Principles of Corporate Finance
13th Edition
ISBN: 9781260465099
Author: BREALEY, Richard
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 11, Problem 9PS
Market prices Suppose the current price of gold is $1,200 an ounce. Hotshot Consultants advises you that gold prices will increase at an average rate of 12% for the next two years. After that the growth rate will fall to a long-run trend of 3% per year. What is the
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Suppose the current price of gold is $1,360 an ounce. Hotshot Consultants
advises you that gold prices will increase at an average rate of 11% for the
next two years. After that the growth rate will fall to a long - run trend of 3%
per year. Assume that gold prices have a beta of 0 and that the risk - free
rate is 5.25%. What is the present value of 1.8 million ounces of gold
produced in 7 years?
Suppose the current price of gold is $1,300 an ounce. Hotshot Consultants advises you that gold prices will increase at an average rate of 12% for the next two years. After that the growth rate will fall to a long-run trend of 4% per year. Assume that gold prices have a beta of 0 and that the risk-free rate is 5.5%. What is the present value of 1.5 million ounces of gold produced in 8 years? (Do not round intermediate calculations. Enter your answer in billions rounded to 2 decimal places.)
Suppose the current price of gold is $1,240 an ounce. Hotshot Consultants advises you that gold prices will increase at an average
rate of 14% for the next two years. After that the growth rate will fall to a long-run trend of 2% per year. Assume that gold prices have a
beta of O and that the risk-free rate is 6%. What is the present value of 1.2 million ounces of gold produced in 10 years? (Do not round
intermediate calculations. Enter your answer in billions rounded to 2 decimal places.)
Present value
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Chapter 11 Solutions
Principles of Corporate Finance
Ch. 11 - Capital budgeting process True or false? a. The...Ch. 11 - Capital budgeting process Explain how each of the...Ch. 11 - Capital budgeting process Draw up an outline or...Ch. 11 - Prob. 4PSCh. 11 - Biased forecasts Look back to the cash flows for...Ch. 11 - Prob. 6PSCh. 11 - Prob. 7PSCh. 11 - Prob. 8PSCh. 11 - Market prices Suppose the current price of gold is...Ch. 11 - Prob. 10PS
Ch. 11 - Prob. 11PSCh. 11 - Prob. 12PSCh. 11 - Prob. 13PSCh. 11 - Economic rents True or false? a. A firm that earns...Ch. 11 - Prob. 16PSCh. 11 - Economic rents Thanks to acquisition of a key...Ch. 11 - Prob. 18PSCh. 11 - Prob. 19PSCh. 11 - Prob. 20PSCh. 11 - Prob. 21PSCh. 11 - Prob. 22PSCh. 11 - Economic rents Taxes are a cost, and, therefore,...Ch. 11 - Prob. 1MCCh. 11 - Libby Flannery, the regional manager of Ecsy-Cola,...
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