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Determine the ff.
1. Call Option - Total Value
2. Call Option - Intrinsic Value
3. Call Option - Extrinsic Value
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- the preferece share of an entity pay an annual dividend of R8 per share. calculate the cost of the preference share if the price value of the share is R100 and the shares are currently tradig at a market price of R110 per share. the tax rate is currently 28%Estimating Share Value Using the DCF ModelAssume following are forecasts of Abercrombie & Fitch's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 29, 2011. Reported Horizon Period (In millions) 2011 2012 2013 2014 2015 Terminal Period Sales $ 3,750 $ 4,500 $ 5,400 $ 6,480 $ 7,776 $ 7,853 NOPAT 464 539 654 794 982 960 NOA 1,320 1,602 1,933 2,332 2,791 2,802 Answer the following requirements assuming a discount rate (WACC) of 13.3%, a terminal period growth rate of 1%, common shares outstanding of 86.2 million, and net nonoperating obligations (NNO) of $(261) million (negative NNO reflects net nonoperating assets such as investments rather than net obligations).(a) Estimate the value of a share of Abercrombie & Fitch common stock using the discounted cash flow (DCF) model as of January 29, 2011. Rounding instructions: Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for…Estimating Intrinsic Share Value Using Dividend Discount Model Mattel, Inc. is expected to pay a $1.44 dividend per share annually. Estimate its intrinsic value per common share using the dividend discount model (DDM) under each of the following separate assumptions. (Assume that Mattel’s cost of equity capital is 8.0%.) Required a. The $1.44 dividend per share occurs at the end of each of the next three years, after which there are no additional dividend payments. Round answer to two decimal places. $Answer b. The $1.44 dividend per share occurs at the end of each year in perpetuity. Round answers to two decimal places, if applicable. $Answer c. The $1.44 dividend per share occurs at the end of each of the next three years, after which the dividends increase at a rate of 4% per year. Round answers to two decimal places. $Answer
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- Estimating WACC and Expected Growth in Dividends ModelUnited Parcel Service Inc. was trading at $97.53 at December 31, 2018. Its dividend per share was $3.84, its market beta was estimated to be 1.44, its average pretax borrowing rate was 2.6%, and its assumed statutory tax rate was 22.4%, consisting of the 21% federal rate plus the 1.4% state and local rate, net of any federal benefits. UPS’s market value of equity (market capitalization) was $83.90 billion, computed as 860.2386 million shares times its $97.53 price, and its total market value (enterprise value) was $107.19 billion, computed as $83.90 billion in equity plus the fair value of long-term debt of $23.29 billion (disclosed in note 8 of the financial statements). Assume a risk-free rate of 2.1% and a market risk premium of 5% to answer the following requirements.(a) Estimate UPS's cost of debt capital, cost of equity capital, and weighted average cost of capital. (Round your answers to one decimal place.)Cost of debt…Estimating WACC and Expected Growth in Dividends ModelUnited Parcel Service Inc. was trading at $97.53 at December 31, 2018. Its dividend per share was $3.84, its market beta was estimated to be 1.44, its average pretax borrowing rate was 2.6%, and its assumed statutory tax rate was 22.4%, consisting of the 21% federal rate plus the 1.4% state and local rate, net of any federal benefits. UPS’s market value of equity (market capitalization) was $83.90 billion, computed as 860.2386 million shares times its $97.53 price, and its total market value (enterprise value) was $107.19 billion, computed as $83.90 billion in equity plus the fair value of long-term debt of $23.29 billion (disclosed in note 8 of the financial statements). Assume a risk-free rate of 2.1% and a market risk premium of 5% to answer the following requirements.(a) Estimate UPS's cost of debt capital, cost of equity capital, and weighted average cost of capital. (Round your answers to one decimal place.)Cost of debt…Assuming that the preference share capital of Love Company are non-cumulative and that Love Company paid P1M cash dividends for the current year. How much is the balance of Investment in Love Company at the end of the end of the current year