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC plus. OPEC had proposed to deepen cuts by 1.5 million barrels per day and Russia was asked to cut an extra 300,000 bpd. “There was no point in cutting until after everyone understood how sharply demand could fall. We cannot fight a falling demand situation when there is no clarity about where the bottom (of demand) is,” Pavel Sorokin, the Russia’s deputy energy minister, said. “It is very easy to get caught in a circle when, by cutting once, you get into an even worse situation: oil prices would shortly bounce back before falling again as demand continued to fall.” Cooperation between two (Saudi Arabia and Russia) of the world’s three largest oil producers — the third is the United States — appears to be at an end. 2How a Saudi-Russian Standoff Sent Oil Markets Into a Frenzy. 9th March 2020. New York Times Russia to OPEC - deeper oil cuts won't work. 12th March 2020. Reuter The losers — and even bigger losers — of an oil price war between Saudi Arabia and Russia. 12th March 2020. CNBC

a) With aid of diagram, explain how the fall in crude oil demand affect the output of OPEC plus members.

b) Discuss why Russia refuse to follow Saudi Arabia’s proposal to cut crude oil production with aid of diagram.

Question 2: The following information is extracted from several articles2 about oil market.

An intensifying oil price war between Saudi Arabia and Russia has created “very painful” market conditions for the world’s largest crude oil producers. International benchmark Brent crude traded at $32.97 Thursday, down almost 8%, while U.S. West Texas Intermediate (WTI) stood at $30.40, around 7.8% lower. Oil prices have almost halved since the start of the year.

Last week, Saudi Arabia failed to secure Moscow’s support for deeper output cuts at a meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC plus. OPEC had proposed to deepen cuts by 1.5 million barrels per day and Russia was asked to cut an extra 300,000 bpd.

“There was no point in cutting until after everyone understood how sharply demand could fall. We cannot fight a falling demand situation when there is no clarity about where the bottom (of demand) is,” Pavel Sorokin, the Russia’s deputy energy minister, said.

“It is very easy to get caught in a circle when, by cutting once, you get into an even worse situation: oil prices would shortly bounce back before falling again as demand continued to fall.”

Cooperation between two (Saudi Arabia and Russia) of the world’s three largest oil producers — the third is the United States — appears to be at an end.

2How a Saudi-Russian Standoff Sent Oil Markets Into a Frenzy. 9th March 2020. New York Times Russia to OPEC - deeper oil cuts won't work. 12th March 2020. Reuter The losers — and even bigger losers — of an oil price war between Saudi Arabia and Russia. 12th March 2020. CNBC

a) With aid of diagram, explain how the fall in crude oil demand affect the output of OPEC plus members.

b) Discuss why Russia refuse to follow Saudi Arabia’s proposal to cut crude oil production with aid of diagram.

Explain in a few sentences the consequences of an increase in the U.S. exchange rate (an appreciation of the $ versus other currencies) make U.S. exports and GDP.

The significance of the U.S. market’s efficiency and its importance in global finance.

What would happen if U.S. markets became less efficient?

How might actions/events in other countries outside the U.S. affect the aggregate supply or aggregate demand in the U.S.? Be sure to explain.

The effect of China’s exchange rate movements on U.S trade:

a.Status of change in RMB

b.Status of goods trade between China and U.S

What are some factors that contribute to the U.S.'s economic inequalities? Why is the U.S. one of the countries that has the highest economic inequality?