Q 28

If a company with a share price of $6 has earnings per share of $0.15,calculate the cost of capital for the firm.

Q 29

An investor estimates that a company has a maintainable constant level of EPS of $1.20.The investor also estimates the cost of equity capital to be 14%.New projects adopted for the next three years are expected to generate net returns equal to $4.70,$7.90 and $8.10 in years 1,2 and 3 respectively.What is the present value of one share in this company?

Q 30

A company has revenues of $170 000,expenses of $45 000 and tax of $37 500.If the company also has a working capital level of $25 000 and the corporate tax rate is 30%,estimate the level of free cash flows for the firm.