Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you valued a publically listed firm using a dcf mo

You valued a publically listed firm using a DCF model with a perpetuity terminal value...

90.2K

Verified Solution

Question

Finance

You valued a publically listed firm using a DCF model with a perpetuity terminal value (TV). Your model-estimated share price is 10 times higher than the market-traded share price. How can you make your model-estimated share price closer to the market-traded share price? You can:

1. Lower the beta of equity.

2. Lower the growth rate of the perpetuity terminal value.

3. Lower the required return or WACC.

4. Lower the risk free rate.

5. Lower the market risk premium.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

For fiscal year 2018, Hiroole Department Store had net income of$6,060,000. Interest expense was...

Accounting
Q

Let us have a particle which is moving with a constant velocity v in the laboratory...

Physics
Q

How would a symbolic interactionist explain the following statement, \"Alternative medical treatments are most effective for those...

Psychology
Q

Use the Laplace transform to solve the given initial value problem. y???12y??13y=0; y(0)=5, y?(0)= 23 Enclose arguments of...

Advance Math
Q

Which positive integers n, where 20 ? n ? 30, have primitive roots?

Advance Math
Q

Why do evolutionary scientists compare organisms genetic sequences A DNA is perfectly preserved in fossils...

Biology
Q

The coefficient of volume expansion 49x10 5 K Calculate the fractional change in its density...

Physics
Q

Find the reference angle for radians Elin 3

Basic Math
Q

Assume a member is selected at random from the population represented by the graph Find...

Statistics
Q

Find the average value of f x x 3 over the interval 0 In3 O...

Calculus
Q

1 Find a f x b cus x F x the derivative 5 Sins cus...

Calculus
Q

1. A student took 60 minutes to answer a combination of 20 multiple-choice and extended-response...

Algebra