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For each of the statements below, indicate whether the statementis True or False AND provide one or two explanatory sentences tosupport your answer.a. In New Zealand, the Capital Asset Pricing Model (CAPM) thatis used to compute the cost of equity capital adjusts the risk freerate for the average investor tax rate but this adjustment is notmade for the risk free rate component in the post-tax market riskpremium.b. Reinvestments in the firm’s net operating assets are deductedfrom NOPAT to arrive at free cash flows to the firm to maintain thefirm’s operating capability and to grow the firm.c. To ensure the free cash flows in the perpetuity (terminal)period grow at a constant terminal growth rate g, the relationshipsbetween components in the income statement and balance sheet mustbe the same in the last year of the horizon period and first yearof the perpetuity (terminal) period.d. When using the market multiples approach to value thetarget’s firm/enterprise value, we would use multiples based oncomparable companies’ net profit after tax and book value of equityand apply these multiples to the target firm’s net operating profitafter tax and net operating assets.